Etikett: Cocoa

End of FED’s Asset Purchase Program and Upside GDP Surprise Drives Rally

End of FED’s Asset Purchase Program and Upside GDP Surprise Drives Rally

ETFS Multi-Asset Weekly A Turbulent Week for Investors – End of FED’s Asset Purchase Program and Upside GDP Surprise Drives Rally

Download the complete report (.pdf)

Highlights

Nickel rebounds

Global equities cheer on upside US GDP surprise

Stimulus from central banks remains a critical driver for FX performance

 

 

Even though the end to the Federal Reserve’s bond-buying programme was well anticipated, asset prices reacted strongly. Less dovish comments and the further emphasis on data underscore the market’s reaction. Gold and silver, widely viewed as alternative currencies fell, while stock markets rallied on better-than-expected US Q3 GDP results. US non-farm pay-rolls will be closely watched this week in an era of heightened data dependency.

Commodities

Nickel rebounds. Nickel bounced back 4.1% after excessive losses in recent months. With nickel trading significantly below its marginal cost, further price falls are untenable and we are likely seeing the beginning of a structural price rally that could be repeated across a number of industrial metals. Soybean meal and soybeans rose 4.9% and 3.0% respectively on reports of dry weather in Brazil, which could delay planting. Grain deliveries by railroad were down 2% according to the Association of American Railroads, accounting for some of tightness in the US despite record production. Corn rose 3.9% as a delay in US harvesting opens up the risk of crop damage if the corn remains in the ground too long. Gold fell 2.5% as the Fed ended its bond buying programme, dragging highly correlated silver and platinum down 1.7% and 1.4% respectively. Cocoa fell 5.4% with the “Ebola-premium” dissipating due to the absence of the virus in the key producer, Ivory Coast. Coffee also fell 3.0%, as prices moderate from the spike in September.

 

Equities

Global equities cheer on upside US GDP surprise. Led by the Russell 2000 small caps index, which rose 3.5%, most broad equity indices rose last week as investors upgraded their assessment of global growth. The IVSTOXX index fell 5.5% as recent equity market volatility got crushed. A key exception to the rally was the FTSE® MIB index, which fell by 1.0%, weighed down by structural challenges in Italy and Europe more broadly. The MSCI China A-Share index rose 3.0%, shaking off pessimism related to the delay in the opening of the Hong Kong-Shanghai Connect, as investors realise that it is a matter of ‘when’ and ‘not if’ the link opens. The ROBO-STOX® Global Robotics and Automation Index TR rose 1.9% as the robotics revolution, a megatrend to rival the industrial revolution and internet boom, gained traction.

Currencies

Stimulus from central banks remains a critical driver for FX performance, as evidenced by the moves in the Euro, Yen and US Dollar in recent weeks. This week the Australian dollar and the Euro move back into focus. Both central banks will be angling for a lower currency to help boost activity that is otherwise somewhat lacking, with the Reserve Bank of Australia likely to be more forthright in its signalling. As such the AUD could struggle this week. The FOMC began the subtle shift toward tighter policy with less dovish language, and the market viewed this as a positive result nonetheless. The key sentence that we highlighted in the FOMC preview was removed, with the Fed clearly indicating that the focus will be on the data – which has been robust in recent months. Meanwhile, the Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels normal in the longer run. We remain bullish on the outlook for the USD as tighter monetary policy drives the currency higher against other G10 currencies..

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.

Global Commodity ETP Quarterly Q3 2014

Global Commodity ETP Quarterly Q3 2014

Global Commodity ETP Quarterly Q3 2014 The report includes:

  1. A comprehensive and fully up-to-date reference guide to investing in global commodity ETPs and indexes – no ETP type or geographic area is excluded. The report details the large and growing choice of commodity ETP exposures and strategies around the world.
  2. Summary analysis of global commodity ETP flows, trading volumes and AUM trends. Includes a detailed analysis of the main trends in Q3 2014 and the outlook for the rest of the year.
  3. Roll yield analysis (contango/backwardation) broken down by individual commodity and commodity sectors.
  4. Useful fundamental commodity data and information. An updated and revised inventory trends section, positioning data, futures curve developments, commodity index compositions and weights.

