Etikett: Bank of England

Weak Chinese PMI trigger global panic and market sell off

ETF Securities Weak Chinese PMI trigger global panic and market sell offWeak Chinese PMI trigger global panic and market sell off

Commodity ETP Weekly – Weak Chinese PMI trigger global panic and market sell off

Highlights

Lower oil prices drive further inflows into oil ETPs.
Global stock market sell-off benefitted gold.
2016 a turning point for commodities?

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  • Weak Chinese  PMI trigger a market sell off early last week affecting stocks and commodities with oil falling to an 11-year low while gold rose more than 4%.
  • Oil ETPs saw inflows last week, adding to last year’s strong inflows. Oil ETPs attracted the largest inflows across commodity complex last year after oil prices dropped 33% in 2015 and drove bargain-hunting.
  • Gold and broad commodity ETPs also recorded inflows as investors rebalanced their exposure out of equities and into safe haven assets such as gold.

Lower oil prices drive further inflows into oil ETPs. Oil prices fell to an 11-year low after Chinese Caixin Manufacturing and Service PMIs released last Monday renewed pessimism about China’s growth prospects and demand for natural resources this year. Last week, Brent fell to US$33.75/bbl (-9.5%) and WTI fell to US$33.27/bbl (-10.2%). Tensions between Saudi Arabia and Iran underpinned oil prices very briefly on Monday but was soon overcome by the rout in global equity markets. The decline in US oil inventories last week seemed to have gone completely unnoticed, with the market focused on the broader cyclical sell-off. Despite last week’s inventory decline, US oil stocks remain significantly above its historical average and the global supply glut in oil continues to weigh on prices. However, the prospect of a price recovery in the medium term remains the general consensus. Oil ETPs recorded inflows of US$43mn last week after a year of strong inflows of US$1.46bn, the largest across ETF Securities commodity ETPs.

Global stock market sell-off benefitted gold. Gold maintained its safe-haven status in the opening week of 2016. Chinese stock exchanges were forced to halt trading several times over the past week, triggering a more general panic across global asset markets. The panic led to gold prices rising 4.4% and gold ETPs witnessed net inflows of US$11.1mn, the largest inflows since mid-November. Last year gold ETPs recorded outflows of US$1.26bn, the largest across the commodity complex, as a strong US dollar and rate rises weighed on the price of the metal. By Friday, gold prices eventually pared back some of its gains on the hopes that the suspension of China’s circuit breaker rules would calm the market. Strong US non-farm payroll released on Friday may also add further downward pressure to the yellow metal this week.

2016 a turning point for commodities? While commodities will remain affected by the excessively negative sentiment around China, we believe USD strength will wane this year, removing one of the weights on commodity prices with gold the main beneficiary. Oil should progressively recover as weak prices become economically unsustainable for the OPEC countries. Mining capex and production cuts should bite into supply, providing an upward pressure to some metal prices. Last week saw inflows of US$18.9mn into broad commodity ETPs, marking the third consecutive week of inflows into broad baskets. Broad commodity baskets saw a total of US$232.2mn inflows in 2015.

Key events to watch this week. The Bank of England (BoE) meeting on Thursday will reveal whether the BoE will follow the Fed and increase interest rates. Historically the BoE has increased rates 6 months on average after the Fed. Commodity prices are likely to remain volatile, especially after the release of Wednesdays’ Chinese trade data.

For more information contact

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E info@etfsecurities.com

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Mixed Jobs Report Keep Investors Guessing

Mixed Jobs Report Keep Investors Guessing

ETFS Multi-Asset Weekly – Mixed Jobs Report Keep Investors Guessing

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Highlights

•    Commodities: Persistent surplus weighs on oil prices.
•    Equities: Global equity market sell off continues amid weaker PMI and US payrolls data.
•    Currencies: Dollar stages a comeback after August jobs report

The European Central Bank revised downwards its growth and inflation forecasts, paving the way for further policy stimulus. The Chinese authorities followed suit, revising their growth expectations down to 7.3% this year from 7.4% earlier. The US Federal Reserve is likely to maintain caution in this environment and hold off raising rates in September despite falling unemployment. A number of central banks meetings this week (Bank of England, Bank of Canada, Reserve Bank of Canada), will shed light on how other policy makers have interpreted the recent volatility.

Commodities

Persistent surplus weighs on oil prices. Oil capped its biggest three day rally in 25 years after the weekly build up in US crude oil stocks rose by 4.7mn barrels. Saudi Arabia reasserted its stance to maintain market share by lowering its official selling prices for October. President Obama clinched sufficient votes in the US Senate to secure the Iranian nuclear deal reinstating the oversupply in oil market. Gold lost its lustre on the back of a strengthening US dollar. Sugar prices were positively impacted by fears of heavy rainfall impacting the Brazilian sugar cane harvest and a sharp rise in Thai sugar exports to China. The negative impact of the stronger US dollar on US exports coupled with ample EU wheat supply extended wheat’s downward trajectory. China’s downward revision of GDP forecasts is likely to can the cap the industrial metal price rally seen last week.

