We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • While Sino-US trade jitters are temporarily abating, China-Swedish trade tensions are rising as a part of a political contagion of growing economic hostilities between nations across the world. Get your market update from @ZabelinDimitri here:https://t.co/F1fVoyzoz5 https://t.co/9yE6F4tE7q
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Germany 30: 4.47% US 500: 4.08% Wall Street: 4.03% France 40: 3.74% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/RtMFoHljMR
  • Aston Martin (AML) share price in pieces...down 4% at 75p. Down over 95% since floating (October 2018). #astonmartin #aml #trading Prices and chart via @IGcom https://t.co/M0kVzTvKZH
  • Tune in to @nickcawley1 's #webinar at 6:30 AM ET/10:30 AM GMT to prepare for key UK events and markets in the week ahead. Register here: https://t.co/xewSeUoDaT https://t.co/u4cffZFfrY
  • 🇬🇧 GBP Markit/CIPS UK Construction PMI (MAR), Actual: 39.3 Expected: 44.0 Previous: 52.6 https://www.dailyfx.com/economic-calendar#2020-04-06
  • Heads Up:🇬🇧 GBP Markit/CIPS UK Construction PMI (MAR) due at 08:30 GMT (15min), Actual: N/A Expected: 44.0 Previous: 52.6 https://www.dailyfx.com/economic-calendar#2020-04-06
  • Análisis $AUDUSD: aumenta la demanda de AUD ante la disipación de la aversión al riesgo, rechazo en 0.6050 #aud #usd #trading #Covid_19 https://t.co/lRBeOuA5F8
  • RT @elonmusk: Logarithm graphs coming soon https://t.co/Fc81TDSQgc
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.45%, while traders in US 500 are at opposite extremes with 68.67%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/PtZHbbcWSX
  • Hey, traders 👋 do you want live AMAS with our analysts, market updates and tools to improve your trading strategy? Join us now on Instagram! 👉 https://t.co/pHGzVMqsC4 https://t.co/jd1Mx0kNx3
World Bank, OECD Express Pessimism on Global Growth Forecasts

World Bank, OECD Express Pessimism on Global Growth Forecasts

2016-06-08 02:53:00
Daniel Dubrovsky, Analyst
Share:

Talking Points

  • World Bank and OECD release their global growth projections
  • Both organizations express pessimism about economic forecasts
  • Both point out the diminishing returns of monetary policy stimulus

The World Bank and the Organization for Economic Cooperation and Development (OECD) released updated global growth surveys. Both institutions appeared to express concerns about gross output being either slower than previously estimated, or subdued.

Since the November outlook, the OECD lowered global growth estimates by roughly 0.3 percent for both 2016 and 2017. The decline in output follows a familiar path that has been repeated over the past 8 years as global growth “languished”. The global think tank pointed to a self-fulfilling low-growth trap as the cause of such disappointments.

This trap is a result of businesses having little reason to invest domestically and internationally due to insufficient demand, prolonged uncertainties, and a slowed pace of structural reform. The OECD points out that monetary policy has been the main tool used alone for too long in combating economic shortfalls. The group believes that there needs to be more use of fiscal policy to compliment central bank stimulus.

Additional comments from the OECD:

  • US Real GDP forecast is 1.8% y/y in 2016, 2.2% y/y in 2017
  • US CPI forecast is 1.1% y/y in 2016, 2.0% y/y in 2017
  • Eurozone GDP forecast is 1.6% in 2016, 1.7% in 2017
  • Eurozone Core CPI forecast is 0.9% y/y in 2016, 1.1% y/y in 2017
  • UK 2016 growth cut to 1.7% from 2.1% due to the uncertainty from the June 23rd referendum

Meanwhile, the World Bank cut its 2016 global growth forecast to 2.4 percent from 2.9 percent estimated in January. This adjustment was largely a result of sluggish growth in advanced economies, low commodity prices, weak global trade, and diminishing capital flows. According to the institution, the downside risks to forecasts have become more pronounced.

Like the OECD, the World Bank also cited concerns about the effectiveness of monetary policy stimulus in advanced economies. The institution said that the tools utilized by central banks for accommodation may over time have diminishing returns. The World Bank added that the use of expansionary fiscal policy could provide more support to activity in a number of advanced economies.

Additional comments from the World Bank:

  • Cuts 2017 global growth forecast to 2.8% from 3.1%
  • Cuts 2016 U.S. growth forecast to 1.9% from 2.7%
  • Cuts 2016 Euro-Area growth forecast to 1.6% from 1.7%
  • Maintains 2016 Chinese growth forecast of 6.7%
  • U.K. referendum on EU membership accompanied by softening activity in the U.K.

The chart below shows the report by the OECD on budget deficit as a percentage of nominal GDP for the United States, United Kingdom, and the Eurozone. Since 2009, the size of government deficits have diminished implying reduced fiscal measures while monetary policy has remained more or less the same.

World Bank, OECD Express Pessimism on Global Growth Forecasts

Data extracted from Bloomberg

Keep an eye on short-term trends for the majors using the Grid Sight Index (GSI) here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.