User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday June 19, 2006 - 10:49:46 GMT
Lloyds TSB Financial Markets -

Share This Story:
| | Email

Economics Weekly: Despite market jitters, the world economy is booming

The world economy is expanding rapidly...
Equity markets are falling, bond yields are rising and commodity prices are down sharply. But despite the many risks that have been dominating the financial markets in recent weeks and causing volatility, we must not lose sight of the fact that the world economy remains very buoyant. This year will see the third consecutive year of nearly 5% growth, with forecasts showing that it continues, see chart a, for another 4 years. What is driving this expansion and what could end it? That is the topic of our briefing this week.

...driven by loose monetary and fiscal policy
Low interest rates, as a result of low inflation, have been one of the main planks of the global upturn since 2002. In real terms, i.e. adjusted for inflation, global interest rates are still very low, as shown in chart b, despite increases in interest rates in a number of large economies. This is clearly behind the pace of growth in the global economy, with plentiful liquidity, as shown in chart e and f on the back page, spurring rising money supply growth and being reflected in increased consumer and government spending, partly fuelled by debt. Indeed, this is a feature of the developed economies’ growth, aside from Japan, with consumer spending in the UK and US bolstering their strong growth. In Germany, France, Spain, and Italy, government spending and exports are playing a big role.

...this has increased total investment flows, boosting emerging market economies
Investment flows into the emerging markets, in particular to China and the central Eastern European countries that joined the EU in 2004 are very strong. This has helped to drive economic growth in these economies, particularly from export oriented expansion. Their fast pace of growth, relative to the advanced economies and the rest of the world, is summarised in chart c. As mentioned above, global economic expansion is set to continue for at least this year and next at about 5% per annum. And chart c illustrates that in every year in the last decade with the exception of 1999, growth in the emerging markets has generally exceeded that of the developed economies. To some extent this is because the developing countries have a lot of scope to catch up. They have abundant and cheap labour so with the application of modern technology, capital and management (productivity, in short), the pace of growth can be fast and yet non inflationary. As their exports are sold onto the global market they help to keep down world price and wage inflation pressure, extending the cycle of low interest rates and so sustainable economic expansion.

At some stage price growth will accelerate, but inflation appears unlikely to spiral...
But of course this cannot persist for ever; at some stage wages will start to rise, perhaps as the most productive labour is utilised as the developing economies themselves grow and that drives up demand and pay for skilled people generally. This is one of the factors that might lead to an end to this global economic upswing. Are we close to that point yet? The truth is nobody really knows, but import prices, ex energy, are beginning to rise in the UK, for example, and turned positive in Q1 2006 for the first time in a decade. This implies that the main deflationary effect of the addition of the emerging markets to the global economy is at an end, but this does not mean we are on the verge of an inflation spiral as prices are still low, as chart d shows. Moreover, the gap between wages in the US, say $20-25 an hour, emerging EU, $5 an hour and China, say $2-3 an hour, is still so large that so long as these countries are in the global market system, world price and wage inflation will be under downward pressure for many more years to come.

This is not to say that there will be no economic cycle - we are looking for global growth in 2007 to slow to 4.7% from 5% this year, but there is unlikely to be a prolonged global downturn due to higher inflation from this source. Moreover, the out performance of the emerging market economies, see chart g, suggests they could become growth engines for the global economy should the developed economies falter.

...however, risks remain and some other event could derail global growth
However, there are other factors that could negatively impact global growth, such as high oil prices, financial crisis as a result of market investors borrowing too much and underestimating the risks from higher interest rates; from too much borrowing to fund investments in property, equity and commodity prices at their peak and from high levels of government debt. Possibly, the biggest risk stems from a correction of the US trade deficit, currently 7% of gdp, which could cause a retrenchment in US consumer spending and a sharp fall in the dollar.

Trevor Williams, Chief Economist
[email protected]
Lloyds TSB Bank,
Financial Markets
Faryners House,
25 Monument,
London EC3R 8BQ
0207 283 - 1000

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 a signatory to the Banking Codes, and represents only the 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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

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