Etikett: EUR

Year of Surprise

ETF Securities Year of SurpriseYear of Surprise

FX Weekly FX 2016 Review – Year of Surprise

Highlights

  • 2016 has been full of surprises and can be divided into three distinct phases defined by the EU referendum and US election.
  • Currently the market is in a period of re-pricing due to Trump’s proposed fiscal expansion plans.
  • The USD looks likely to hold onto recent gains, while the EUR look vulnerable to political uncertainty in the year to come.

Against all odds

Surprises have been commonplace in 2016 and have ensured that volatility has remained a prominent feature of the world’s currency markets. The year can almost be divided into three distinct phases marked around the shock outcomes in both the EU referendum and the US presidential election. In the period up to, and the month following, the Brexit vote, concerns over the economic impact of the referendum and reduced expectations of monetary tightening in the US saw safe havens like the JPY soar against the GBP and USD (rising 26% and 16% respectively from 1st January to the 6th July). These moves moderated somewhat until the US election, where Trump’s shock victory ushered in a complete shift in market assumptions and a corresponding re-pricing of financial assets. This is the current phase that we find ourselves in, characterised by the strongest trade weighted USD in over 14 years and a sharply weakening JPY. Going into 2017, we see healthy prospects for US growth and inflation buoying the USD, while in Europe the single currency risks being pressured by political uncertainty.

Click to enlarge

US reflation?

Markets appear to have interpreted Trump’s victory as a signal that the US will benefit from a large fiscal stimulus and infrastructure package in the years to come, helping to deliver both growth and inflation. While a lot of the details surrounding Trump’s future plan are currently uncertain, what seems clear is that the recent increase in inflation expectations have prompted the US Federal Reserve to pursue a more aggressive rate hike path. Should they follow through with the proposed three hikes in 2017 we see recent gains in the USD as being broadly sustained, although a near term pullback in the next few months may be due.

Populist sentiment tested

In Europe, scheduled parliamentary and presidential elections in a majority of the bloc’s largest nations have potential to test the Euro. Matteo Renzi’s recent resignation is a signal that anti-establishment sentiment on mainland Europe remains elevated and the growth of populist parties is not as remote a risk as market participants once thought. Combined with a European Central Bank (ECB) committed to at least another 12 months of asset purchases, risks for the EUR appear skewed to the downside.

Transitional Brexit deal to be brokered

Prospects for the GBP are centred on the progress of Brexit negotiations and the UK government’s ability to deliver an effective transitional agreement offering protection for Britain’s more exposed sectors, such as finance. We remain bullish on the currency and believe that it is currently trading near its structural nadir (see: GBP reaches rock bottom). However, it will remain volatile as markets scrutinise any plan Theresa May puts forward before the self-imposed March deadline for Article 50.

Investors wishing to express the investment views outlined above may consider using the following ETF Securities ETPs:

Currency ETPs

GBP Base

ETFS Long EUR Short GBP (GBUR)
ETFS Short EUR Long GBP (URGB)
ETFS Long USD Short GBP (GBUS)
ETFS Short USD Long GBP (USGB)

USD Base

ETFS Long GBP Short USD (LGBP)
ETFS Short GBP Long USD (SGBP)
ETFS Long EUR Short USD (LEUR)
ETFS Short EUR Long USD (SEUR)

EUR Base

ETFS Long USD Short EUR (XBJP)
ETFS Short USD Long EUR (XBJQ)
ETFS Long GBP Short EUR (EUGB)
ETFS Short GBP Long EUR (GBEU)

3x

ETFS 3x Long USD Short EUR (EUS3)
ETFS 3x Short USD Long EUR (USE3)
ETFS 3x Long GBP Short EUR (EGB3)
ETFS 3x Short GBP Long EUR (GBE3)
ETFS 3x Long GBP Short USD (LGB3)
ETFS 3x Short GBP Long USD (SGB3)
ETFS 3x Long EUR Short USD (LEU3)
ETFS 3x Short EUR Long USD (SEU3)

ETFS 3x Long USD Short GBP (USP3)
ETFS 3x Short USD Long GBP (PUS3)
ETFS 3x Long EUR Short GBP (EUP3)
ETFS 3x Short EUR Long GBP (SUP3)

5x

ETFS 5x Long GBP Short EUR (EGB5)
ETFS 5x Short GBP Long EUR (GBE5)
ETFS 5x Long USD Short EUR (5CH5)
ETFS 5x Short USD Long EUR (5CH6)
ETFS 5x Long USD Short GBP (USP5)
ETFS 5x Short USD Long GBP (PUS5)

Basket

ETFS Bullish GBP vs G10 Currency Basket Securities (LGBB)
ETFS Bearish GBP vs G10 Currency Basket Securities (SGBB)
ETFS Bullish USD vs G10 Currency Basket Securities (LUSB)
ETFS Bearish USD vs G10 Currency Basket Securities (SUSB)
ETFS Bullish EUR vs G10 Currency Basket Securities (LEUB)
ETFS Bearish EUR vs G10 Currency Basket Securities (SEUB)

The complete ETF Securities product list can be found here.

