Etikett: euro

Market polarised ahead of Jackson Hole with investors bullish on USD and gold

ETF Securities Market polarised ahead of Jackson Hole with investors bullish on USD and goldMarket polarised ahead of Jackson Hole with investors bullish on USD and gold

Commodity ETP Weekly – Market polarised ahead of Jackson Hole with investors bullish on USD and gold

  • Fifth consecutive week of inflows into long gold ETPs last week, as the market is still not pricing in much chance of a Fed rate hike in September.
  • Profit-taking snapped 7th straight weeks of inflows for crude oil ETPs with outflows recording US$82mn last week.
  • Investors boost long USD exposures ahead of Jackson hole, with pervasive bearishness for the Euro.
  • Industrial metal ETPs received inflows in six of past seven weeks.

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Gold ETPs have received inflows for five consecutive weeks, totalling US$644mn over the period. Investors perceived last week’s release of the minutes from the US Federal Reserve as relatively dovish, a positive for the gold price. However, Fed vice chair Fischer dampened sentiment somewhat, after indicating that the Fed is close to its mandated goals. As long as uncertainty remains regarding the path of US monetary policy, gold is likely to remain an investor favourite. Sentiment remains buoyant – despite moderating in recent weeks, CFTC futures data showed that net gold positions are hovering close to an all-time-high. Elsewhere in the sector, investors have cut platinum positions at the fastest rate in 17 months – since march 2015, despite strong gains in recent weeks.

Crude oil ETPs broke a 7-week stretch of inflows as profit-taking drove US$82mn of outflows. Oil prices are back in bull market territory, having rallied by over 20% since the recent lows of near US$40/bbl. Brent has breached the US$50/bbl level after reports of a possible OPEC output agreement and reduced Nigerian production resulting from extremist attacks on its pipelines. We expect to see continued profit taking as prices move closer to the top of the recent US$40-55/bbl range. The Energy Information Administration reported that US commercial crude oil stockpiles experienced a drawdown for the first time in a month last week, helping lift WTI crude.

Industrial metal ETPs received inflows in six of the past seven weeks. Inflows over the week totalled US$5.6mn, led by the strongest inflows since September 2015 into broad basket ETPs, which received US$7.7mn. Data from the World Bureau of Metals Statistics showed that all industrial metals were in deficit in the first half of 2016. As a result, investors appear to be looking for diversified exposures rather than ‘picking winners’ in the sector.

Investors take Long USD exposures ahead of Jackson hole, with inflows the highest in three weeks. With the FOMC seemingly split on the need to raise rates at the September Fed meeting, this week’s gathering of central banker at Jackson hole looms large for investors. Markets appear rather complacent, pricing in just a 20% chance of a hike. Although Fed Chair Yellen will likely highlight the need for policy tightening to be gradual, any hawkish rhetoric is likely to be met with a strong USD bid. Long USD ETPs received US$15.5mn, with the majority of positions against the Euro. Meanwhile, Long Euro ETPs experienced withdrawals of US$6.1mn, the largest in five weeks.

For more information contact

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

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Därför skiljer sig utvecklingen för ETFer åt i Norden

Därför skiljer sig utvecklingen för ETFer åt i Norden

Allt fler investerare, vare det är privatpersoner eller institutioner, ser över sina placeringar. Istället för att som innan gifta sig med en eller flera aktier väljer de istället att arbeta med långsiktiga strategier. Ett sätt som detta görs är att de använder sig av börshandlade fonder som byggstenar i en hel multistrategiportfölj. Genom att använda sig av börshandlade fonder, eller ETFer som de också kallas för, går det att bygga en stabilare och mer diversifierad portfölj med lägre korrelation, vilket är viktigt i dagens lågränte- och lågavkastningsmiljö. I teorin betyder detta att den totala avkastningen ökar medan risken minskar. Därför skiljer sig utvecklingen för ETFer åt i Norden.

Intresset för börshandlade fonder har ökat markant under de senaste åren, men enbart i Norden skiljer sig användandet åt väldigt mycket. I Finland finns det sedan många år en lång erfarenhet av att arbeta med fonder, och placerarna tog snabbt till sig konceptet med ETFer. I Sverige, precis som i Danmark, har investerarna varit intresserade av denna typ av produkt, och under de senaste åren har placerarna valt att använda dem på allvar. I Norge är användarna fortfarande nyfikna, och de använder sig av börshandlade fonder, men som ett sätt att kunna investera på enskilda marknader.

