Etikett: COPA

Central Banks to Continue to Drive Sentiment

Central Banks to Continue to Drive Sentiment

ETF Securities Commodity ETP Weekly Central Banks to Continue to Drive Sentiment

WTI ETP investors become more polarised.

ETFS Platinum Trust (PPLT) sees US$11.5mn  of inflows while ETFS Palladium  Trust (PALL) sees US$11.8mn of outflows.

Coffee ETPs attract US$5.3mn in a volatile week of trading.

US$24.6mn of redemptions from ETFS Copper (COPA) followed China’s lowering of target growth.

Download the complete report (.pdf)

A better-than-expected labour market reading in the US released late last week should set the tone for cyclical optimism this week. However, the initial impact was a sell-off in gold and some cyclical assets as the market took the strong numbers as cue for the hawks at the Fed to start raising rates sooner than previously expected. With the ECB commencing its quantitative easing programme this week and further policy easing expected from a number of other countries, we believe that cyclical commodities will be able to shake off the recent bout of pessimism.

WTI ETP investors become more polarised. While inflows into long WTI continued for the 23rd week in a row, we saw a pick-up in flows into short WTI ETPs. Flows into the long products amounted to US$17.1mn (a three-week low) while flows into the short products amounted to US$9.1mn (a three-week high). A 5.4% gain in WTI led the longs to be victorious this week. US crude inventories continue to rise despite rigs being shut off. The glut in supply could continue for longer than many initially expected, driving the demand for WTI shorts. Additionally with the WTI futures curve in contango, investors in the short products will benefit from positive roll yield. Long Brent ETPs inflows of US$5.9mn reached the lowest level in four weeks.

ETFS Platinum Trust (PPLT) sees US$11.5mn of inflows while ETFS Palladium Trust (PALL) sees US$11.8mn of outflows. US investors appear to be switching between from palladium to platinum as its price is at historically attractive levels. The ratio of platinum to palladium price has fallen to 1.7 down from over 5.5 in 2009. While palladium has risen 6.4% in the past year, platinum has fallen 19.9%. As supply of the both metals tighten this year with a number of South African mines cutting back on production, platinum has the potential to make catch-up gains. Anglo American Platinum Ltd last Monday confirmed its plans to divest its Union and Rustenburg mines by selling or listing them as stand-alone companies.

Coffee ETPs attract US$5.3mn in a volatile week of trading. Coffee fell 6.6% on Tuesday and then rose 6.2% on Wednesday in a particularly volatile week. Continued rain in Brazil, the key producer of Arabica coffee, and increasing production in Colombia drove the price weakness. However the sharp rebound on Wednesday came amidst an interest rate hike by the Brazilian central bank. Prior Brazilian Real weakness contributed to stock off-loading by Brazilian coffee farmers. The Real appreciation that followed the rate rise could help tighten supply. The drastic decline in coffee prices in the past month appears overdone given the damage to coffee bushes had largely taken place in 2014 and the recent rain can do little to reverse that.

US$24.6mn of redemptions from ETFS Copper (COPA) followed China’s lowering of target growth. With China consuming approximately 40% of total global copper supply, its new growth target of around 7% from around 7.5% last year, has been seen to hurt demand for copper. However, we believe tightening supply will mitigate that potential loss of demand.

Video Presentation

Nitesh Shah, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

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 provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.

This is a strictly privileged and confidential communication between ETFS UK and its selected client. This communication contains information addressed only to a specific individual and is not intended for distribution to, or use by, any person other than the named addressee. This communication (i) is provided for informational purposes only, (ii) should not be construed in any manner as any solicitation or offer to buy or sell any securities or any related financial instruments, and (iii) should not be construed in any manner as a public offer of any securities or any related financial instruments. If you are not the named addressee, you should not disseminate, distribute or copy this communication. Please notify the sender immediately if you have mistakenly received this communication. 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 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.

Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

Historical performance is not an indication of or a guide to future performance.

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.

Risk Warnings

Any products referenced in this document are generally aimed at sophisticated, professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant product issue. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may valued in currencies other than those in which there are priced and will be affected by exchange rate movements. Investments in the securities which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutional investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investments with a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor. Investors should refer to the section entitled ”Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in any securities referenced in this communication.

If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.

