ETF Securities Research Blog

PDVSA’s selective default risks further oil outages

Petróleos de Venezuela’s (PDVSA’s) debt swap earlier this week provides Venezuela’s state oil company temporary relief from upcoming debt payments, but this act of “selective default” is unlikely to significantly alleviate the financial concerns for the company nor the government. Risk of oil production outage from Venezuela as a result of a potentially disruptive full blown default would drive the global oil market closer to balance and push oil prices higher. Read more…

Fed relaxed on inflation not on the economy

The latest comments by Yellen suggest that the Fed is ready to keep interest rates low for longer to get productivity growth going, even at the cost of higher inflation. We believe real interest rates will become more negative as inflation expectations rise. Such an environment is likely to increase investors’ hunt for yield. Read more…

GBP takes a mysterious pounding

The overnight flash crash for Sterling suggests that thin liquidity and computerised trading algorithms were at play, after a sharp 6% decline pushed Sterling to 31-year lows. While the trigger for the GBP plunge remains uncertain, we can, with a good degree of certainty, rule out that fundamental information was the cause. Read more…

Filling in the Brexit blanks

GBP has suffered further knee-jerk declines after UK Prime Minister May stated that the two-year timeframe for the UK’s negotiations to leave the EU will begin ‘no later than the end of March’ 2017. The ‘bad news’ is already priced in to GBP… Read more…