Etikett: Zinc

Investor Sentiment Dulled as USD Gains Momentum

Investor Sentiment Dulled as USD Gains MomentumInvestor Sentiment Dulled as USD Gains Momentum

ETFS Multi-Asset Weekly Investor Sentiment Dulled as USD Gains Momentum

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Highlights

OPEC in focus, but production cuts unlikely.

European equities stutter despite Greek payment deferral.

USD rebounds as Euro crisis lingers ahead of the ECB meeting.

Drawn out negotiations over Greek finances and the potential for contagion of a Eurozone exit has dulled investor sentiment, in turn weighing on European equity. Volatility remains the focus for Chinese equities as concern over inflated valuations prompted a sharp sell-off, offsetting optimism of further stimulus from policymakers. Meanwhile, US policymakers have put rate hikes back on the agenda, and the stronger US Dollar has responded. Ahead of jobs numbers this week, we expect further USD gains. At the margin the rising USD is likely to continue to weigh on commodity markets, but a key focus will be the OPEC meeting.

Commodities

OPEC in focus, but production cuts unlikely. The premature gains in oil prices that we had seen since March 2015 started to unravel last week with WTI and Brent falling 5% and 6% respectively. A firmer US dollar had weighed on all commodities. With rig counts stabilizing, it appears that US shale producers have little incentive to tighten supply at current prices. Added to that is a growing consensus that OPEC will not cut production at its June 5th meeting. Industrial metals have shrugged off concern over softening Chinese economy, and the stronger US dollar, as supply side issues are expected to lead to shortages in a variety of metal markets in 2015. Zinc and nickel in particular should remain well supported in coming months.
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Equities

European equities stutter despite Greek payment deferral. The threat of a Greek default is hanging like Damocles sword above European equity markets. The June 5th payment deferral has given Greece some breathing space, but until there is clarity over whether Greece will stay in the Eurozone, equity benchmarks will struggle to progress. Another Greek bailout remains critical, but an agreement seems some way off after IMF chief Lagarde indicated that a Grexit remains a possibility. Meanwhile, Chinese equities lost ground as investors responded to increased margin requirements and the central bank draining excess liquidity from money markets. Chinese equity markets have been trading in a volatile manner and we expect that is unlikely to disappear in the near term, until investors see a more stable underlying economic environment. Softer economic numbers are likely to keep Chinese policymakers firmly in stimulus mode and both the Reserve Requirement Ratio and official rates could be lowered in coming months, alongside announcements surrounding additional infrastructure programs.

Currencies

USD rebounds as Euro crisis lingers ahead of the ECB meeting. Recent indications from the US Fed have put the potential for rate hikes firmly on the agenda. While Q1 US growth disappointed, a host of temporary factors, like weather and port strikes had a significant impact. Going forward, this week’s US jobs data is likely to show continued improvement in the US labour market, a key indicator that the US Fed is looking at to give it justification for tighter policy. We expect that the USD will continue to gain momentum as rising rates are quickly factored in. With growth in other developed markets, like the Eurozone and Japan struggling to gain a foothold, the risk is for further currency declines as the central banks continue to flood markets with liquidity. The ECB will also give its view on the outlook at its meeting this week.

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.

UK Averts Coalition Chaos

UK Averts Coalition Chaos

ETFS Multi-Asset Weekly

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Highlights

Arabica coffee slid 4.2% as Colombian production continues to rise.

FTSE 100 recouped weekly losses after the election result.

Euro downside risk as Greek tension mounts.

Contrary to pre-election polls, the UK has managed to secure a majority government, averting the chaos that many had expected would follow in forming a stable coalition. UK equities and the Pound Sterling strengthened on the news after a week of losses. Meanwhile, with a debt payment due to the IMF tomorrow by Greece, the market is seeking hedges against a potential accident should Euro area finance ministers fail to avoid brinkmanship in their discussions with the cash-strapped nation today. The Chinese central bank cut interest rates yesterday, providing a tailwind for Chinese equities and cyclical commodities.

