User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday December 15, 2004 - 14:52:47 GMT
INVESTICA Ltd - www.investica.co.uk

Share This Story:
| | Email

US recession in 2005?

US Recession in 2005?

The US economy will have to adjust during 2005 as market tolerance of widening deficits has been exhausted. A combination of strong productivity growth, gradual dollar depreciation and global growth would allow the US to adjust with a period of slower growth rather than recession. The US economy is, however, not in a good position to manage external shocks, particularly with fiscal policy already stretched, and the markets may not have sufficient patience. The risks of a more rapid and forced adjustment, higher interest rates and recession during 2005 have, therefore, increased to around 30%.

US trends unsustainable

The recent economic data from the US has remained generally encouraging despite a disappointing November employment report. There has been a steady increase in consumer spending and employment with GDP growth comfortable at an annual rate of around 3.5%.

The risk of recession triggered by a substantial increase in interest rates in response to an overheated economy looks to be low. The much bigger danger to the economy comes from the underlying imbalances in the economy and by the fact that there has been no real progress in correcting these imbalances since the 2001 recession.
Overall, the US external position is no longer sustainable and there will have to be a reduction in the current account deficit. There will need to be a slowdown in spending growth with growth supported through business investment and exports. The question is whether the markets will allow this to take place gradually or whether there will be a more forced and rapid adjustment.

Debt increases risk

The level of US domestic debt will remain an important background consideration. Figures for the third quarter of 2004 recorded that personal debt had risen to 116% of disposable income. This remains a very high level in historic terms and there will be concerns over a rapid adjustment in personal balance sheets. The immediate risks have been reduced by the high level of property prices and debt is only just over 20% of household net worth. The figure will, however, become a lot more alarming if there is a significant drop in housing prices. The overall savings rate will need to increase and the high debt level increases the risk that spending growth will need to slow sharply.

There is scope for an increase in business investment, but corporate free cash flow is unlikely to be strong enough to allow a major boost.

Interest rates under scrutiny

The Federal Reserve is likely to continue the policy of gradual monetary tightening and the Fed funds rate is likely to be increased again in the first quarter of 2005 to 2.5%. There is a risk that inflation will rise more sharply than expected, especially as productivity growth has slowed and non-wage costs have been rising sharply. There is, therefore, a risk that the Fed will be forced to tighten more aggressively than expected to head off inflationary pressure, although the risk is still low.
Long-term bond yields will also be very important, especially given their pivotal influence on the housing sector. There will be concerns that any withdrawal of funds from the bond market by overseas investors will force Treasury yields up sharply. Such an increase would cause serious damage to the housing sector and would also be likely to weaken the economy sharply.

The weaker US currency should help support the export sector, but demand in Europe and Japan is unlikely to be strong enough to spur rapid US export growth.

Fiscal policy overstretched

The US administration has already expanded fiscal policy to counter an economic slowdown. With the budget deficit liable to remain over US$420bn and 3.5% of GDP this year, there is no real scope for a further relaxation of fiscal policy. If the administration does seek to boost the economy through further tax cuts or an increase in spending, there would be a high risk that long-term interest rates would increase and more than offset the stimulus. There is also the increased risk that private-sector borrowing will be crowded out.

External risks

There will be scope for overseas growth to make a positive contribution, but there will still be doubts that Euro-zone demand in particular will be strong enough to provide major support to US exports. Weak demand in Asia and Europe would increase the risk that the US will be forced into recession.

The US economy will be more vulnerable to external shocks. The US economy is like a patient with a weakened immune system as the build up in debt has reduced the ability to withstand external difficulties. Energy prices will be an important focus, although the risks have been lessened by the decline prices back towards the US$ 40 p/b level. There is a higher probability that oil prices will act as a drag on the economy, possibly cutting growth by around 0.5%, rather than causing more substantial damage.

 

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 18 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Wed 18 Oct
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales

Forex Trading Outlook


Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.

  • POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.



  • POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.

  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.



  • POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.


  • POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.



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