Gold in Demand as Global Risks Linger

Gold in Demand as Global Risks Linger

Commodity ETP Weekly Gold in Demand as Global Risks Linger

Highlights

Global risks drive US$435mn of inflows into long gold and oil ETPs.
Arabica coffee remains in focus on low crop expectations.
Price correction prompts US$6.3mn of inflows into ETFS Copper (COPA)

Download the complete report (.pdf)

 

Gold ETPs saw the largest inflows since August 2012 last week, as lingering global risks lifted demand for safe havens. Fears of a further slump in the euro following the ECB quantitative easing announcement last week, and Greece once again threatening the Eurozone’s unity alongside continued geopolitical risks, are likely to continue to buoy gold prices and lift demand for alternative stores of value.

Global risks drive US$435mn of inflows into long gold and oil ETPs. Although the announcement of quantitative easing (QE) by the European Central Bank (ECB) was widely anticipated, the overall size was larger than expected. At EUR60bn a month until September 2016, the ECB will purchase more than a EUR1trn over the course of the programme. The ECB clearly wants the Euro area to move out of a deflationary mind-set. Fear of a further slump in the Euro as the ECB’s looks to boost its balance sheet buoyed the gold price and prompted US$294mn of inflows into our long gold ETPs. Safe havens are likely to remain in demand this week after the Syriza party won the Greek election yesterday, raising prospects that the country will seek to renegotiate the terms of its international bailout. At the same time, oil prices trended higher on Friday as news of Saudi King Abdullah’s death added to uncertainty in energy markets. While prices might remain weak for some time, inflows into long oil ETPs have totalled over US$572mn since the beginning of the year, showing investors are becoming increasingly confident in a price rebound.

Arabica coffee remains in focus on low crop expectations. Long coffee ETPs saw US$4mn of inflows last week as CONAB, the Brazilian forecasting authority, revised down its forecasts for the 2015/16 crop. Brazil is the biggest producer of Arabica coffee with 45% of global production. The development of the coffee trees in the country has been disappointing so far following extreme drought conditions last year. Although rainfall in November had eased the situation somewhat, since then the weather has turned dry again. This could result in a substantially lower crop this year and could prompt a price rally.

Price correction prompts US$6.3mn of inflows into ETFS Copper (COPA). Strong back-to-back weekly inflows into long copper ETPs highlights that investors deem the recent price slump excessive. China’s latest statistics showed that the country grew more than expected in 2014, at 7.4%, easing fears of a hard landing. Although China is turning its focus from construction and export dependent manufacturing to domestic consumption, demand for copper has remained strong in 2014, with imports rising for the 5th consecutive month in November. While low energy prices have dragged down metal prices by reducing their cost of production, we think negative sentiment, rather than weak fundamentals, is weighing on the copper price at the moment.

Key events to watch this week. This week Europe will remain in focus, as the new Greek government seeks to renegotiate the terms of its bailout that is set to expire at the end of February. After the BOC and the ECB surprised markets by cutting rates and announcing a full-blown QE programme respectively, the FOMC meeting on Wednesday will be closely monitored by investors for any signs of a delay in tightening by the Fed. Gold would likely benefit from the Fed highlighting any potential spill-over effect on the US economy from weak oil prices and global risks.

Video Presentation

 

Simona Gambarini, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

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 provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.

This is a strictly privileged and confidential communication between ETFS UK and its selected client. This communication contains information addressed only to a specific individual and is not intended for distribution to, or use by, any person other than the named addressee. This communication (i) is provided for informational purposes only, (ii) should not be construed in any manner as any solicitation or offer to buy or sell any securities or any related financial instruments, and (iii) should not be construed in any manner as a public offer of any securities or any related financial instruments. If you are not the named addressee, you should not disseminate, distribute or copy this communication. Please notify the sender immediately if you have mistakenly received this communication. 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 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.

Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

Historical performance is not an indication of or a guide to future performance.

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.

 

Risk Warnings

Any products referenced in this document are generally aimed at sophisticated, professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant product issue. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may valued in currencies other than those in which there are priced and will be affected by exchange rate movements. Investments in the securities which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutional investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investments with a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor. Investors should refer to the section entitled ”Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in any securities referenced in this communication.

If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.

Gold Back in Favour

Gold Back in Favour

Gold Back in Favour

Highlights

 

Physical gold ETPs inflows hit 9-month highs.

Long WTI oil ETPs see eighth consecutive week of inflows, totalling US$10.8mn.

Silver ETPs experience third consecutive week of inflows.