Equities

Global equity market sell off continues amid weaker PMI and US payrolls data. France’s purchasing manufacturers index (PMI) data shrank more than expected while stronger German PMI data helped drive a rebound in the DAX in the second half of the week. UK Services grew at the weakest pace in more than two years in August, weighing on the FTSE 100. A mixed labour market report, showing below-expectations payrolls but a surprising fall in unemployment, helped maintain equity market volatility. Implied S&P volatility (VIX) rose to 27.1 (up 4%), while small-cap equities (Russell 2000) fell 0.7%. Chinese equities responded positively to the interest rate cuts from the prior week, but continued intervention from the government casts doubts as to whether the gains are sustainable.

Currencies

US Dollar stages a comeback after August jobs report. Currencies from commodity exporting nations bore the brunt of the dollar’s gains. While the gain in US jobs were weaker-than-expected, the highest average hourly earnings since March and the lowest jobless rate since April 2008 (considered to be full employment by the Federal Reserve) raised the appeal of dollar denominated holdings. The euro retreated on the back of an increasing likelihood of further easing after the ECB meeting. Sweden’s krona climbed to a six week high versus the euro after the Riksbank kept its repo rate unchanged at 0.35 percent confirming the current stimulus is helping steer the economy out of a deflationary trap. Disappointing second quarter GDP growth and an unexpected decline in retail sales caused the Australian dollar to hit six year lows this week.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FSA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction.  No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

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Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

Threats to Europe’s Cyclical Recovery

Threats to Europe’s Cyclical Recovery

Introducing a new monthly report co-authored by ETF Securities Research and Roubini Global Economics Threats to Europe’s Cyclical Recovery

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Threats to Europe’s Cyclical Recovery

This report provides an update to themes introduced in our Quarterly Outlook, published in June. Our focus this month is on the threat to the European cyclical growth recovery, particularly the eurozone.

•    The eurozone is in the middle of a weak cyclical rebound that began in Q2 2013 after a double-dip recession, but has gained pace (to 1.0% y/y) recently as a result of the lower interest rates, the weaker euro, the reduced fiscal ”drag” for some countries (due to the increased ”fiscal flexibility” that the EU authorities have allowed), lower oil prices and other idiosyncratic factors. Near-term threats abound, and longer-term problems remain as well.

•    Most notably, if Greece fails to implement reforms, it could flunk its third successive ”bailout”. The UK’s economy and politics are diverging from the EU, and other ”anti-system” parties are gaining (in France, Hungary and Spain), while reform efforts are weak, indebtedness high and demographics negative.

•    What to watch this month: Bank of England monetary policy committee meeting (August 6), for indications about when to expect a rate hike; Greek negotiations toward a European Stability Mechanism loan (mid-August) – further clues about whether the calm can be sustained.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E info@etfsecurities.com

Important Information
This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”). ETFS UK is authorised and regulated by the United Kingdom Financial Conduct Authority (the ”FCA”).

This communication is only targeted at qualified or professional investors.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

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Risk Off to Risk On

Risk Off to Risk On

ETFS Multi-Asset Weekly – Risk Off to Risk On

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Highlights

Historic accord on Iran deal paves way for lower oil prices.

Positive Chinese data, Q2 earnings and central bank meetings help fuel equity rally.

Declining commodity currencies underscore growth path divergence within major developed economies.

With Greece’s survival in the EU extended, and Greek banks partially opening today cyclical assets rallied. However, banking restrictions remain after being shut for three weeks and the ECB has injected €900m worth of fresh liquidity taking the country’s emergency liquidity assistance to €89.9bn. With Grexit fears easing and the US ready to raise rates later this year, gold has fallen out of favour and its price fell sharply today. However we believe that rate rises will be gradual and are more than priced-in to gold already and we are clearly not out of the woods on the Greek saga.

Commodities

Historic accord on Iran deal paves way for lower oil prices. The landmark deal of the six world powers with Iran to ease nearly a decade of sanctions in exchange for restricted nuclear enrichment activity is expected to apply further downward pressure to the price of oil. The International Energy Agency has said that Iran has at least 17m barrels of crude oil stored at sea ready to be shipped to an already oversupplied global market. In addition Saudi Arabia reported its crude oil production hit a record 10.6m barrels a day in OPEC’s latest monthly oil report. Meanwhile, US Crude stockpiles remain almost 100m barrels above the five-year average for this time of the year according to U.S. Energy Information Administration. We believe that after an initial correction, high cost oil producers will cut back on production paving the way for price increases in the future.

