Etikett: ETFS

Precious metal ETP outflows surge as sentiment sours

Precious metal ETP outflows surge as sentiment sours ETF Securities WisdomTreePrecious metal ETP outflows surge as sentiment sours

ETF Securities Weekly Flows Analysis – Precious metal ETP outflows surge as sentiment sours

Highlights

  • Precious metal weekly outflows surge amidst a stronger US dollar and rising US Treasury yields.
  • WTI’s discount to Brent widens and outflows from crude oil ETPs rise for the sixth week in a row.
  • Yen ETPs remain well bid, despite the soft economic patch reported in Q1.

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As WTI’s discount to Brent crude oil prices deepens, outflows worth US$5.4mn continue for the sixth week in a row. Brent prices surged to US$80 per barrel for the first time since November 2014; likely owing to the ongoing concerns of supply from Venezuela and Iran. The unsurprising overnight victory of President Nicolas Maduro at the Venezuelan election is likely to spark unrest within the nation and worsen the decline in Venezuelan oil production. Last week the International Energy Agency (IEA), showed signs of further tightening on the oil market, as oil stocks in OECD countries decreased in March to their lowest level in three years and dipped below the five-year average for the first time since 2014. The crude oil inventory reduction was aided by record high crude oil exports, as the deep discount of the WTI price with Brent is making US crude oil more attractive to the international buyers. In contrast to the inventory build reported by the API, the US department of Energy reported a 1.4 million barrel fall in US crude oil stocks. Furthermore, US oil rig count held steady at 844 last week after rising for six weeks in a row.

Gold ETPs faced weekly redemptions worth US$82.3mn, the highest level in 12 weeks. Gold prices faced significant pressure as the US dollar strengthened and 10-year US treasury yields crossed 3.112% last week. The yield differential of the 10-year US Treasuries versus the equivalent German government bonds of the same maturity widened to 250 basis point, marking its widest level in over 30 years. This points to further strengthening of the US dollar against the euro and more weakness ahead for gold prices as it fails to yield any interest, making it appear unattractive in the current rising rate environment. Meanwhile, gold’s historical role as a safe haven, may allow significant upside potential from the ongoing geopolitical risks emanating from protests in Gaza, uncertainty over the Iranian Nuclear agreement, US-China trade wars, the Korean conflict and progress from the coalition of populist Eurosceptic parties in Italy.

Gold prices declined for a time to their lowest level since the start of the year, falling below the psychologically important $1300 mark, such low levels should also encourage physical buying. Silver prices recouped some if its losses over the latter half of last week resulting in the gold/silver ratio declining to 78.5. Investors took profits as we saw weekly outflows from Silver ETPs surge to US$98.4mn their highest level since September 2017. Precious metal basket ETPs also saw US$12.3mn worth of 0utflows as sentiment toward the precious metals sector deteriorated.

Long Yen ETPs versus the Euro attracted the highest inflows in 10 weeks, last week. Following eight consecutive quarters of growth, the Japanese economy contracted in the first quarter as GDP contracted -0.6% more than consensus estimates owing to sluggish household consumption and capital spending. However strong corporate profitability, an upbeat global growth outlook and signs that wage pressures are starting to build provide evidence that the Japanese investment case still remains intact.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0)207 448 4330
E research@etfsecurities.com

Important Information

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 (the “FCA”).

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.

Geopolitical risks drove ETP flows last week

Geopolitical risks drove ETP flows last week

ETF Securities Weekly Flows Analysis – Geopolitical risks drove ETP flows last week

Highlights

  • Oil ETP see US$39.5mn outflows as investor take profit on 3.2% rise in oil price.
  • Gold continues to attract inflows in an environment of heightened political risk.
  • ETF investors short Italy in anticipation of a fallout this week.

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Long oil ETP see US$39.5mn outflows as investor take profit on 3.2% rise in oil price. Oil prices have risen to a to a 3½ -year high on the back of the US announcing the re-introduction of sanctions against Iran. Global oil markets have already become tight as a result of outages from Venezuela and strong compliance from the Organization of Petroleum Export Countries (OPEC) with their accord to curb production. Given that the US does not import any Iranian oil and no importing country appears to agree with the US stance, we expect only minimal compliance with the US’s extraterritorial rule. In short the sanctions are unlikely to kill Iranian oil, but the geopolitical premium is likely to linger. Some of the more recent gains are likely to be deflated as other countries increase production. Investors appear to be taking profit as the gains look unsustainable.

Gold continues to attract inflows in an environment of heightened political risk. The political calendar is busy. A meeting between Donald Trump and Kim Jong Un is on the radar for the coming month and there are many risks around the nuclear powers butting heads rather than developing a peace plan. The US’s intervention in Iran is a sign that it is re-establishing its diplomatic presence in the Middle East. Whether that will help or hinder stability in the region is yet unknown. If Iran decides to pull out of the agreement (Joint Comprehensive Plan of Action) itself, we believe the region could transcend into chaos and the proxy-war between Saudi Arabia and Iran will escalate. Long gold ETPs received US$16.7mn in inflows, while closely correlated silver ETPs received US$3.1mn.

