Global ETF News Older than One Year
Private equity funds active in market hit record
April 25, 2018---A high of 2,296 funds operating, according to new report
The number of private equity funds has reached an all-time high as demand from institutional investors for the sector grows in a low interest rate environment, according to a new report.
As of January 2018, a record 2,296 private equity funds were active in the market, seeking to raise an aggregate $744bn, representing a 25 per cent increase compared with a year earlier, the data from the Boston Consulting Group showed. The authors of the report said the increase was being driven partly by ageing founders reluctant to let go of their companies but also growing demand from yield-starved investors for the asset class.
Source: FT.com
ISDA Publishes New Academic Paper on Margin Requirements for Non-cleared Derivatives Market
April 25, 2018--The International Swaps and Derivatives Association, Inc. (ISDA) has published a new academic paper that analyzes the regulatory initial margin framework for the non-cleared derivatives market. The academic paper, sponsored by ISDA, was written by Rama Cont, Chair of Mathematical Finance at Imperial College London.
The paper examines the rationale for the 10-day liquidity horizon applied under the initial margin rules for non-cleared trades, and assesses whether it is appropriate. The 10-day period is double the five days set for cleared trades.
The research argues that using a fixed liquidation horizon of 10 days is not realistic, and does not take the liquidity characteristics of the assets or the size of the position into account. Instead, the paper recommends that the liquidation horizon should depend on the size of the position relative to the market depth of the asset. It also argues that IM should not be based on the exposure of the initial position over the entire liquidation horizon, but on the exposure over the initial period required to set up the hedge, plus the exposure to the hedged position over the remainder of the liquidation horizon.
view the ISDA Margin Requirements for Non-cleared Derivatives paper
Source: ISDA
IMF Working Papers-Financial Crises, Macroeconomic Shocks, and the Government Balance Sheet: A Panel Analysis
April 24, 2018--Summary:
Government financial assets are increasingly recognized as playing an important role in assessing fiscal sustainability. However, very little research has been done on the dynamics of government financial assets compared to liabilities. In this paper, we investigate the impact of recent financial crises and macroeconomic shocks on government balance sheets, decomposing the separate effects on financial assets and liabilities.
Using quarterly Government Finance Statistics (GFS) data, we analyze a panel of 27 countries over the period 1999Q1-2017Q1 through fixed effects and panel VAR techniques. Financial crises are shown to deteriorate the net financial worth of governments, but no significant impact is found on assets suggesting that they are not being used as fiscal buffers in bad times. On the contrary, countries that suffered both financial and banking crises experienced an "artificial" increase of their asset position through bank bailouts. Macroeconomic shock analyses reveal that government balance sheet items are countercyclical, but important asymmetries are found in their dynamics.
Source: IMF
Commodity prices to rise more than expected in 2018: World Bank
April 24, 2018--Oil prices to average $65 a barrel in 2018 on strong demand, producer restraint
Oil prices are forecast to average $65 a barrel over 2018, up from an average of $53 a barrel in 2017, on strong demand from consumers and restraint by oil producers, while metals prices are expected to rise 9 percent this year, also on a pickup in demand and supply constraints, the World Bank said on Tuesday.
Prices for energy commodities-which include oil, natural gas, and coal--are forecast to jump 20 percent in 2018, a 16 percentage point upward revision from October's outlook, the World Bank said in its April Commodity Markets Outlook. The metals index is expected to rise as an 9 percent drop in iron ore prices is offset by increases in all base metals prices, led by nickel, which is forecast to rise 30 percent.
view the World Bank Commodity Markets Outlook Oil Exporters: Policies and Challenges
Source: World Bank
World Gold Council-Investment Update: Gold tracks the dollar as rates take a back seat
April 23, 2018--Investors often use the direction of the US dollar as a bellwether for gold's performance. However, over recent years, short-term movements in gold have been more heavily influenced by US interest rates and expectations of policy normalisation.
Our analysis shows that the correlation between gold and US rates is waning and that the US dollar is again a stronger indicator of the direction of price. And, in our view, this will continue over coming months-even while the dollar won't explain gold's movements entirely. Furthermore, the analysis shows that higher real rates have not always resulted in negative gold returns.
Source: World Gold Council
World Gold Council-Investment Update: Gold tracks the dollar as rates take a back seat
April 23, 2018--Investors often use the direction of the US dollar as a bellwether for gold's performance. However, over recent years, short-term movements in gold have been more heavily influenced by US interest rates and expectations of policy normalisation.
Our analysis shows that the correlation between gold and US rates is waning and that the US dollar is again a stronger indicator of the direction of price. And, in our view, this will continue over coming months-even while the dollar won't explain gold's movements entirely. Furthermore, the analysis shows that higher real rates have not always resulted in negative gold returns.
The partners signed a memorandum of understanding to develop the exchange in Abu Dhabi. It would cater to companies and investors involved in China's Belt and Road initiative, a Beijing-backed drive to win trade and investment deals along routes linking China to Europe.
Source: Zawya.com
ETF Securities Weekly Flows Analysis-Precious metal ETP flows strengthen as trade tensions continue
Bargain hunters drove US$16.1mn of inflows in gold ETPs, marking two
consecutive weeks of inflows. Gold prices came under pressure as bond yields rose
sharply. The yield on the 10-year Treasury, rose to 2.96% the highest it's been since
January 2014 following supportive comments by the Fed governor Lael Brainard, for
continued gradual increases in the Federal Funds rate. Added to that, the Federal
Reserve Beige book showed a solid outlook for the US economy, while noting concerns
over a potential trade war. Silver ETPs received US$12.8mn, marking the fifth
consecutive week of inflows.
Source: etfsecurities.com
Basel Committee urges full, timely and consistent implementation of Basel III post-crisis reforms
The report sets out the adoption status of Basel III standards for each BCBS member jurisdiction as of end-March 2018. It includes for the first time the finalised Basel III post-crisis reforms published by the Committee in December 2017. These recent reforms will take effect from 1 January 2022. view the BIS Fourteenth progress report on adoption of the Basel regulatory framework report
Source: BIS
DECPG Global Weekly-April 20, 2018
China GDP growth held steady in Q1; industrial production and investment growth moderated, retail sales rose
Bond issuance in the MENA region remained robust U.S. industrial production growth sustained in 18Q1; retail sales rebounded. U.S. industrial production rose 0.5 percent (m/m, sa) in
March, and was up 4.5 percent (q/q, saar) in 18Q1, amid robust
export and investment growth.
U.S. retail sales rose 0.6 percent (m/m, sa) in March, following a 0.1 percent drop in the previous month, supported by
strong auto sales.
Source: World Bank
April 23, 2018--Summary
Bargain hunters continued to drive strong inflows into gold ETPs-worth US$16.1mn - supported by ongoing trade tensions and geopolitical risks.
Crude oil ETPs faced redemptions worth US$32.7mn, the highest level in five weeks, on the back of profit taking as oil prices rose for the second week in a row.
Outflows from nickel ETPs widened the most in 3 weeks as prices rose over concerns of further US sanctions on Russia.
April 23, 2018--Today the Basel Committee on Banking Supervision (BCBS) issued the Fourteenth progress report on adoption of the Basel regulatory framework.
April 20, 2018--TAKING STOCK
U.S. industrial production growth sustained in 18Q1; retail sales rebounded
Euro Area consumer inflation edged up in March; consumer confidence rose
Japan's trade surplus widened in March
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