Etikett: NZD

Risk Off to Risk On

ETFS Multi-Asset Weekly - Risk Off to Risk OnRisk Off to Risk On

ETFS Multi-Asset Weekly – Risk Off to Risk On

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Highlights

Historic accord on Iran deal paves way for lower oil prices.

Positive Chinese data, Q2 earnings and central bank meetings help fuel equity rally.

Declining commodity currencies underscore growth path divergence within major developed economies.

With Greece’s survival in the EU extended, and Greek banks partially opening today cyclical assets rallied. However, banking restrictions remain after being shut for three weeks and the ECB has injected €900m worth of fresh liquidity taking the country’s emergency liquidity assistance to €89.9bn. With Grexit fears easing and the US ready to raise rates later this year, gold has fallen out of favour and its price fell sharply today. However we believe that rate rises will be gradual and are more than priced-in to gold already and we are clearly not out of the woods on the Greek saga.

Commodities

Historic accord on Iran deal paves way for lower oil prices. The landmark deal of the six world powers with Iran to ease nearly a decade of sanctions in exchange for restricted nuclear enrichment activity is expected to apply further downward pressure to the price of oil. The International Energy Agency has said that Iran has at least 17m barrels of crude oil stored at sea ready to be shipped to an already oversupplied global market. In addition Saudi Arabia reported its crude oil production hit a record 10.6m barrels a day in OPEC’s latest monthly oil report. Meanwhile, US Crude stockpiles remain almost 100m barrels above the five-year average for this time of the year according to U.S. Energy Information Administration. We believe that after an initial correction, high cost oil producers will cut back on production paving the way for price increases in the future.

Equities

Positive Chinese data, Q2 earnings and central bank meetings help fuel equity rally. China dominated the data landscape with better-than-expected annual GDP (7% vs consensus expectations of 6.8%), industrial production (6.8% vs 6%) and retail sales (10.6% vs 10.2%) figures. Although viewed with skepticism, the releases helped reverse some of the losses on major global equity bourses. The Q2 earnings season added further momentum as 60% and 70% of the companies that reported earnings so far beat estimates in Europe and US, respectively. Central bank comments in the US and UK echoed the possibility for a rate rise on the back of improving economic data. While in Europe ECB president Draghi confirmed the asset purchase program was proceeding smoothly and helped allay investor concerns over Greece’s exit.

Currencies

Declining commodity currencies underscore growth path divergence within major developed economies. The Canadian dollar declined nearly 2.5 per cent against its US counterpart on the back of rate cut by the Bank of Canada and downward revisions in its growth forecasts. The Pound advanced to its highest level against the Euro since 2008 although there was no change in policy underlined in this week’s Bank of England monetary policy meeting except the Bank of England governor Mark Carney’s warning of a possible rate rise to reflect economic momentum. Looking ahead weaker dairy prices and lower CPI reading in June lead us to expect a rate cut by the Reserve Bank of New Zealand by 25bps to 3.00% this week. Antipodean currencies, AUD &NZD, are likely to remain under pressure as long as negative sentiment pervades the outlook for China.

For more information contact:

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

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

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

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

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

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

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

Commodity Currencies Come Under Pressure

Commodity Currencies Come Under Pressure

Trade Idea – Foreign Exchange Commodity Currencies Come Under Pressure

Pausing for a minute to reflect on something else apart from the Greek drama there are some interesting opportunities outside the EUR. Please find below some comments on the Commodity currencies (AUD, CAD, NOK and NZD) which are likely to face headwinds in coming months. Pressure is likely to come from a temporary downside correction in oil prices and further easing of monetary conditions by central banks. We believe in the longer term, there is upside to the CAD and NOK unlike AUD and NZD where we believe rates will remain depressed (see: Outlook Q3-15: What Happens When Fundamentals Reassert Over Sentiment).

