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IIF: Global Fund Investors Increase Exposure to Euro Area Equities March 2, 2015 - 1:24pm

Global fund investors increased exposure to Euro Area equities in February following the ECB's announced expansion of their quantitative easing program, according to the new monthly Trends in Investment Fund Portfolio Allocation report by the Institute of International Finance.

The IIF has introduced this new monthly report to closely monitor emerging trends in asset allocation of mutual fund and exchange-traded fund (ETF) investors.

February 2015 Trends in Investment Fund Portfolio Allocation March 2, 2015 - 12:22pm Rise in mutual fund/ETF portfolio allocations to Euro Area equities, Emerging Asia: Following the announcement of the ECB’s QE program, global fund investors have increased exposure to Euro Area equities. The rise in allocations has been more pronounced for core Euro Area countries than for the periphery, reflecting in part the heightened uncertainty about the Greek financial support negotiations during this period. Another notable trend in recent weeks has been greater differentiation in allocations to emerging market assets. India, China, Indonesia, Nigeria and Chile have seen the largest rise in allocations since the start of the year while portfolio weightings for Brazil, Russia, Mexico and Hungary have declined sharply.
Weekly Insight: A Good Week for Europe February 27, 2015 - 10:48am

* Global equities at record highs as Fed stays patient
* Flash PMIs—stabilizing confidence
* Euro Area banks stopped deleveraging
* EM portfolio flows moderate despite dovish Fed
* Greece—one step back from the abyss
* Malaysia—adjusting to the oil price drop

Capital Markets Monitor Teleconference February 26, 2015 - 11:57am

Hung Tran, IIF Executive Managing Director, and Sonja Gibbs, Director of Capital Markets and Emerging Markets Policy, present the key highlights of the March CMM and take questions from participants. The call will take place at 9:00 AM EST.

February 2015 Global Economic Chartbook March 2, 2015 - 3:04pm The February edition of the IIF Global Economic Chartbook summarizes our current views on the global economy, drawing on our latest Global Economic Monitor and including a section on the cross-country implications of lower oil prices. It also updates on our latest assessment of capital flows to emerging economies, bank lending conditions in EMs and emerging market vulnerabilities. It also contains revised sections on the G3 economies.
EM Portfolio Inflows Moderate in February March 2, 2015 - 1:41pm

Portfolio flows to emerging markets moderated to $12 billion, down from $23 billion in January, according to the latest EM Portfolio Flows Tracker by the Institute of International Finance.

"EM portfolio flows have been very volatile in recent months," said Robin Koepke, an economist at the IIF and lead author of the report. "These gyrations are likely to continue in the period ahead as Fed interest rate hikes come closer and investors adjust their expectations of the likely pace of Fed tightening."

February 2015 EM Portfolio Flows Tracker February 24, 2015 - 5:14pm

EM portfolio inflows moderated to $12 billion in February from $23 billion in January. Inflows were about equally split between equity and debt instruments this month. Subdued equity and bond issuance contributed to lower portfolio flows, despite an improvement in risk sentiment. Market expectations of future Fed policy rates were volatile, but overall were a neutral factor for flows.

Country/Regional Portfolio Flows Data February 24, 2015 - 5:06pm
Portfolio Flows Tracker Data February 24, 2015 - 5:05pm
Joint IIF/GA Response to the IAIS ICS Consultation February 23, 2015 - 10:49am

On February 16, the Joint IIF/Geneva Association (GA) ICS Task Force submitted a response letter to the IAIS Risk-based Global Insurance Capital Standard (ICS) consultative document released on December 17, 2014. In general, the IIF/GA ICS Task Force supports the IAIS’ efforts in exploring various possible solutions to accommodate differences across markets, business models and product offerings across jurisdictions.

Joint associations' letters on the Fundamental Review of the Trading Book (FRTB) February 23, 2015 - 9:58am

The joint associations (ISDA/IIF/GFMA) submitted on February 20 two letters on the Fundamental Review of the Trading Book (FRTB) to the Basel Committee. The first letter is addressed to the co-chairs of the Basel Trading Book Group (TBG) and is in response to the third FRTB consultation. In addition, the letter also contains the industry's current thinking on a number of different areas, including topics in previous consultations that have not been yet addressed. The second letter is addressed to the Secretary General of the Basel Committee and expresses the industry's concerns about the timeline announced in the third FRTB consultation paper to complete the FRTB framework by the end of 2015 and continue the calibration work in 2016 and beyond.