En orsak till att Finland varit snabbare att ta till sig konceptet med börshandlade fonder i förhållande till sina nordiska grannländer kan bero på att landet använder euro till skillnad från övriga nordiska länder. Genom att Finland använder sig av euro saknas den valutabarriären som placerare i Sverige, Danmark och Norge måste handskas med när de köper ETFer på XETRA i Tyskland där de listas i euro. Många börshandlade fonder handlas emellertid på NYSEArca, där de listas i USD varför det egentligen inte borde utgöra ett större problem.

Danmark är väldigt mycket ett land där investeringsklimatet är räntor och ETer kommer lite från aktievärlden så därför har det tagit lite tid. Det är väl i samband med att ränte-ETFer började bli större som intresset ökade i Danmark.

Fonder, vare det är aktiefonder eller andra sorters fonder, är idag den vanligaste investeringsformen för privatpersoner som vill inestera på finansiella marknader. Enbart i Sverige är uppskattningsvis 3 000 miljarder kronor investerade i fonder. Något som är slående är att trots att fonder är en så pass populär investeringsform så är det svårt för många kunder att få reda på vad som händer med deras investeringar eftersom information och rapportering är svårtillgänglig. Den finns men det är inte helt enkelt för en lekman att tolka den. Detta är en av de fördelar som börshandlade fonder har över traditionella fonder, eftersom det ligger i fondernas struktur att de måste vara transparanta och rapportera sina innehav dagligen. Därför skiljer sig utvecklingen för ETFer åt i Norden.

EU Referendum: investors vs gamblers

EU Referendum: investors vs gamblers

EU Referendum: investors vs gamblers. Brexit. According to some recent polling evidence, the British public has now turned toward voting to leave the European Union. We look at what investors vs gamblers are really thinking…we follow the money.

Following the real money seems like a better predictor of the referendum result than extrapolating surveys when the ‘don’t know’ voters (of which there is around 10% of polling surveys) have such a significant impact on the final outcome. Although the FT reports that the ‘Leave’ camp has the upper hand over the ‘Remain’ camp (by 3 percentage points on average), the ‘don’t knows’ are critical to the result and evidence suggests they tend toward the status quo.

Investors vs Gamblers

Gambling flows on betting website Betfair indicates that the vast majority (around 80% of gambling funds) are betting on Britain remaining inside the EU. Somewhat counter-intuitively, this is in contrast to investor flows into ETPs, which shows that 85% of total British Pound ETP funds are being deposited into products tracking short GBP positions. Although not strictly comparable, investment flows are showing a distinctly counter trend from gambling. We feel that the difference represents investors hedging potential losses in other asset classes that could be sustained if the referendum were to go the way of the ‘leave’ camp. Investment hedging is pragmatic and does not represent a underlying view that that Britain will leave the EU, in our opinion.

That being said, our base case remains that Britain will vote to remain inside the EU and that such a result is a positive one for the UK economy and the British Pound in the long run. Nonetheless, volatility has reached new extremes for GBP currency crosses. Elevated volatility levels of GBP opens up buying opportunities in the medium term as uncertainty fades.

Historically, steep falls in the Pound have presaged strong rebounds. The subsidence of volatility following the financial crisis and the Scottish referendum, led to strong gains for GBP against the Euro and JPY. With GBP being battered by the uncertainty surrounding the ebb and flow of sentiment following polling survey results, we see attractive value in the Pound, especially against the Euro and Yen, in the final lead-up to the June 23rd vote.

Martin Arnold, Global FX & Commodity Strategist at ETF Securities

Martin Arnold joined ETF Securities as a research analyst in 2009 and was promoted to Global FX & Commodity Strategist in 2014. Martin has a wealth of experience in strategy and economics with his most recent role formulating an FX strategy at an independent research consultancy. Martin has a strong background in macroeconomics and financial analysis – gained both at the Reserve Bank of Australia and in the private commercial banking sector – and experience covering a range of asset classes including equities and bonds. Martin holds a Bachelor of Economics from the University of New South Wales (Australia), a Master of Commerce from the University of Wollongong (Australia) and attained a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia.

