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US and UK manufacturing indicators showed signs of improvement and spurred some optimism, Eurozone manufacturing remains firmly in contractionary territory. The solid US jobs data helped offset the worsening data in the Eurozone and the downgrades of several European banks, evening out the impact on risk assets. The Bank of England’s decision to resume its bond purchases (QE) and the European Central Bank’s pledge to boost the liquidity and stability of the banking system helped drive a price rally across commodities. Commodity ETPs with significant recent price declines and those that may benefit most from an improvement in risk appetite are seeing the strongest investor interest.
ETFS All Commodities (AIGC) hit by one-off net withdrawal of $256mn. A one-off corporate transaction saw significant outflows from commodity ETCs last week, with AIGC being the most affected. ETFS Physical Gold (PHAU) was also impacted by a one-off $163mn sale last week. The European outflows from physically-backed gold ETCs was partially offset by net inflows of $24.4mn into the USbased ETFS US Physical Swiss Gold Shares (SGOL), the largest inflow in two months.
Inflows into ETFS Physical Silver (PHAG) rose $15mn, the biggest inflow in 18 weeks, as relative value investors took advantage of the highest ratio of gold to the white metal in 11 months. In contrast, European and US investors continued to retreat from platinum and palladium last week with ETFS Physical Platinum and ETFS Physical Palladium recording outflows of $48mn and $51mn respectively.
All-time record outflow from ETFS Short All Commodities (SALL), as investors reduce short bets. SALL outflows totalled over $23mn last week, as better than expected US jobs numbers and UK manufacturing data eased fears of an imminent recession. Although the ECB did not cut interest rates, the ongoing unlimited liquidity measures boosted investors’ hopes, as did speculation of prompt recapitalisation of the European banking sector.
ETFS Sugar (SUGA) saw the biggest inflows since February as shrinking US stockpiles and heavy rain in the US prompted investors to anticipate a price reversal. Inflows into SUGA totalled $7.5mn last week. At the same time, ETFS Corn (CORN) registered inflows of $4.6mn, the highest in 6 weeks. Tight fundamentals and uncertainty around next week’s USDA WASDE report (due for release on October 13) saw investors anticipate a possible price correction. Profit-taking drove a third consecutive week of outflows from ETFS Agriculture (AIGA) as investors appeared to opt for tactical commodity picking.
Jump in inflows into ETFS Leveraged Natural Gas (LNGA) and ETFS Leveraged Crude Oil (LOIL) ETCs. Inflows into LOIL totalled $13.1mn, the largest in eight weeks. At the same time LNGA as saw the highest inflows in nine weeks, rising by $9.5mn, as recent price weakness attracted investors to the natural gas markets.
Source: ETFWorld – ETF Securities
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