User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday January 14, 2008 - 12:26:54 GMT
Lloyds TSB Financial Markets - www.lloydstsb.com/corporatemarkets

Share This Story:
| | Email

Economics Weekly - Macroeconomic themes for 2008: another strong performance by emerging economies; Weekly economic data preview - Fed Bernanke testimony, plethora of US data, UK CPI and retail sale

Economics Weekly 14 January 2008

Macroeconomic themes for 2008: another strong performance by emerging economies

After a year of volatility in global financial markets in 2007, but stronger than expected economic growth, what will 2008 bring? The short answer from our projections is more of the same. Growth in the emerging markets, led by the big four of China, India, Russia and Brazil, outperformed the global average last year, and is set to do the same again this year, see table 1. It is clear that such an outcome will have implications for the trends of inflation and interest rates and for financial market performance in general.

Economic growth to be strong once again…

Despite the doubling of oil prices and the credit crisis, global economic growth last year was above the long run average for a fifth year in succession. It was also clear that though growth in the main economies held up very well, this strong outcome was primarily due to the emerging markets, in particular China, India and Russia. But growth was also strong in all of the major oil exporters and commodity exporters of metals and minerals. There are few signs from these economies in recent months that the pace of growth is yet slackening. Oil prices remain high and demand for commodities from the emerging market giants (in terms of population) of China and India is still strong. However, we project that higher interest rates in many of the emerging market economies and currency appreciation over the past year - and likely to persist into this year - will slow down growth in 2008 compared with 2007.

...led by emerging markets...

But with oil prices still high and commodity prices in general still strong, emerging market growth will remain broad based and not confined to the largest developing economies. Continued growth in the emerging economies will also help growth in the developed economies to stabilise at or near trend rates this year. This means growth for the UK of 2.3% and for the eurozone 2%. For the US, growth is likely to remain below trend, at some 2%, as a result of the fallout from an extremely overvalued housing market slowing down and the bursting of the credit market bubble. This should be seen as good news in the medium term as the US has been consuming too much and saving too little in recent years, which meant that it was running an ever larger external deficit that threatened the stability of the global economy. A weaker currency will help to rebalance the global economy and make growth more sustainable in the years' ahead. With continued weakness in the US dollar likely this year, we look for faster export growth and sharply lower interest rates to spur economic recovery in the second half of 2008. However, once growth starts to recover, and it is clear that interest rates have peaked, the US$ could well reverse some of its decline.

...but inflation set to remain relatively high, limiting interest rate cuts

With continued strong economic growth and high commodity prices, price and wage inflation trends should remain a worry in 2008, and imply that, particularly in the emerging market economies, there is not likely to be much easing of interest rates. In the developed economies, inflation may slow, but here too any slowdown looks likely to be modest. In fact, for the eurozone, we look for higher interest rates in the second half of 2008, as the credit crisis fades but elevated price inflation remains a concern. For the UK, interest rates will fall further in early 2008, because they were raised to a high level in 2007 and so have scope to decline, given the likely slowdown in growth. But cuts in UK interest rates will be limited by a risein imported inflation from a weakening currency. For the emerging markets, inflation is likely to remain even more of a worry because of strong growth, despite appreciating currencies, and so interest rates may remain relatively high and more likely to rise than fall.

Macroeconomic themes have interesting implications for financial market activity in 2008.

How will financial markets react to these macroeconomic trends? With strong growth and high inflation, interest rates and commodity prices, the emerging markets are likely to see continued strong inward investment flows. The emerging economies equity markets should outperform the developed economies once again, see chart c. But solid global growth should make equities in total perform strongly for another year. However, stronger than currently expected economic growth may see bond yields reverse their recent lows in developed countries and rise in the second half of 2008. This would reverse the pattern of 2007 - bond yields could fall or be low in the first half of this year and rise in the second half, see chart e.

Cash rates in the developed countries could see libor rates more closely reflect repo rates, rather than be driven by worries about credit markets. But this will only occur if the credit crisis eases, even if economic growth is stronger than expected in 2008. The latter implies that corporate bonds are oversold, as corporate defaults may not rise as much as is feared. With still robust global demand, oil prices may not fall back and demand for other commodities could also remain strong, leading even more funds to invest in these assets. Food prices may also remain higher than expected in 2008, with attendant worries about inflation and so for yield curves to shift about more. All in all, the economic background suggests that we will have another year of severe and perhaps surprising financial market volatility.