Commodities

Arabica coffee slid 4.2% as Colombian production continues to rise. The Colombian Coffee Growers Federation reported that the country’s coffee production for April grew 11.06% year-on-year. However, Colombia only produces 11% of global Arabica output. Brazil who produces 45% of global output, has had significant drought damage to its coffee bushes in 2014 threatening the yield in 2015. While some were optimistic about a reversal of that damage due to beneficial rain in Minas Gerais (a key growing area) in recent months, precipitation over the past week has moderated significantly. Added to that, a firmer Brazilian Real removes a catalyst for stock-offloading by Brazilian farmers. We believe that coffee prices could benefit from a tightening in supply from Brazil. While zinc, nickel and copper rose on the hopes of tighter supply this year, aluminum fell moderating the gains from the previous week.
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Equities

FTSE 100 recouped weekly losses after the election result. With markets having braced themselves for chaos, the election results led to a relief rally when a majority government was formed. The MSCI China A-Share index fell 6.4%, moderating its gains after reaching a 7-year high the week prior. A disappointing Chinese manufacturing PMI reading and weaker trade figures deflated some of the optimism in the market. However, that disappointment let to interest rate cut effective today, which should provide the equity markets with a shot of adrenalin. Moreover, with further financial market liberalization on the cards for this year, we expect the domestic equity to undergo a period of secular expansion. This week, a number of Chinese data releases including industrial production and retail sales will help the central bank and investors assess the strength of the near-term growth.

Currencies

Euro downside risk as Greek tension mounts. The Euro has been one of the most volatile currencies this year and this week is unlikely to change that trend. We expect that this week’s Greek negotiations pose a downside threat, especially as the Euro remains elevated against the USD, despite last week’s strong jobs report in the US. We believe the soft patch in US economic activity will begin to fade and support a further rally in the USD. The British Pound was one of the strongest performing currencies last week, following the surprise Conservative majority victory in the general election. Investors will be looking ahead to the Bank of England meeting this week to gauge the central banks desire to hike rates. We expect that tighter policy is a long way off and that GBP/USD will gradually move back toward the levels it was trading at pre-election levels near 1.50.

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.

A Turbulent Week for Investors

A Turbulent Week for Investors

ETFS Multi-Asset Weekly A Turbulent Week for Investors

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Highlights

Grains continue to gain on weather disruptions in the US.

Global equities see violent gyrations.

Risk or inflation the driver for Japanese Yen (JPY)?

 

 

Global stocks and oil faced a particularly volatile week as investors digested weaker-than-expected data. The S&P 500 fell 3.4% in the week up to the Thursday 16th, while Brent crude oil fell 6.2% over the same time period. However, on Friday we started to see a partial recovery. The S&P 500 rose 1.2% and Brent gained 2.0% in just one day as central bank statements from James Bullard (US Federal Reserve) and Andrew Haldane (UK Bank of England) put forward the case to keep unconventional, loose monetary policy in place for longer.

Commodities

Grains continue to gain on weather disruptions in the US. Following the previous week’s rise on the back of stellar corn export numbers, rain disrupted the harvesting of grains in the US, leading to further gains. Wheat rose 4.8%, corn gained 2.2% and soybeans increased 2.6%. However, reports of improved weather are likely to cap these gains. Palladium fell 8.2%, dragged lower by the disappointing euro area industrial production and general capitulation in sentiment last week. Nickel, zinc and tin were also casualties of the same phenomenon, falling 7.3%, 5.1% and 4.7% respectively. Brent crude oil fell 6.2%, before staging a partial recovery on Friday. Gold rose 0.9%, as the metal maintained its position as the first port of call in times of turbulence. Futures market net speculative positioning in gold rose for the first time since August 2014

 

Equities

Global equities see violent gyrations. Developed market equities reacted excessively negatively to weaker-than-expected economic data before staging a partial recovery on Friday. The Euro STOXX® Investible Volatility Index jumped 13.9% in just one week. One catalyst to the change in sentiment on Friday was comments from James Bullard, the previously hawkish president of the St Louis Fed, pushing for a delay in ending the asset purchase programme. The FTSE MIB declined 6.7% and the DAX fell 4.7% on the disappointing industrial production data in the euro area. European bourses were weighed down by animosity between euro area members following Greece’s plans to exit its rescue programme early. Not even Chinese equities were immune from the capitulation, with China A-shares declining 1.5% on the back of weak loan growth and inflation data.