ETFS Copper (COPA) received highest inflows since August.

Profit-taking prompts withdrawals of US$6.6mn in ETFS Leveraged Natural Gas (LNGA)

ETFS Soybeans (SOYB) sees largest outflow since April 2013 as El Niño probability increases.

 

Download the complete report (.pdf)

 

Gold inflows rose to their highest since February 2013 last week following a 2.4% gain in price. With gold having fallen close to its marginal cost of production (which we estimate at US$1100/oz), investors increasingly believe that mine production will be cut in 2015, helping to tighten supply. At the end of this week the Swiss population will vote on whether to require their central bank to hold 20% of its assets in gold. While opinion polls only show 38% of the population is in favour of the proposal, there is a risk there will be more support on the day. If the proposal does pass, we would expect a sharp rally in gold.

Physical gold ETPs inflows hit 9-month highs. Inflows into physical gold ETPs reached the highest level since early February, totalling US$131.8mn last week, on a combination of bargain hunting and potential for a ‘yes’ result at the Swiss gold referendum. We believe that the Swiss referendum could act as a catalyst for further interest in the metal as the risk of a sharp rally increases.

Long WTI oil ETPs see eighth consecutive week of inflows, totalling US$10.8mn. The OPEC meeting this week will be a pivotal moment in regaining control in a cartel that appears to have lost its way. Discount oil selling by Saudi Arabia, Iran and Iraq in Asia and the US cannot persist if the cartel is to maintain credibility and we don’t believe the institution that has survived since 1960 will choose to become irrelevant right now. We believe Saudi Arabia will have to cut production in order to soothe the increasing restlessness of the other OPEC members. We remain believe both WTI and Brent benchmarks will increase as supply tightens in 2015.

Silver ETPs experience third consecutive week of inflows. Although silver rallied alongside gold last week, the gold to silver ration still remains at its highest since 2009, indicating that silver remains considerably cheap relative to gold. Continued global growth in 2015 should bode well for industrial silver demand, with Chinese photovoltaic consumption expected to be an area of strong growth in coming years.

ETFS Copper (COPA) received highest inflows since August. Although the copper price has fallen 8.7% year to date, optimism for the metal is growing. Supply surplus forecasts are slowing transforming to supply deficits and demand for industrial metals in general is likely to gain traction as China’s stimulus policy starts to have its desired effect.

Profit-taking prompts withdrawals of US$6.6mn in ETFS Leveraged Natural Gas (LNGA). The Henry Hub natural gas price surged 12.9% last week as colder weather hit the east coast of the US. The cold snap is likely to eat into storage levels earlier in the season than initially expected. Nevertheless, the US meteorologists believe that the winter will be relatively mild allowing for a rebuild in inventory levels after the cold snap.

ETFS Soybeans (SOYB) sees largest outflow since April 2013 as El Niño probability increases. Last week, the Australian Bureau of Meteorology increased the odds of an El Niño event this winter to 70% from 50% previously. An El Niño typically improves soy growing conditions in Brazil and Argentina and will be price negative should it materialise. Investors withdrew US$7.9mn flow from SOYB.

Key events to watch this week. Preliminary Q3 GDP data scheduled to be release for the US, the UK and Canada next week, likely highlighting the buoyancy of these three countries compared to other major economies like the Eurozone and Japan. CPI data for the latter countries will give clarity on the need for further stimulus in 2015 from the ECB and BOJ

Video Presentation

 

Nitesh Shah, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

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 provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.

This is a strictly privileged and confidential communication between ETFS UK and its selected client. This communication contains information addressed only to a specific individual and is not intended for distribution to, or use by, any person other than the named addressee. This communication (i) is provided for informational purposes only, (ii) should not be construed in any manner as any solicitation or offer to buy or sell any securities or any related financial instruments, and (iii) should not be construed in any manner as a public offer of any securities or any related financial instruments. If you are not the named addressee, you should not disseminate, distribute or copy this communication. Please notify the sender immediately if you have mistakenly received this communication. 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 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.

Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

Historical performance is not an indication of or a guide to future performance.

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.

 

Risk Warnings

Any products referenced in this document are generally aimed at sophisticated, professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant product issue. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may valued in currencies other than those in which there are priced and will be affected by exchange rate movements. Investments in the securities which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutional investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investments with a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor. Investors should refer to the section entitled ”Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in any securities referenced in this communication.

If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.