IIF and GFMA requests extension of the QIS and consultation period for the credit risk Standardized Approach (SA) February 23, 2015 - 9:29am

Ahead of their meeting in Frankfurt on February 24, the IIF and GFMA sent a letter to the Basel Committee's Task Force on Standardized Approaches (TFSA) requesting an extension of the deadline of the QIS and for the comments on the consultative document in order to improve the quality of these exercises. The letter also recommends multiple-phased and logically-ordered data collection exercises conducted for different exposure categories.

2015: The Year of Divergence March 2, 2015 - 1:53pm

The global economy is gradually gaining momentum, led by the U.S. and Euro Area economies, but emerging economies are lagging behind, according to the IIF's latest Global Economic Monitor.

Overall, global growth is projected at 3 percent in 2015 and 3.3 percent in 2016, up from 2.6 percent in 2014. The IIF raised its forecast for mature economies by 0.2 percent to 2.3 percent, in part because of the benefits of lower oil prices on consumption. However, the outlook for emerging markets has been marked down by around half a percentage point.

"We are witnessing unusual divergences in the global economy," said Charles Collyns, chief economist at the IIF. "Where U.S. growth and a pick-up in Euro Area growth should push global growth up to its highest rate since 2011, many emerging markets are not yet sharing in the upswing, held back by home-made problems which offset some of the positives."

February 2015 Forecast in Detail February 19, 2015 - 5:28pm

Since the last November 2014 GEM, we have lowered our global growth forecast for 2015 by 0.1pp. Our reduced oil price forecast boosts mature economy growth (+0.2pp) but is weighing on EM growth (-0.7pp), led by oil exporters.

The upward revision to 2015 mature economies growth is driven by the G3 economies (U.S.: +0.5pp, EA: +0.3pp, JP: +0.2pp), even as forecasts for other mature economies have been lowered (-0.4pp).

Top Six Risks for the Global Economy February 19, 2015 - 5:46pm

Risks of a bumpy Fed exit given continued strong divergence between market and the Fed’s own rate expectations as the rate liftoff date comes closer remains on top of our list. We have lowered somewhat the Euro Area stagnation risk in response to forceful ECB easing and tentative signs of some growth acceleration, although inflation expectations remain very low. But most importantly, we have introduced the risk of a Greek exit from the Euro Area; even though we attach a low probability to this event actually materializing, the adverse spillovers to Euro Area sentiment and markets more widely are potentially serious although firewalls against contagion now look more robust. The table presents our top 6 risks by assessing (1) the probability of the risk materializing over the next 12-18 months and (2) the potential economic impact of the event, both domestically and globally.

Weekly Insight: Mixed Signals February 19, 2015 - 8:16pm

*Markets read the minutes
*Global economy—year of divergence
*Greece—close to crunch time
*Indonesia—lower inflation and revised budget allow rate cut

February 2015 Global Economic Monitor: Year of Divergence February 24, 2015 - 9:52am

2015 is shaping up as the year of divergence: mature economy growth accelerates while EMs lag behind; the Fed is set to hike rates while most other central banks are easing; the oil price drop benefits importers but hurts exporters; and Chinese growth slows as India is accelerating. The big picture across these divergent developments, however, remains a global economy that is slowly gaining speed with the U.S. and Euro Area in the driving seat.

Venezuela: Debt Default Fears Grow February 23, 2015 - 3:41pm The oil price slump has stoked external default fears and heightened risks of social upheaval. The policy response, thus far, has consisted of seeking additional FX funding and overhauling the foreign exchange system, which implies a de facto 70% devaluation of the bolivar against the dollar. Amid a sizable decline in oil revenues, the country’s high import dependency and increasing external debt repayments, reviving growth while servicing external obligations is a daunting challenge, making a default a clear and present danger.
U.S. Shale Oil: Maybe Down, But Not Out February 19, 2015 - 10:05am

The extraordinary rise of U.S. shale oil producers has led the U.S. to record crude oil production, rising nearly 4 mbd since 2008 and altering the global oil supply balance. However, high oil prices from 2010 until mid-2014 enabled high-cost operators to take on excessive debt. As prices collapsed in recent months, a large number of the independent exploration and production operators struggled to fund capital investments and manage debt, signaling an eventual decline in output. Based on an analysis of leading E&Ps, we conclude that an extended period of low prices will constrain U.S. crude output growth to only 0.3 mbd this year and 0.1 mbd next year. Over the medium term, the high price elasticity of U.S. shale supplies due to the agility of shale producers will keep the U.S. among the top global producers.

GEM REER Data February 19, 2015 - 5:48pm