Currencies

Risk or inflation the driver for Japanese Yen (JPY)? The unwinding of global risk-on positions last week prompted a JPY rally, but we expect this will be short-lived. Positioning in JPY remains severely negative and last week’s rebound is likely to come unstuck in the near-term as investor fears fade. The minutes of the Bank of England (BoE) meeting will be the main focus for Sterling investors this week. Last month two policymakers surprised the market by voting for a rate hike (7 voted for the status quo). The market has been pushing back expectations for a rate hike from Q2 to Q3 and we expect this trend to continue. A less hawkish Board meeting will likely see the downtrend for Sterling remain in place. After last week’s oil price plunge and subsequent partial recovery, we believe that oil prices will now stabilise, removing the downward pressure on the Canadian dollar and Norwegian Krone.

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.

Commodities at a Turning Point?

Commodities at a Turning Point?

Highlights Commodities at a Turning Point?

Gold ETPs saw first inflow in five weeks
Agricultural basket ETPs saw their largest inflows since January 2013
ETFS Daily Leveraged Natural Gas received US$10.0mn of inflows, the highest since February 2014
Price gains in industrial metals attracted flows into copper, while driving profit-taking elsewhere

 

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Most commodity prices bounced back last week, attracting flows into a diverse range of commodity ETCs from gold to agricultural baskets. Gold ETPs saw their first inflows in a month as dovish Federal Open Market Committee minutes led to dollar weakness, while weak German data renewed interest in the hard defensive assets. With the exception of cocoa, all agricultural prices rose last week. Agricultural baskets saw their largest inflows in 20 months, bringing the year-to-date flows into agricultural baskets into positive territory for the first time since April 2014.

Gold ETPs saw first inflow in five weeks. Gold ETPs received US$18.3mn of inflows last week as the price of gold rose 1.2% in US dollar terms, amid US currency weakness following the dovish Federal Reserve meeting minutes release. With gold prices having fallen close to the marginal cost of production and speculative futures market shorts positions having risen close to all-time highs, last week’s bounce could trigger a short-covering rally helping to sustain momentum in the upward trend. Additionally weak data from Germany unscored the fragile state of the Euro area, bolstering the case for further easing from the European Central Bank, which may strengthen demand for gold as a monetary metal. At the same time physical demand for the gold is likely to see a seasonal lift from the upcoming Diwali celebrations in India (23rd October).

Agricultural basket ETPs saw their largest inflows since January 2013. In particular, with US$22.7mn of inflows, ETFS Agriculture (AIGA) saw its largest inflow since inception (2006). That marks a decisive change in sentiment toward agricultural commodities, where speculative futures market shorts for wheat, corn, soy and sugar have risen to near-record highs amid bumper crop expectations. Corn prices rose 6.8% last week as US exports for the crop picked up strongly. Wheat ETPs saw their first outflow in 21 weeks. Investors had been steadily building positions in wheat as the price slid to the lowest level since 2010. Last week’s 2.2% bounce in price led to some profit-taking.

ETFS Daily Leveraged Natural Gas received US$10.0mn of inflows, the highest since February 2014. While most commodity prices rose last week, energy prices bucked the trend. With US natural gas prices falling a further 3.8% last week, investors bought leveraged exposure, expecting a seasonal increase in demand to shake out the bearish sentiment toward the commodity. Price gains in industrial metals attracted flows into copper, while driving profittaking elsewhere. With the exception of tin, all industrial metal prices rose last week.

ETFS Copper (COPA) received its first inflow in six weeks. Meanwhile profit taking saw US$11.1mn of outflows from ETFS Aluminium (ALUM), adding to the US$59.9mn of outflows the previous week, reversing all of the strong inflows we saw in July and August. ETFS Zinc (ZINC) saw US$2.9mn of outflows, the largest in eight weeks.