Euro IG corporate spreads have room to tighten

Euro IG corporate spreads have room to tighten

Summary Euro IG corporate spreads have room to tighten

European credit spreads should eventually move tighter to echo the gradual economic recovery in the Eurozone.
ECB’s new corporate sector purchase programme reinforces our preference for European credit versus US credit spreads.
Since the Eurozone recovery is mainly domestically driven, we believe domestic sectors will outperform globally exposed sectors.

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The global sell-off of risky assets altered corporate bonds

The start of the year was marked by elevated financial market volatility, amid a sharp decline in Chinese equity prices and oil prices. This environment led to a downward repricing of riskier financial assets, with spreads of high yield (HY) bonds increasing more than investment grade (IG) ones. While the spread between high yield and investment grade yield rose, average corporate bond yields were broadly unchanged. Credit spreads rose mainly as a result of government bond yields falling. Yields on 10yr Treasuries and Bunds both dropped by 48bps year-to-date, to 1.79% and 0.15% respectively. Thereafter, the drops in risk free rates partly reversed as oil prices rebounded, economic data in the United States showed positive surprise and expectations of further monetary policy stimulus in the Eurozone eased investors’ fears.
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ECB set to buy IG Corporate Bonds

Interest rates cuts, as well as the effects of the European Central Bank’s (ECB) quantitative easing programmes – namely, targeted longer-term refinancing operations (TLTRO) and the expanded asset purchase programme (APP) – have contributed to improvements in money and credit dynamics since 2014. Between May 2014 and January 2016, the composite lending rate on loans to Eurozone non-financial corporations (NFC) fell by more than 80 basis points (bps) to 2.09%, according to the ECB. Moreover, the spread between interest rates charged on small loans and those charged on large loans (above 1 million euros) in the Eurozone has followed a downward path since the start of credit easing. Overall, this indicates that small and medium-sized enterprises (SME), which rely on banks for 80% of their financing, have benefited most from the ECB’s programmes. The reason why the ECB has first focused on SME is that they are critical to the recovery in the Eurozone as they provide two thirds of the jobs in the region and even more in peripherals countries. By including Investment Grade euro-denominated bonds issued by NFC established in the euro area in the list of assets that are eligible for regular purchases, the ECB is now enlarging its programme to also support larger firms.

This new programme along with the prospect for a greater divergence between the Fed and the ECB surely reinforces our preference for European credit spreads versus US credit spreads. The expected scarcity of EUR IG NFC bonds due to ECB’s purchases has pushed their prices higher. On the day following the announcement, European credit spreads for Investment Grade (IG) and High Yield (HY) tightened, by 13bps and 46bps respectively1. We believe there is room for spreads to tighten further as we get more details on the programme.
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Sector performance

The economic recovery in the euro area is continuing, albeit with signs of a moderation in growth at the beginning of the year due to a weaker external environment. In 2015, real GDP grew by 1.6%, its strongest increase since 2011. The March 2016 ECB staff macroeconomic projections forecast somewhat lower euro area real GDP growth at 1.4% in 2016 (revised down 3bps from December), at 1.7% in 2017 (revised down 2bps) and at 1.8% in 2018. The continuing improvement of the economy in the Eurozone should stimulate risk appetite and thus drive spreads tighter.
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The economic recovery in the Eurozone is mainly domestically driven, thus we generally prefer domestically exposed cyclical sectors such as Consumer Staples, Consumer Discretionary and Utilities, to globally exposed sectors, such as Chemicals, Industrials and Technology.

Year to date, Materials and Mining outperformed other sectors, with their credit spreads tightening by over 100bps and 200bps respectively. But, Materials credit spreads remain wide (at 105bps) by historical standards – average Credit Default Swap (CDS) spread since 2012 stands at 81bps. Despite its ongoing transition from investment to consumption based growth, China’s demand of aluminium, copper, nickel and zinc increased in 2015, according to data from the World Bureau of Metal Statistics. In addition, oil demand was strong in 2015, but the unexpected increase of supply more than offset the upward pressures on prices. Overall, we see room for spreads’ compression in Energy, Materials and Mining.