 

Click here to download the complete report (.pdf)

 

Throughout the Global Commodity ETP Quarterly, commodity ETPs have been grouped into six main sectors as detailed below:

  • Diversified Broad contains Diversified Broad, Diversified Broad ex Agriculture and Livestock, Diversified Broad Light Energy and Diversified Broad ex Energy basket commodity ETPs
  • Agriculture contains Diversified Agriculture basket, Cocoa, Coffee, Corn, Cotton, Grains, Rice, Softs, Soybeans, Soybean Meal, Soybean Oil, Sugar and Wheat commodity ETPs
  • Energy contains Diversified Energy basket, Biofuels, Carbon, Coal, Crude Oil, Electricity, Gasoline, Heating Oil, Natural Gas and Petroleum commodity ETPs
  • Industrial Metals contains Diversified Industrial Metals basket, Aluminium, Copper, Lead, Nickel, Tin, Uranium and Zinc commodity ETPs
  • Livestock contains Diversified Livestock basket, Feeder Cattle, Lean Hogs and Live Cattle commodity ETPs
  • Precious Metals contains Diversified Precious Metals basket, Gold, Palladium, Platinum, Rhodium and Silver commodity ETPs Exchange Traded Products (ETPs) is the umbrella term covering Exchange Traded Funds (ETFs), Exchange Traded Commodities (ETCs), Exchange Traded Notes (ETNs), US Limited Partnerships (LPs), US Guarantor and other statutory trusts. Commodity ETPs are open-ended securities listed on a stock exchange tracking an underlying commodity asset. They do not include ETPs tracking the listed equities of companies involved in commodity businesses.

If not otherwise stated, all data in the publication is in US dollars.

 

Commodity ETP Flows Resilient in the Face of Price Declines

 

Summary

 

Commodity ETPs were hit hard in Q3 2014 as a strong US dollar and concerns about China and Europé growth knocked many commodity prices down towards their production costs.

Following two consecutive quarters of increases, commodity ETP assets under management (AUM) fell by US$12.6bn to US$110.7bn, the lowest level since Q1 2010. However, close to 96% of the AUM decline was caused by price declines, with net investor outflows during the quarter a relatively resilient US$550mn.

The resilience of investor flows likely reflects a number of factors. The first is that most of the large, leveraged tactical players in commodity ETPs cleared their positions in 2013, as reflected in the large outflows that year. The bulk of investors in commodity ETPs today tend to be strategic investors with medium to long-term time horizons who tend to be less sensitive to short term price swings.

A second key factor is that with most commodities now trading near (and in some cases below) their estimated all-in or marginal costs of production, many investors with long-term investment horizons are looking at current prices as attractive accumulation levels on the view on-going production cuts and a steady structural rise in demand from increasingly wealthy large population developing countries will ultimately push prices higher.

Lastly, a large part of the commodity price declines over the past month or so has been driven by the strong rally in the US dollar and concerns about slower growth in China and Europe. US dollar strength is being driven by healthy US economic growth – a positive for commodity demand. Meanwhile, policy-makers in both China and Europe have started – and are expected to continue – to react strongly to recent signs of economic weakness.

Given the above potential positive price catalysts and the fact that many commodities are trading at their lowest levels relative to their production costs since the crisis of 2008, there are some signs tactical investors are beginning to nibble – particularly with valuations across a number of major equity and most fixed income markets looking stretched. Over the course of Q3, broad commodity index ETPs saw inflows as well as some of the more bombed out individual commodities and sectors such as agriculture, select industrial metals and natural gas.

Key Trends

 

Gold ETPs accounted for nearly 60% of the decline in global commodity ETP AUM, with AUM dropping by US$7.4bn to US$69bn. Of the AUM decline, 82% was due to the gold price decline over the quarter. While investors sold into the price decline, selling was far more muted than during the price declines of 2013, indicating most tactical investors have already exited.

 

 

After gold, platinum and palladium saw the largest outflows in Q3, with US$194mn and US$74mn of outflows respectively. Silver ETPs saw the largest inflows in Q3, with US$452mn of net new investor flows despite (or perhaps because of) the sharp price decline. Many investors appear to view the silver price below US$20/oz as a good long-term accumulation level.

 

 

Agriculture ETPs also saw inflows during the quarter as low prices brought investors into most of the grains as well as cotton.

 

Broad commodity index tracking commodity ETPs saw inflows of US$561mn in Q3 2014, indicating strategic investors are starting to view commodities as a more attractive asset class as equity and bond market valuations have become more stretched and commodity prices have declined.