Short FTSE MIB equities attracted its largest inflows since June 2017 as investors fear the coalition of anti-establishment parties in Italy. Short FTSE MIB ETPs gained US$3.6mn while long FTSE MIB saw US$4.5mn of outflows. There had been surprisingly little reaction from bond and equity markets surrounding the deadline set for yesterday around the forming of a coalition. We believe ETP investors have positioned for a fallout this week.

Investors appear split over aluminium’s direction. Long aluminium ETPs received US$1.9mn – largest weekly inflows since February 2018 – while short aluminium ETPs received US$1.1mn – largest weekly inflows since May 2016. Although prices have come off their highs reached last month when the US sanctions against a major shareholder of a Russian miner were announced, prices are likely to rise as these sanctions (and trade restrictions against China) come into effect.

Investors become more bullish the euro vis-à-vis the US dollar. Last week, investors bought US$9.7mn of long EUR short USD ETPs, and sold $8.3mn of long USD short EUR ETPs. Investors appear unconvinced that US dollar’s recent moderate appreciation can be sustained. Although with economic data continuing to weaken in Europe and little indication that the Federal Reserve will be deterred from raising rates another couple of times this year, we think that there is potential for rate differentials to drive the US dollar higher.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0)207 448 4330
E research@etfsecurities.com

Important Information

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 (the “FCA”).

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.

Contrarians appear to sell US Dollar and buy sugar

Contrarians appear to sell US Dollar and buy sugar

ETF Securities Weekly Flows Analysis – Contrarians appear to sell US Dollar and buy sugar

Highlights

  • US$6.7mn inflows into short USD long EUR ETPs as investors place contrarian trades.
  • Gold outflows resumed after two weeks of inflow.
  • Falling sugar prices draw out potential bargain-hunters.

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US$6.7mn inflows into short USD long EUR ETPs as investors place contrarian trades. In a week where US 10-year Treasury yield temporarily rose above 3% for the first time since 2014, which unleashed pent-up US Dollar strength, ETP investors appeared to take on a contrarian trade. The US Dollar basket rose 1.4% with particular strength against the Euro (1.6%). The Euro depreciated the most on Thursday following acknowledgment from the European Central Bank (ECB) that economic data has been weak in the recent past and that economic developments will need to be closely watched during Q2. While Mario Draghi, the ECB’s President, offered balance in comments highlighting that weakness could be due to temporary factors and come in the shadow of a strong spurt of growth at the end of 2017, the overall tone was judged by the market to be dovish. ETP investors however, appear positioned the Euro to reverse the depreciation seen last week.

Gold outflows resumed after two weeks of inflows. Rising Treasury yields and an appreciating US Dollar drove gold prices 1.1% lower and led to US$23.1 outflows from gold ETPs. That brings a break to several weeks of inflows, when gold had seen support from rising geopolitical risk. A historic summit between North Korea and South Korea last week led to an accord to completely “cease all hostile acts against each other” and work on denuclearising the Korean peninsula. That has taken some of the geopolitical premium off gold.

Falling sugar prices draw out potential bargain-hunters. Last week’s inflows of US$8.9mn into long sugar ETPs were the largest since January 2015. Sugar prices have tumbled 23% since the beginning of the year with global sugar markets amply supplied. With the EU having lifted its export quotas on sugar last year and plenty of supply coming from the major raw cane sugar producers like Brazil and India, sugar has come under pressure. However, as we switch over to the 2018/19 season, some speculate that more cane will be diverted to ethanol production in Brazil, amid higher oil prices (ethanol is alternative fuel in Brazil, with most cars able to consume either gasoline or ethanol). That could leave less cane available for sugar and potentially higher prices.

Outflows from platinum and palladium ETPs follow weak car sales. Platinum ETPs had outflows of US$7.1mn while palladium ETPs had outflows of US$10.6mn. Both metals are used in autocatalysts and so are sensitive to auto sales. European passenger car sales declined 5.3% y-o-y in March 2018 (marking the first fall in March since 2014) and commercial vehicles fell 2.5% y-o-y in March 2018.

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 (the “FCA”).

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.

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. Telephone calls may be recorded for training and monitoring purposes.

Precious metal ETP flows strengthen as trade tensions continue

Precious metal ETP flows strengthen as trade tensions continue

ETF Securities Weekly Flows Analysis – Precious metal ETP flows strengthen as trade tensions continue

Highlights

  • Bargain hunters continued to drive strong inflows into gold ETPs – worth US$16.1mn – supported by ongoing trade tensions and geopolitical risks.
  • Crude oil ETPs faced redemptions worth US$32.7mn, the highest level in five weeks, on the back of profit taking as oil prices rose for the second week in a row.
  • Outflows from nickel ETPs widened the most in 3 weeks as prices rose over concerns of further US sanctions on Russia.