Important Information

This communication has been provided by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”). The products discussed in this document are issued by ETFS Foreign Exchange Limited (“FXL”). FXL is regulated by the Jersey Financial Services Commission.

This communication is only targeted at professional investors. In Switzerland, this communication is only targeted at Regulated Qualified Investors.

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

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

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

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

Short and/or leveraged exchange-traded products are only intended for investors who understand the risks involved in investing in a product with short and/or leveraged exposure and who intend to invest on a short term basis. Potential losses from short and leveraged exchange-traded products may be magnified in comparison to products that provide an unleveraged exposure. Please refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks.

Securities issued by FXL are direct, limited recourse obligations of FXL alone and are not obligations of or guaranteed by any of Morgan Stanley & Co International plc, Morgan Stanley & Co. Incorporated, any of their affiliates or anyone else or any of their affiliates. Each of Morgan Stanley & Co International plc and Morgan Stanley & Co. Incorporated 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.

The Morgan Stanley Indices are the exclusive property of Morgan Stanley & Co. Incorporated (”Morgan Stanley”). Morgan Stanley and the Morgan Stanley index names are service mark(s) of Morgan Stanley or its affiliates and have been licensed for use for certain purposes by ETF Securities Limited in respect of the securities issued by FXL. The securities issued by FXL are not sponsored, endorsed, or promoted by Morgan Stanley, and Morgan Stanley bears no liability with respect to any such financial securities. The prospectus of FXL contains a more detailed description of the limited relationship Morgan Stanley has with FXL and any related financial securities. No purchaser, seller or holder of securities issued by FXL, or any other person or entity, should use or refer to any Morgan Stanley trade name, trademark or service mark to sponsor, endorse, market or promote this product without first contacting Morgan Stanley to determine whether Morgan Stanley’s permission is required. Under no circumstances may any person or entity claim any affiliation with Morgan Stanley without the prior written permission of Morgan Stanley.

Gold retains its popularity despite record sentiment highs

Gold retains its popularity despite record sentiment highs

Commodity ETP Weekly – Gold retains its popularity despite record sentiment highs

  • Flows into gold ETPs did not abate last week, with inflows totalling US$121mn, alongside silver ETP inflows of US$17mn.
  • Crude oil ETPs recorded a 7th consecutive week of inflows of US$193mn last week.
  • Industrial metal inflows continued, with the majority of the US$14mn accruing to copper ETPs.

Download the complete report (.pdf)

Flows in to gold did not abate last week, with inflows totalling$121mn, alongside inflows of US$17mn into silver ETPs. CFTC futures data highlights sentiment for gold being close to an all-time-high (mean-adjusted) since data was first collected in 1995. Nonetheless, we continue to see very little flow into short gold ETPs, with inflows of $0.8m. Historically strong inflows into long positions have been accompanied with steady rises in short positions. Whilst sentiment remains exceptionally high for gold we believe it is justified for several reasons. Firstly, negative yields across Europe mean gold carry costs are now less than holding a Swiss or German government bond. Secondly, populist politics in Europe and the US remain prevalent, with many populist parties leading in polls. Finally, the US monetary policy trajectory remains unclear due recent US Dollar strength and mixed economic data. Our fair value for gold remains at US$1440/oz.

Crude oil ETPs recorded a 7th consecutive week of inflows of US$193mn, although unsurprisingly following price returns of 12% over the last few weeks, inflows have slowed this week to US$5mn compared to US$113mn the previous week. We believe the oil price will remain range bound from US$40 to US$55 per barrel.

Industrial metal inflows continued with flows over the week of US$13.9mn. The majority of inflows accrued to copper ETPs, totalling US$10.4mn. We believe this is due to state owned enterprises in China having accelerated their fixed asset investment in the first half according to data recently released by the CEIC, rising 23.5% compared to 9.9% in H2 2015. In general, industrial metal prices remain below marginal cost and are in supply deficit which is likely to be exacerbated by continued aggressive capital expenditure cuts by miners.