Equities

Positive Chinese data, Q2 earnings and central bank meetings help fuel equity rally. China dominated the data landscape with better-than-expected annual GDP (7% vs consensus expectations of 6.8%), industrial production (6.8% vs 6%) and retail sales (10.6% vs 10.2%) figures. Although viewed with skepticism, the releases helped reverse some of the losses on major global equity bourses. The Q2 earnings season added further momentum as 60% and 70% of the companies that reported earnings so far beat estimates in Europe and US, respectively. Central bank comments in the US and UK echoed the possibility for a rate rise on the back of improving economic data. While in Europe ECB president Draghi confirmed the asset purchase program was proceeding smoothly and helped allay investor concerns over Greece’s exit.

Currencies

Declining commodity currencies underscore growth path divergence within major developed economies. The Canadian dollar declined nearly 2.5 per cent against its US counterpart on the back of rate cut by the Bank of Canada and downward revisions in its growth forecasts. The Pound advanced to its highest level against the Euro since 2008 although there was no change in policy underlined in this week’s Bank of England monetary policy meeting except the Bank of England governor Mark Carney’s warning of a possible rate rise to reflect economic momentum. Looking ahead weaker dairy prices and lower CPI reading in June lead us to expect a rate cut by the Reserve Bank of New Zealand by 25bps to 3.00% this week. Antipodean currencies, AUD &NZD, are likely to remain under pressure as long as negative sentiment pervades the outlook for China.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FSA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction.  No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

Will the Federal Reserve become impatient?

Will the Federal Reserve become impatient?

ETFS Multi-Asset Weekly Will the Federal Reserve become impatient?

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Unabated crude oil inventory growth and lack of storage reverse prior week’s gains.

UK and mainland bourses diverge.

Patience could derail US Dollar rally.

Central bank activity will once again dominate markets this week. The US Federal Open Market Committee will convene this week with a post-meeting press conference. Removal of its promise to remain “patient” could be seen as a trigger to raise rates in June. The Swiss National Bank which has earned a reputation for surprising will also announce a rate decision this week. The removal of the FX floor in January has deepened deflation and a further rate cut appears warranted. Meanwhile the Bank of England will release minutes for its last meeting offering an insight into the central bank’s views.

Commodities

Unabated crude oil inventory growth and lack of storage reverse prior week’s gains. Despite US oil rigs being shut off at an unprecedented rate, oil inventories continue to grow. With the WTI curve in contango many traders have sought to put oil in storage to profit from an eventual spot price rebound. That had helped put a floor on prompt month WTI. However, with storage getting close to full capacity, the glut of oil is likely to enter the market and pull prices down. The EIA expects US oil stocks to continue to increase over coming months. Production cuts will need to accelerate to tighten supply and help prices increase. WTI and Brent fell 7.3% and 5.6% last week more than reversing the prior week’s gains. The USDA World Agriculture Supply and Demand Estimates Report surprisingly downgraded expected wheat stocks for this year by 1 million bushels, pushing wheat prices almost 6% higher.

Equities

UK and mainland bourses diverge. The DAX and FTSE MIB continued their ascent as the European Central Bank began to prime the pumps of the euro area financial system with unprecedented amounts of quantitative easing. The mining and energy-heavy FTSE 100 was dragged lower by weak commodity prices. Meanwhile political jostling in the run-up to the UK General Election in May and the 2015 Budget this week has unsettled investors. The UK chancellor has promised to stick to austerity dimming hopes of any pre-election giveaways. Stronger than expected Chinese loan growth and rapidly expanding exports drove optimism in China’s domestic equity market, with the MSCI China A-Share index gaining 2.4%. Global equity market sentiment this week will be driven by the FOMC press conference. Any indication that the central bank is closer to tightening could trigger a broad sell-off.

Currencies

Patience could derail US Dollar rally. The US Dollar index reached the highest level in 12 years last week, alongside record speculative long positioning as the US economic recovery remains on track and investor expectations for tighter policy from the Fed contrast with those for other major central banks. The upcoming FOMC meeting will be a key gauge of the Fed’s willingness to support the economy – the risk for the USD rally is that the Fed remains patient about the timing of higher rates. Indeed, with softening US retail sales and manufacturing indicators recently, we expect that the USD will at least take a pause after the 11% gain in 2014. Meanwhile, European attention will be on the Swiss National Bank meeting, with deflation still threatening, the case for further action seems entirely justified. However, the SNB’s move to remove the EUR/CHF floor took the market by surprise and its negative rate policy has not delivered the expected results. Investors should expect more surprises from the SNB.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FSA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction.  No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.