European corporates are still de-leveraging

Given the steady improvement in the Euro area growth trajectory, core European profit margins have improved and should continue to do so. The profitability of core European firms showed improvement, with retained earnings registering a double-digit annual growth rate in 3Q2015. European corporates increased their cash holdings to their historical highs and subsequently reduced their external financing.

European firms have not taken advantage of their improving credit quality and lower interest rates to issue more debt. Euro IG corporates issuance activity has remained stable since 2013, as European firms continue to deleverage their balance sheets. This trend should not reverse until firms foresee higher revenues from organic growth. As the recovery is likely to be gradual, we do not expect a supply shock in the Euro corporates credit market. Thus, we think there is more room for profits in the European credit market than in the US credit market, since US IG corporates began releveraging in 2011.

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1 We took the EUR iTraxx Main Index for the EUR IG bonds and the EUR iTraxx Xover as a proxy for the EUR HY bonds.

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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.

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Valutamarknaden mäter risken på den globala finansmarknaden

Valutamarknaden mäter risken på den globala finansmarknaden

Valutamarknaden mäter risken på den globala finansmarknaden Finansmarknaderna togs nyligen på sängen när Mario Draghi, ordförande i Europeiska centralbanken (ECB) meddelade en sänkning av alla ECBs styrräntor tidigare under mars. Mest notabelt var sänkningen med 10 punkter, från minus 0,3 procent till minus 0,4 procent, på inlåningräntan. Utöver detta adderade ECB ytterligare 20 miljarder euro kvantitativa lättnader vilket innebär totalt 80 miljarder på månadsbasis. ECB har också expanderat till inköp av tillgångar som företagsobligationer av hög kvalitet, vilket är en markant förändring från tidigare verksamhet. Valutamarknaden mäter risken på den globala finansmarknaden.

Nytt låneprogram som kommer att pågå i fyra år

Dessutom meddelade Draghi ett nytt låneprogram som kommer att pågå i fyra år för att göra det möjligt för bankerna att kompenseras för att ta in ECB pengar om de expanderar sin utlåning till företag i euroområdet.

De flesta av dessa åtgärder var oväntade, och allt återspeglades så klart på valutamarknaderna. Den 10 mars, den dag som Draghi tillkännagav detta, omsattes det fler valutakontrakt på den amerikanska derivatbörsen CME än vad som tidigare omsatts på börsens 44-åriga historia. Totalt sett omsattes 2 517 334 terminer och optionskontrakt, och därmed slogs rekordet från den 6 maj 2010 med 146 000 kontrakt.

Av förklarliga skäl var en hög andel av de avslut som gjordes i Euro, både terminer och optioner. Den dagen omsattes det kontrakt till ett underliggande värde på 113 500 miljarder euro. Hela volymen kan emellertid inte tillskrivas ECBs agerande. Samtidigt som ECB kommunicerade sina nyheter pågick också den så kallade terminsrullningen, något som normalt ökar på handelsvolymen.

Ett starkt år för valutahandel

Så här långt har 2016 visat sig vara ett starkt år för valutahandeln, den dagliga volymen för handeln i japanska yen mot den amerikanska dollarn hat till exempel ökat med 38 procent jämfört med året innan. Handel i den valutan kommer till stor del från marknadsaktörer som söker en fristad på valutamarknaden under tider av volatilitet.

I takt med att volatiliteten på energiråvaror och metaller har ökat har vi också sett en ökad handel mot valutor hos emerging markets, och så kallade ”råvaruvalutor”, det vill säga valutor i länder där råvaruexporten har en viktig ekonomisk betydelse. Dessa valutor inkluderar till exempel:

Australiensiska dollar 21 procent
Kanadensiska dollar 32 procent
Brasilianska real 23 procent
Mexikanska peso 35 procent
Indiska rupier 11 procent

Valutamarknaden fungerar som ett riskreducerande verktyg

Allt detta visar hur valutamarknaden speglar andra delar av finansmarknaden och fungerar som ett riskreducerande verktyg när vissa andra tillgångar visar sig vara mindre förutsägbara.

När centralbanker fortsätter att använda nya politiska verktyg och råvaror fortsätter att söka prisstabilitet, kommer handelsaktiviteten på valutamarknaderna fortsätta kräva ett vakande öga. Valutamarknaden mäter risken på den globala finansmarknaden.

Du hittar valutakurserna här, och Du hittar råvarupriserna här