In currencies, we saw investors preferring the EUR against GBP, after a raft of weak economic releases from the UK, inflows into the currency pair EUR/GBP rose by US$6.3mn. Inflows into USD suggests investors have mixed views on the direction of the trajectory of the US Federal Reserve (FED) policy, with inflows into long and short USD pairs both totalling US$2.1mn, since the July FED meeting.

In equities there has been continued appetite gold miners with inflows of US$6.8mn for the week. Given the recent stellar performance we are cautious on how much the recent gold rally will expand margins versus the longer-term impact on earnings from aggressive capital expenditure cuts. By our measures we see the recent rise in gold miner prices reflecting US$1550/oz. for the gold price, well above our fair value estimates.

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.

Brexit First impressions

Brexit First impressions

ETF Securities FX Weekly – Brexit First impressions

Weekly currency investment views from ETF Securities

Summary

  • The economic aftermath from the UK’s decision to leave the EU will take months to come clear.
  • The impact will also be felt politically as protectionist right wing parties on the continent gather momentum.
  • Italy’s constitutional referendum in October could trigger a period of political instability, which could weigh on the EUR.

Download investment view (.pdf)

For more information contact:

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

Important Information

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

This communication is only targeted at qualified or professional investors.

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

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

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

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

Den danska centralbanken sänker styrräntan för tredje gången

Den danska centralbanken sänker styrräntan för tredje gången på tio (10) dagar. Denna gång är sänkningen 0,15 procent vilket gör att styrräntan i Danmark nu ligger på 0,5 procent efter dagens sänkning.

Den danska kronan DKK, är peggad till Euron, vilket betyder att om Danmarks centralbank inte vill göra en Schweiz, det vill säga låta den danska kronan flyta så kommer centralbanken att behöva trycka upp väldigt mycket ny valuta.

Den enda börshandlade fonden med fokus på Danmark som vi har hittat är iShares MSCI Denmark Capped ETF (NYSEArca: EDEN).

  • Danmarks Nationalbank är Danmarks centralbank. Nationalbanken regleras av en lag från 1936. I lagens första paragraf står att Nationalbanken har till uppgift att upprätthålla ett säkert penningväsen i Danmark samt att reglera penningomsättning och kreditgivning. För detta syfte har Nationalbanken tre överordnade mål.
  • Prisstabilitet (låg inflation)
  • Säkra betalningar
  • Stabilitet i det finansiella systemetDanmarks Nationalbank grundades 1936. Den har liksom sin föregångare Nationalbanken i Köpenhamn som grundades 1818 varit oavhängig från danska staten. Nationalbanken i Köpenhamn bildades genom ombildning av den 1813 bildade statliga Rigsbanken.

Near-Term Risk of USD Sell-Off on FOMC

Near-Term Risk of USD Sell-Off on FOMC

Near-Term Risk of USD Sell-Off on FOMC Tonight’s FOMC meeting could provide a short-term opportunity to short the USD against major G10 currencies (EUR, GBP, JPY, CAD). However, we remain structurally bullish on the USD in the medium term.

The risk for USD could come via two avenues: the external environment affecting domestic growth and/or inflationary expectations. Either could see the recent USD strength unwind.

The FOMC is likely to continue to highlight the improvement in the domestic economy. However the Fed has a dual mandate and either could prompt a downside move in USD.

If either are highlighted, the market is likely to push back expectations for a rate hike further into Q3/Q4. At the moment, expectations are for a rate hike in September.

The FOMC has already emphasised the gradual nature of any future tightening cycle and if it stresses a slowing growth or a softer jobs outlook due to problems abroad, it is likely to be reflected in more cautious language about the upcoming tightening cycle. A potential negative feedback loop from risks to growth in the rest of the world could come from many areas: increasingly divergent political situation in the Eurozone alongside moribund growth in the periphery and Japan, geopolitical risks or the impact of a stronger USD on corporate earnings.

The inflationary environment has been relatively benign despite improving economic activity. The FOMC previously noted the impact of lower oil prices on inflation would be transitory, so any indication that there could be longer lasting effects would see rate hike expectations unwound. Indeed oil prices were on of the reasons the Bank of Canada surprised the market by cutting rates. Meanwhile wage growth remains soft and house price growth has moderated recently. As a result, any indication that inflation may not return to target as quickly as expected could also postpone a rate hike from the Fed.

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 (“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 communication 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.

This communication 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 communication nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication constitutes an advertisement within the meaning of Section 31 para. 2 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG); it is not a financial analysis pursuant to Section 34b WpHG and consequently does not meet all legal requirements to warrant the objectivity of a financial analysis and is also not subject to the ban on trading prior to the publication of a financial analysis.