 

Oil ETPs saw strong inflows in August as prices lurched lower, however in September these flows reversed as it appears some investors capitulated in the face of continued price declines. For the quarter as a whole oil ETPs saw US$83mn of outflows. Meanwhile as the natural gas fell from its heights investors started to nibble, with US$21 of inflows

 

Industrial metal ETPs saw mixed flows, with the net result a very modest US$29mn of inflows into the sector. While copper ETPs saw US$29mn of outflows, aluminium, nickel and industrial metal basket ETPs all saw inflows.

 

Summary and Outlook

 

Assuming the US maintains its current economic trajectory, the key to commodity performance and flows through the rest of 2014 and into 2015 will be how successful both Europe and China are in restimulating their economies. Stronger economic growth in both of these major markets would not only help boost commodity demand and improve general sentiment, but also likely take some of the steam out of the very strong recent US dollar rally (which has been as much about weakness abroad as strength at home) that has been weighing on commodity performance. Increasingly aggressive easing moves by ECB President Mario Draghi and policy-makers in China in the coming months and quarters could be the stimulus commodity markets have been waiting for.

Click here to download the complete report (.pdf)

 

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 provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority. When being made within Italy, this communication is for the exclusive use of the ”qualified investors” and its circulation among the public is prohibited.

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 document may contain independent market commentary prepared by ETFS UK based on publicly available information.ETFS UK does not warrant or guarantee the accuracy or correctness of any information contained herein and any opinions related to product or market activity may change. 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.

The information contained in this communication 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.

ETFS UK is required by the United Kingdom Financial Conduct Authority (”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.

Weak Growth Data Hits Equities, but China A Shares Buck the Trend

Weak Growth Data Hits Equities, but China A Shares Buck the Trend

ETFS Multi-Asset Weekly – Weak Growth Data Hits Equities, but China A Shares Buck the Trend

Highlights

  • Cocoa jumps nearly 10% in 2 weeks as Ebola fears grow.
  • China A-Shares buck the global equity trend and continue to rally.
  • Growth fears and volatility weighs on commodity currencies, with further losses expected.

Global equity markets and cyclical metals ended the week lower as US and European PMIs, US durable goods orders and the German IFO index came in lower than expected. China A-shares bucked the trend, with a better-than-expected flash PMI reading adding support to the market. US payrolls will be the centre of attention this week as the market judges the capacity of the US economy to absorb an expected interest rate hike in H1 2015. A strong reading will likely to be US dollar positive, which will likely keep pressure on commodities. In the medium-term, however, we believe US economic strength will ultimately be positive for global growth and commodity demand and we view commodities as good value at current prices.

Download the complete report (.pdf)

Commodities

Cocoa jumps nearly 10% in 2 weeks as Ebola fears grow. Following the previous week’s 5.4% gain, cocoa prices continue to soar. With over 70% of produced in Africa, there are fears that the spread of Ebola will hinder global supply. Côte Ivoire, which produces over 30% of global supply was been on track to produce a record high output this year. If the disease hits the country, global supply will tighten amid strong demand growth. US natural gas stocks increased by 97 billion cubic feet in the week ending September 19. This compares to an expected increase of about 100 billion cubic feet and sent prices 1.0% higher last week. Most industrial metal prices were hit by weaker-than-expected US PMIs and durable goods orders.

Equities

China A-Shares buck the global equity trend and continue to rally. Last week saw the MSCI China A index gaining 0.9% on better manufacturing PMI for September while the US and Eurozone manufacturing PMI disappointed again. The MSCI China A index has been trading above its 50 and 200 day moving averages since end of July, suggesting further potential rise in the near term. Meanwhile, lower-than-expected Michigan confidence added to the downward pressure in the US with the Russell 2000® Index dropping 4.2% over the past week. Concerns over the ECB’s capacity to restore growth in the Eurozone economy has weighed on European equity benchmarks, sending short European indices as well as the EURO STOXX 50® Investable Volatility Index upward again, by 5.7% on average for the short indices and 2.6% for the volatility index.