Key events to watch this week. A raft of Chinese economic data releases will help investors gauge the strength of the economy that drives the bulk of commodity demand globally. Chinese trade, loan growth, money supply growth, inflation and FX reserves growth data are due to be released next week. US retail sales will be closely watched as the Fed assesses the capacity of the US economy to accommodate rate increases next year.

Video Presentation

 

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

For more information contact

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

 

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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.

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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.

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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

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Eurozone and UK Uncertainty Dampens Investor Sentiment

Eurozone and UK Uncertainty Dampens Investor Sentiment

Eurozone and UK Uncertainty Dampens Investor Sentiment ETFS Multi-Asset Weekly

Highlights

Coffee remains volatile ahead of Brazilian state estimates of this year’s crop.

European stocks drop as Russian sanctions and Scottish vote unnerve investors.

Commodity currencies under pressure as FX volatility rises.

Cyclical commodities and European equities fell last week as investors refrained from taking on big bets ahead of the Scottish referendum or the Federal Reserve’s meeting this week. Meanwhile the EU’s tightening of sanctions against Russia last Friday is likely to consolidate the risk-averse behavior investors have been displaying lately. A batch of weaker-than-expected data from China also dented global sentiment, although Chinese stocks appear to have shrugged of the news with the MSCI China A index posting gains last week.

Commodities

Coffee remains volatile ahead of Brazilian state estimates of this year’s crop. Coffee fell 8.4%, wiping out the past month’s excessive gains. As the Brazilian coffee harvest comes closer to an end, prices have been sent into a volatile spin as speculators guess the impact of this year’s drought on the crop. A report by CONAB, Brazil’s National Supply Company this week should give investors a better forecast of the progress of this year’s harvest. The USDA released its World Agricultural Demand and Supply report which was bullish on cotton and bearish on wheat. Cotton prices jumped 4.0%, while wheat fell 3.9%. Lean hogs and livestock also rose 2.7% and 1.1% respectively as the same report projected lower pork and beef production. Zinc, nickel and lead fell 5.7%, 5.1% and 4.9%, respectively, as a batch of weak Chinese data hurt sentiment toward the cyclical metals. At the same time the probability of the Philippines following Indonesia’s example in banning ore exports has lessened, reducing some of the premium in these metals.

Equities

European stocks drop as Russian sanctions and Scottish vote unnerve investors. Investor sentiment has been buffeted by increased uncertainty over the potential outcome of the Scottish independence vote, alongside concerns over geopolitical risks affecting growth. The ‘Better Together’ campaign appears to have recovered after the previous week pro-independence push, but uncertainty ahead of the Thursday’s vote has been weighing on European equities. The FTSE 100® Super Short Strategy Index closed the week up 2.2% – the first time since beginning of August. While the price of gold slipped for the second consecutive week ahead of the Federal Reserve’s meeting as the USD strengthened, the EURO STOXX 50® Investable Volatility Index surged 8.2%, the largest weekly gain over the past year. Meanwhile, the MSCI China A Index shrugged off weaker Chinese economic data, posting an 1% gain last week

Currencies

Commodity currencies under pressure as FX volatility rises. Rising volatility has been supportive of USD with commodity currencies recording weakness alongside the price declines experienced across a broad range of commodities. The key risk that could hamper further USD strength this week will be any dovish rhetoric from the Fed after the weaker-than-expected jobs report. Meanwhile the GBP will remain in focus with the Scottish election appearing to be a closely run event. While we expect GBP to rebound if the ‘No’ campaign against independence wins out, we feel that this would present an opportunity to sell into such rally and remain bearish on the Pound against the USD. The other key event this week will be the extent of the take up of the introduction of the ECB’s latest stimulus, the TLTRO. The ECB remains committed to increasing its support to the Eurozone economy and we expect further Euro weakness as the ECB’s balance sheet begins to balloon.

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