Oil Prices to Push CAD & NOK Lower

Commodity Currencies Look Set to Fall

Commodity currencies (AUD, CAD, NOK and NZD) are likely to face headwinds in coming months. Pressure is likely to come from a temporary downside correction in oil prices and further easing of monetary conditions by central banks. We believe in the longer term, there is upside to the CAD and NOK unlike AUD and NZD where we believe rates will remain depressed (see: Outlook Q3-15: What Happens When Fundamentals Reassert Over Sentiment).

CAD & NOK – Oil Price Influence

Last year’s decline in oil prices has yet to dent global oil production. OPEC has kept production stubbornly high in effort to maintain market share, while US shale producers have managed to exploit efficiency gains in order to maintain output levels. The market has taken confidence from the first sign of strength in oil demand and still anticipates production cuts, which in the last few months, have kept oil prices well supported in the US$65-60 range.

Oil Prices to Push CAD & NOK Lower

We believe the rebound in oil prices in the early part of the year was slightly premature and could partially undermine rebalancing in the global oil market. As such we forecast global oil production remaining strong into next year, which is when the impact of announced capital expenditure cuts is likely to stem oil production from conventional sources. This should see oil prices fall further in the short term only to rally in the early part of next year.

In the last few days the Greek debt crisis and negotiations surrounding Iran’s nuclear program has prompted a retraction in oil prices. Investors are expressing concern over the potential impact on oil demand from an increasingly likely “Grexit” scenario and the introduction of Iranian crude onto global markets. Despite the yesterday’s price drop, we still see risks skewed to the downside for crude prices, creating a good opportunity to go tactically short both the CAD and NOK. Lower oil prices are likely to exacerbate growth concerns in both Canada and Norway and could prompt further currency depreciation, particularly against the US Dollar.

The AUD and NZD have both recently depreciated as both nations have witnessed the price of their primary commodity exports decline. In Australia, weak sentiment towards Chinese growth prospects and oversupply has caused the price of coal and iron ore to crumble. Similarly, in New Zealand excess global production and subdued demand has seen dairy prices collapse.

In response, the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) have cut benchmark interest rates in an attempt to buoy growth and stabilise falling inflation. Furthermore, in most recent media statements, both institutions have highlighted the importance of further currency devaluation in supporting economic objectives. Thus, we believe that further interest rate cuts could be in store, which makes the medium term outlook for both the AUD and NZD bearish. Given this outlook, we believe investors would likely benefit from acquiring short exposure to both AUD and NZD.

Commodity Export Prices Have Plunged

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

Currency ETPs
EUR Base

ETFS Long AUD Short EUR (EUAU)
ETFS Short AUD Long EUR (AUEU)
ETFS Long CAD Short EUR (ECAD)
ETFS Short CAD Long EUR (CADE)
ETFS Long NOK Short EUR (EUNO)
ETFS Short NOK Long EUR (NOEU)
ETFS Long NZD Short EUR (EUNZ)
ETFS Short NZD Long EUR (NZEU)

GBP Base

ETFS Long AUD Short GBP (GBAU)
ETFS Short AUD Long GBP (AUGB)
ETFS Long CAD Short GBP (GBCA)
ETFS Short CAD Long GBP (CAGB)
ETFS Long NOK Short GBP (GBNO)
ETFS Short NOK Long GBP (NOGB)
ETFS Long NZD Short GBP (GBNZ)
ETFS Short NZD Long GBP (NZGB)

USD Base

ETFS Long AUD Short USD (LAUD)
ETFS Short AUD Long USD (SAUD)
ETFS Long CAD Short USD (LCAD)
ETFS Short CAD Long USD (SCAD)
ETFS Long NOK Short USD (LNOK)
ETFS Short NOK Long USD (SNOK)
ETFS Long NZD Short USD (LNZD)
ETFS Short NZD Long USD (SNZD)