Trevor Williams, Chief Economist

 

Weekly economic data preview W/c 14 January 2008

Fed Bernanke testimony, plethora of US data, UK CPI and retail sales

Economic data this week will fuel expectations that the US and UK central banks will reduce interest rates further at their next respective meetings on January 29-30 and February 6-7. The key UK focus will be latest inflation, retail sales and labour market statistics. In the US, there is a plethora of data releases, including retail sales, CPI and industrial production. Policymakers will also take note of the US Empire and Philly Fed business confidence surveys, as well as the University of Michigan consumer sentiment indicator. Speakers include Fed Chairman Bernanke's testimony on Thursday on the economic outlook. The only BoE speaker is Deputy Governor Gieve. In the euro zone, we expect the ECB to resume policy tightening later in the year. Final euro zone CPI and the German ZEW survey will be the key releases, while the ECB will release its monthly bulletin. Germany will also release its first estimate of 2007 GDP.

• UK CPI inflation is expected to remain steady but marginally above target at 2.1% in December. The RPI measure, which includes mortgage interest payments, is expected to fall to 4.0% from 4.3%, see left chart below. The convergence between the CPI and RPI measure will continue in 2008, as the Bank of England cuts interest rates. Wage deals are mostly based on the RPI measure, which remains elevated. With unemployment expected to fall again, by 6,500 on the claimant count measure in December, this may partly explain the MPC's decision not to reduce interest rates at their last meeting in early January. That being said, we expect average earnings growth to remain relatively benign at 4.0%. The MPC will examine closely official December retail sales figures, which are expected to show a 0.2% rise, which would reduce the year-on-year rate to 3.5% from 4.4%. Even though unemployment is still falling, a slowing housing market and a more cautious consumer in 2008 will lead to slower economic growth. The RICS house price survey is expected to confirm softening activity in that sector. The DMO is scheduled to auction £725m of index-linked bonds.

• The US calendar is busy, with a full slate of economic data releases. Fed Chairman Bernanke's testimony on the economic outlook to the House Budget Committee on Thursday will also be examined extremely closely. Last week, Bernanke's dovish comments appeared to give the green light to expectations of a half-point interest rate cut at the next FOMC meeting on January 29-30, with a high risk of an inter-meeting rate cut. Ahead of the testimony, markets will digest PPI and CPI inflation figures, as well as retail sales, industrial production, capital flows (TIC) data and the Beige Book. The Fed will also offer a third injection of term funds through the Term Auction Facility. We expect core CPI to rise 0.3% in December, which will bring up the year-on-year rate to 2.5% from 2.3%, the highest since March 2007. Industrial production is forecast to rise 0.1% in December, though markets will also focus on forward-looking business surveys in the form of the Empire and Philly Fed surveys. Despite weak December labour market statistics, retail sales are expected to post a small monthly rise. It would appear that US consumption is holding up, though the University of Michigan consumer sentiment indicator, due on Friday, has fallen in the past year, which may presage softer consumption in 2008, see right chart.

• In the euro zone, the German ZEW survey, released on Tuesday, is expected to fall to -39 in January from -37.2, highlighting a further fall in investor confidence. However, the ZEW current situation index remains near cyclical highs and investors may be excessively downbeat about prospects. Germany will release its first estimate of 2007 GDP, which is expected to be 2.5%. Final December euro zone CPI is expected to confirm the flash estimate of 3.1%, well above the ECB's target. On Thursday, the ECB will publish its monthly bulletin.

Economic Research,

Lloyds TSB Corporate

Markets,

10 Gresham Street,

London EC2V 7AE,

Switchboard:

0207 626 - 1500

www.lloydstsb.com/corporatemarkets

Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.

 

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 11 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
  • POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI

  • POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
  • POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
  • POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
  • POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision


  • POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
  • POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
John M. Bland, MBA
co-founding Partner, Global-View.com EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105