CHART 1: Pumping out gains
Higher gasoline prices are hurting most of us, but commodity traders who bet the right way are raking in big profits.
Gasoline futures traded on the New York Mercantile Exchange surged 26 per cent in the first quarter, the steepest gain in the period among the 35 metals, foods and fuels in the Rogers International Commodity Index.
That was also the biggest quarterly increase in a year for the futures. Prices are rising on concern closures and repairs at some of the biggest U.S. refineries will cut supplies of the fuel, just as demand takes off for the summer driving season. Speculators are betting on further shutdowns.
While the higher prices might benefit a few traders, higher fuel bills are leading to less purchasing of other products by individuals and companies, and that’s got some members at the U.S. Federal Reserve worried about the consequences for the rest of the economy.
“Some members are concerned about the impact of rising gasoline prices on consumer spending,” Sal Guatieri, an economist at BMO Nesbitt Burns, said in a note last week.
CHART 2: Investors embrace ETFs
Providers of exchange-traded funds must be smiling after their record-breaking first quarter.
Canadian ETFs attracted a net $4.83-billion in the period, the most of any quarter in the history of the domestic industry, and their assets under management swelled to an all-time high of $48.87-billion, according to estimates by National Bank Financial Inc. Although it’s still unclear why so much money flowed into ETFs between January and March, the funds – which typically mimic the returns of stock indexes or a basket of securities – have been gaining in popularity for a decade.
“For a lot of these ETFs, it goes down to fundamental factors such as low cost and exposure to a broad number of asset classes,” Daniel Straus, a researcher at National Bank, said in an interview. “The product scope has expanded, investor scope has expanded. A lot of these things have helped fuel ETF growth.”
BlackRock Inc.’s takeover of Claymore Investments Inc. has also shaken up the rankings of the biggest ETF managers in Canada. New York-based BlackRock, which is placing Claymore ETFs under its own iShares brand, is now No. 1, followed by Toronto-based Bank of Montreal and Horizons ETFs Management (Canada) Inc., part of Mirae Asset Global Investment Group of South Korea.
CHART 3: Germany vs. Europe
While much of the euro zone is tumbling into the economic abyss, Germany is enjoying its best patch in more than a decade.
After 17 years of moving roughly in the same direction, the unemployment rates in Germany and other nations in the region have dramatically diverged since mid-2009. In February, joblessness in the euro zone climbed to a 14-year high of 10.8 per cent, while Germany’s held at 5.7 per cent.
“If this isn’t a recession in the euro zone, it certainly feels like it,” said Krishen Rangasamy, an economist at National Bank Financial Inc. “Meanwhile, Germany is enjoying its lowest unemployment rate in over two decades. What gave Germany its edge is its success in controlling its labour costs relative to others.”
Expenses for labour rose 19.5 per cent in Germany between 2001 and 2011, compared with 47.3 per cent in Spain, 35.2 per cent in Italy and 27.0 per cent in Portugal, Mr. Rangasamy notes.