3x

ETFS 3x Long AUD Short EUR (EAU3)
ETFS 3x Short AUD Long EUR (AUE3)
ETFS 3x Long CAD Short EUR (ECA3)
ETFS 3x Short CAD Long EUR (CAE3)
ETFS3x Long AUD Short GBP (AUP3)
ETFS 3x Short AUD Long GBP (SAP3)
ETFS 3x Long AUD Short USD (LAU3)
ETFS 3x Short AUD Long USD (SAU3)

5x

ETFS 5x Long AUD Short EUR (EAU5)
ETFS 5x Short AUD Long EUR (AUE5)
ETFS 5x Long CAD Short EUR (ECA5)
ETFS 5x Short CAD Long EUR (CAE5)

Currency Baskets

ETFS Bullish USD vs Commodity Currency Basket Securities (SCOM)
ETFS Bearish USD vs Commodity Currency Basket Securities (LCOM)

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 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.

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. 126

Greece The Dangerous Game of Brinkmanship Continues

Greece The Dangerous Game of Brinkmanship Continues

ETFS Multi-Asset Weekly – Greece The Dangerous Game of Brinkmanship Continues

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Highlights

Energy rallies while agriculture pares recent gains.
China A-shares rally on positive indications from MSCI.
Commodity currencies diverge.

Talks between Greece and its creditors collapsed over the weekend adding a further blow to the country’s precarious financial situation after the IMF pulled out discussions last week. Euro-zone finance ministers will meet again on Thursday to try to break the impasse, but the willingness from either side to see a resolution appears to be wearing thin. Elsewhere, the Federal Open Market Committee will host a press conference and present its summary of economic projections after its rate decision, where no change is expected.

Commodities

Energy rallies while agriculture pares recent gains. Natural gas gained 7.6% last week, reversing the previous two week’s losses. Higher power demand driven by air-conditioning needs tend to drive up natural gas demand in the summer period. Above average temperature forecasts for the south east of the US were the catalyst for the recent gains. There were no surprises in the weekly natural gas in storage data with a net change of 111 Bcf, close to 113 Bcf expected. Both Brent and WTI continued to defy the lack of material supply tightening news, with both benchmarks gaining close to 5%. Crude oil prices appear to be reacting to higher demand forecasts, but we believe that the higher prices themselves are likely to choke off demand. Sugar declined a further 3.5% last week, to a 6 year low, driven mainly by a depreciating Brazilian Real exchange rate. The global glut in sugar continues to weigh on sentiment. The USDA surprisingly increased wheat supply forecasts for this year. Wheat had previously been rallying following excess rain in in the key growing areas in the US.

Equities

China A-shares rally on positive indications from MSCI. MSCI declared it is a matter of “when” and not “if” they will include domestically traded A-Shares to its Emerging Market benchmark. MSCI announced that is working with the China Securities Regulatory Commission on overcoming the final roadblocks to inclusion. Furthermore they said they will not necessarily wait to their annual index review to announce inclusion. If reform maintains its current pace, we are likely to see MSCI’s concerns on capital mobility, quota allocation and beneficial ownership quickly resolved. That would pave the way for domestically traded shares to enter the emerging market index that currently has approximately US$1.5tn benchmarked against it. European bourses meanwhile traded lower as concerns about Greece’s precarious finances linger.

Currencies

Commodity currencies diverge. Citing weak commodity prices, falling import prices and subdued wage inflation, the Reserve Bank of New Zealand cut the official cash rate last week driving the NZD lower. It also expressed concern that the currency is still overvalued despite depreciating since April, and that further rate cuts are possible. The Reserve Bank of Australia also remains dovish. Meanwhile the recent bounce in oil price has supported NOK and CAD, driving the commodity currencies apart. The lack of progress in Greece’s negotiations with its creditors continued to weigh on the Euro. With the IMF pulling out of discussions, the risk of a dramatic end to the standoff between the Greek government and its creditors has now increased. As long as the Fed continues to indicate it is on track to raise rates in September, we are likely to see the US dollar remain a key haven for investors.

For more information contact:

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

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

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

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

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

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

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.