NIBA - Celebrating 35 Years

NIBA Journal

Insights, analysis, and updates from the National Introducing Brokers Association

CME Updates
4 min read

Why Key Gold and Silver ETFs Are Focusing on Futures

In January, ProShares changed its silver and gold ETFs to track futures-based indexes. This marks the first time leveraged and inverse ETFs will benchmark to gold and silver futures prices. Our silver and gold ETFs (AGQ, ZSL, UGL and GLL) are changing their benchmarks from the LBMA (London Bullion Market Association) silver and gold auction prices to Bloomberg Commodity Subindexes. So how did we get here? A number of factors drove us to change the way we obtain exposure for our silver and gold ETFs, but understanding the gold and silver exchange-traded product (ETP) landscape is an important starting point. Pricing for Physical Gold and Silver Among the $60 billion in overall silver and gold ETPs, about 98 percent of the assets are in funds that hold physical commodities, including the well-known SPDR Gold Shares ETF (GLD) and iShares Silver Trust ETF (SLV). Funds that hold and transact in physical...

By NIBARead article
1 min read

FIA Spoofing, Surveillance & Supervision

The CFTC and futures exchanges continue to aggressively pursue “spoofing” cases against traders. When evidence of criminal willful intent exists, they refer certain matters to the Department of Justice for criminal prosecution. The CFTC settled its first spoofing case in late December 2016. The month prior, the DOJ obtained its first criminal conviction for spoofing. Since that time, the CFTC has expanded its enforcement efforts in this area to target firms for failing to supervise traders being investigated for spoofing activity. With this Webinar, Jim Lundy and Nicholas Wendland from Drinker Biddle & Reath LLP will explore the increased regulatory enforcement focus on failing to supervise trading activities and how to utilize supervision and surveillance efforts to best manage this risk. View Recorded Webinar | Download Presentation

By NIBARead article
Member Announcements
2 min read

Chairman's Letter - Jan 2019

Month-Long Celebrations: National Soup and National Prune Month For some, January is the opening to new beginnings. For the NIBA, it means the continuation of our commitment to our members to provide education for your business growth and a forum in which to exchange ideas. Mark your calendar now to attend the three in-person programs scheduled for 2019: April 10: NIBA Spring Meeting, New York Athletic Club, NYC July 11: 6th Annual DePaul University/NIBA Joint Symposium, DePaul University, Chicago Sept. 12: NIBA Annual Members Meeting, Illinois Tech, Chicago On January 17, the FIA will present a webinar on spoofing, surveillance and supervision. The CFTC continues to aggressively pursue spoofing cases against traders and has expanded its enforcement efforts to target firms for failing to supervise their traders. Check the FIA website for details on how to attend the webinar. CME Group has a new post by Blu Putnam entitled “Is...

By NIBARead article
CME Updates
4 min read

How Rate Changes Could Affect Consumers

The strong job market, low unemployment rate and rising wages are all good signs for the economy, but have posed a rising risk of inflation. To offset this inflation risk, the Federal Reserve has gradually raised interest rates, which has the eventual effect of slowing the economy. This continued rise in interest rates over the last two years has been both good and bad news for consumers. If you are a saver it has been positive; if you’re a borrower it has been painful. The increase in rates affects mortgages, credit cards, home equity loans and car payments to mention just a few, thereby affecting the disposable income of consumers. Costs to Homeowners Homeowners with fixed-rate mortgages are unaffected by a raise in rates but an increase in rates leads to rising interest payments on variable mortgages. For example, a half percent rise in rates on a $100,000 mortgage translates...

By NIBARead article
CME Updates
4 min read

Will Gold Rebound in 2019?

Frankincense and myrrh may no longer be traditional Christmas gifts, but the appeal of gold endures. For investors, however, the yellow metal lost a little of its luster in 2018. In late December, the gold price was down 4.5 percent ($1,255 per ounce). It had also suffered the indignity of being surpassed by palladium as the most valuable precious metal, something that last happened in 2002 when gold languished at levels around $450/oz. Gold and Real Yields Gold faced three main headwinds in 2018: rising (real) interest rates; a strong U.S. dollar; and, until recently, relatively low levels of equity market volatility. There are sound reasons to believe that these factors are evolving into tailwinds. Real yields are the difference between cash yields on bonds and the (forward) inflation rate. Real yields have been rising for most of the year and in October the U.S. 10-year real yield rose above...

By NIBARead article
CME Updates
4 min read

Three Currencies to Watch in 2019

2018 was a phenomenal year for the U.S. dollar as the trade weighted Dollar Index rose more than 9 percent from its low in February. This strength drove all of the major currencies lower from the euro to the Japanese yen and Australian dollar. Nothing mattered more than the market’s appetite for U.S. dollars in 2018. It determined where all of the major currencies were headed and had a significant impact on commodities. That influence on the market won’t change in the year ahead which is why the outlook for the dollar trumps all else. As we begin 2019, here are three currencies to watch: U.S. Dollar The good times are over for the dollar. The trend for the greenback shifted in 2018 when equities collapsed and the economy began to slow. Unfortunately there are no shortages of risks for the U.S. economy in the year ahead. Volatility is rising,...

By NIBARead article
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