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Bargain hunters drove US$16.1mn of inflows in gold ETPs, marking two consecutive weeks of inflows. Gold prices came under pressure as bond yields rose sharply. The yield on the 10-year Treasury, rose to 2.96% the highest it’s been since January 2014 following supportive comments by the Fed governor Lael Brainard, for continued gradual increases in the Federal Funds rate. Added to that, the Federal Reserve Beige book showed a solid outlook for the US economy, while noting concerns over a potential trade war. Silver ETPs received US$12.8mn, marking the fifth consecutive week of inflows. Silver prices were lifted higher by industrial metals strong performance last week and managed to outperform gold by a strong margin of 3.5%. The gold/silver ratio for a time reached 78, its lowest level since early January.

Crude oil ETPs faced redemptions worth US$32.7mn, the highest level in five weeks, on the back of profit taking. Brent crude oil price reached US$74 per barrel last week, a level last seen in November 2014. The price appreciation has been supported by a trifecta of reasons – the decline of US crude oil inventory by 1mn barrels reported by the American Petroleum Institute (API), OPEC’s commitment to production cuts and ongoing geopolitical tensions. According to the Joint Technical Committee (JTC) of those OPEC and non-OPEC countries participating in the cuts, the oversupply in the oil market is nearly over. OECD stocks are likely to dip below the five year average over the coming quarter. Prices eased a little on Friday as President Trump accused OPEC of driving up oil prices artificially. This accusation comes at a critical time for Saudi Arabia. The country needs a high oil price ahead of an IPO of its state oil company, Saudi Aramco which is seen as an important step to spearhead the restructuring of its economy.

Industrial metal basket ETPs received inflows worth US$3.9mn, in stark contrast to outflows from copper, nickel and aluminium ETPs of US$4.6mn, US$14.1mn and US$5.3mn respectively. Outflows from nickel ETPs widened the most by US$14.1mn over the last three weeks on the back of profit taking. Nickel prices rose 7.5% on Thursday marking their highest daily increase in 6½ years and putting prices at their highest level since December 2014 owing to concerns of further sanctions being imposed by the US on Russia.

European equity ETPs faced outflows worth US$5.7mn extending the prior week’s trend of outflows as investors took profits ahead of the European Central Bank meeting this Thursday. Given the raft of mixed macro-economic data in Europe, investors will be looking out for further guidance on its asset purchase program.

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 (the “FCA”).

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.

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. Telephone calls may be recorded for training and monitoring purposes.

Gold inflows strengthen as geopolitical risks take centre stage

Gold inflows strengthen as geopolitical risks take centre stage

ETF Securities Weekly Flows Analysis – Gold inflows strengthen as geopolitical risks take centre stage

Highlights

  • Geopolitical risk drives US$33.2mn into long gold ETPs and US$13.
  • 6mn into long silver ETPs.Inflows into copper ETPs rebound with US$29.1mn inflows last week.
  • US dollar ETP positions widened for the second week in a row to US$10.2mn, as investors positioned against the Euro.

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Gold ETPs attracted the largest inflows in 23 weeks as risk aversion took centre stage amidst military activity in Syria and ongoing trade tensions. Following days of sabre rattling by Mr Trump, the US, UK and France launched a missile attack on Friday in an attempt to destroy the Assad regime’s chemical weapon capabilities in Syria. In response, Russian president Vladimir Putin condemned the attack and warned that such action would inevitably lead to chaos. As the first port of call in times of political uncertainty, we expect gold to remain in demand for as long as the conflict between the US and Russia continues on the back of the Syrian crisis. In fact, for most of this year gold has been sporting its safe-haven hat.

US government shutdowns, sabre-rattling between US/Japan and North Korea, the ratcheting up of a trade war between the world’s largest economies, interactions between Russia and NATO sponsors deteriorating back to cold-war tendencies, the potential return of sanctions against Iran and the proxy war between Saudi Arabia and Iran are few of the sources of investor anxiety. Added to that, the weaker greenback has lent buoyancy to gold prices that ended last week higher by 1%. Silver prices have also been benefiting in gold’s slipstream. Silver ETPs received US$13.6mn, marking the fifth consecutive week of inflows. We continue to have a positive view on silver’s fundamentals owing to a strong industrial cycle and constrained mine supply and expect silver to play catch-up in 2018.

Inflows into copper ETPs increase by US$29.1mn, reversing the prior two weeks’ trend of outflows. Owing to their cyclical nature, industrial metal prices have come under considerable pressure as the threat of trade wars continues. Last week Peru, the world’s second largest producer of copper after Chile, confirmed its intention to produce 3mn tons (36% up over the prior year) of copper per year by 2022. While supply has been increasing, the global copper market was in a seasonally adjusted supply deficit of 155,000 tons last year as confirmed by the International Copper Study Group (ICSG). While the deficit looks set to decrease marginally on the back of higher supply, demand remains well supported. According to data from the customs authorities, China concentrate imports were up 8% over the prior year in Q1 2018.

US dollar ETPs widened for the second week in a row to US$10.2mn, primarily as investors positioned against the Euro. The rollover of the Purchasing Managers Index (PMIs) in Europe from record highs in January coupled with weaker macro-economic data in Europe last week has dampened sentiment towards the European economic recovery. We believe, the current downturn is only reflective of a midcycle pause and expect Europe’s strong economic growth trajectory to continue.

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 (the “FCA”).

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.

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. Telephone calls may be recorded for training and monitoring purposes.