Currencies

Growth fears and volatility weighs on commodity currencies, with further losses expected. ‘Commodity currencies’ were the worst performing last week with the currencies of major commodity producers Australia, New Zealand, Canada and Norway coming under pressure. Volatility has risen across a number of asset classes, including the FX market, as investor uncertainty has risen on anticipation of US rate hikes in the new year. Meanwhile, a soft patch for commodity prices (also partly a reflection of concerns over global growth) has also weighed on commodity currencies. There may be some scope for a rebound in the Canadian dollar and Norwegian Krone if oil prices can rebound, but we expect that further downside is likely for the Australian and New Zealand Dollars. Concerns over China’s economic strength will likely weigh on the AUD, while NZD is likely to experience further weakness after the Reserve Bank of New Zealand revealed it had sold the largest amount of currency in seven years to deflate the currency

 

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.

Soft Growth Patch and US Rate Rise Concerns Hit Cyclical Assets

Soft Growth Patch and US Rate Rise Concerns Hit Cyclical Assets

Soft Growth Patch and US Rate Rise Concerns Hit Cyclical Assets ETFS Multi-Asset Weekly Soft Growth Patch and US Rate Rise Concerns Hit Cyclical Assets

Download the complete report (.pdf)

Highlights

Cocoa climbs to a 3-year high on Ebola virus concerns.

Equity markets hit resistance near all-time highs.

US dollar continues to strengthen as Fed signals policy normalisation.

To read the complete report, please click here

Concerns about China’s growth outlook, stagnation in Europe and expectations of higher US interest rates put pressure on cyclical assets last week. Small cap and resource-linked equities were hit, a broad range of growth and interest rate sensitive commodities came under pressure as the US dollar moved higher. With China growth disappointing and Europe showing few signs of benefiting from recent ECB stimulus, markets appear on edge, particularly with expectations growing that US interest rates will start rising in H1 2015. In our view China growth will rebound later this year as government stimulus takes hold and the US recovery will help support global growth. Potential US rate increases and a strong dollar are a reflection of improving underlying US fundamentals and ultimately that improvement should benefit many cyclical assets. Commodities, in our view, have particularly strong rebound potential given their underperformance in recent years and many now trading at or below the marginal cost of production.

Commodities
Cocoa climbs to a 3-year high on Ebola virus concerns. Fears the Ebola virus may spread to the Ivory Coast, cocoa’s biggest producer, prompted a 5.4% gain in cocoa prices last week. With bordering Liberia and Guinea already plagued by the disease, there are concerns it is only a matter of time before the virus reaches the country. At the same time, the sugar price fell by 4.5% last week as the Brazilian cane harvest continued to progress well and monsoon rains in India have been steadily catching-up after a delayed start. Sugar is likely to remain under pressure in the near term as supply expectations for Brazil and India (together accounting for close to 40% of global output), remain abundant. The wheat price also continued to slide last week, dropping to a 4-year low. However, with wheat priced for perfect growing conditions, any small setback in weather could drive a price rally.

Equities

Equity markets hit resistance near all-time highs. With the exception of Germany, European equity benchmarks ended the week flat and the EURO STOXX 50® Investable Volatility Index dropped 7.8% over the past week, back near its all-time low. While a better-than-expected ZEW survey provided a boost to the LevDAX® x2 Index, up 2.1%, the decision of the Scots to remain part of the United Kingdom in their Independence vote last week will likely support UK equities in the coming week. Meanwhile, the underperformance of the Russell 2000® Index, which covers small cap US stocks, and the S&P 500 continues, indicating that investors continue to favour blue chip over riskier stocks as US equities hover near all-time highs.

Currencies

US dollar continues to strengthen as Fed signals policy normalisation. The US Federal Reserve has just taken the first step towards raising rates: announcing an end to its QE programme at its forthcoming meeting. We expect the US Dollar to remain supported, with the Fed signalling higher rates in 2015. The Fed’s last tightening cycle lasted from 2004 to 2006, when rates rose by 5 percentage points. While the UK remains united, we view the GBP rebound following the Scottish referendum as an opportunity to add to short GBP positions. The UK’s North-South economic divide is likely to cause policymakers headaches and has the potential to postpone rate rises and weigh on GBP. Eurozone banks failed to take advantage of the unlimited funds on offer from the ECB, taking up just €83bn of the ECB’s long-term refinancing funds. The ECB’s goal of significant balance sheet growth could be harder to achieve than expected and could prolong the depressed price environment.

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.