News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
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
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
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
USD/JPY
Bullish
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
More View more
Real Time News
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/PHK2sqB1jV
  • Top event risk for more than just the Dow and Dollar this week is the Wednesday #FOMC rate decision. What the markets expect sets the tone for how the event impacts price action. My run down of the week and Fed decision: https://www.dailyfx.com/forex/video/daily_news_report/2021/06/12/Dollar-and-SP-500-Breaks-Must-Abide-the-FOMC-Decision-This-Week.html https://t.co/Huvth4f706
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/AkE7bFRWAt
  • $GBPUSD continues to trade in ranges as volatility dwindles. UK data to play second fiddle to FOMC. Get your market update from @JMcQueenFX here: https://t.co/T0Eg4KaENB https://t.co/GMmZa5L0Il
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/wlGgQrcK3X
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/qnQ8Cx0DKv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/RJLpBgS43V
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/6GrWzkOouM
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/lIUxpfSem3
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/8kBulRFd6l
IMF Warns of Rising Instability in the Global Financial System

IMF Warns of Rising Instability in the Global Financial System

Peter Hanks, Strategist

Talking Points:

  • The IMF also released their World Economic Outlook report, with signs that growth is slowing
  • Trade tensions, pressures in emerging markets, and rising interest rates were some of the highlighted risks to global stability
  • The report comes amid plummeting US equities and a risk-off attitude in markets

The International Monetary Fund and the World Trade Organization met in Bali, Indonesia this week to discuss the global economy. At the event, the IMF released their World Economic Stability report and the Global Financial Stability Report. In the biennial GFSR, IMF officials highlighted areas of increased risk in the global economy. Highlighted areas include trade wars, emerging market pressure, rising interest rates, and contagion.

Read about the ongoing economic conflicts with A Brief History of Trade Wars.

Trade wars were the most notable risk added to the report, due to their relatively recent developments. IMF officials expressed concern for headwinds to growth and stability because of the impacts on trade from tariffs. The headwinds include increased cost and rising geopolitical tensions. While geopolitical tensions are certainly high amongst the world’s largest economies, rising costs are proving more inhibitive to emerging markets.

MSCI EEM Emerging Markets Price Chart Daily, Year-to-Date

IMF Warns of Rising Instability in the Global Financial System

Thus, emerging market weakness was another major area of concern in the report. Officials asserted emerging markets were disproportionately vulnerable to trade wars and other factors highlighted in the report. Coupled with rising interest rates and a strong US Dollar, emerging markets are indeed in troubled waters. Many indebted emerging markets possess large portions of that debt in foreign denominations, particularly US Dollars. These balances will be arduous to pay off as borrowing becomes more expensive and their respective currencies face a strong USD.

Witnessed briefly in August when the Turkish Lira dropped in value, the IMF found contagion is also a potential flashpoint for global instability. Although many developed economies maintain moderate growth, their outstanding loans to emerging markets make them more vulnerable if emerging markets as a whole should falter.

See how our clients are positioned on different assets and currency pairs with IG Client Sentiment.

S&P 500 Price Chart Hourly, October

IMF Warns of Rising Instability in the Global Financial System

Coincidentally, the stability report was released as US equities face steep declines. As the recent leader in global returns, the S&P 500 has finally come under pressure as rising interest rates spook investors. With the volatility index at 6-month highs, blue-chip and growth stocks alike are falling precipitously. With that in mind, such an ominous report from the IMF is unlikely to spur a risk-on attitude.

Despite a tumultuous climate in the markets today and on the horizon, the IMF also outlined some positives enjoyed by the global economies. Following the 10-year anniversary of the collapse of Lehman Brothers, IMF officials cited more resilient, liquid, and more intensively supervised markets as areas for optimism. Especially in the financial intermediary industry, many past risks have been curtailed found the inter-governmental body. Still, some areas need to be closely reviewed the body warned.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Other Top Stories:

US Dollar Snaps Both Haven & Yield Bid. Slides with Bonds & Stocks – By Christopher Vecchio, Senior Currency Strategist

Bitcoin, Ethereum, Ripple: Beware of Tight Ranges | Webinar – By Nick Cawley, Analyst

EUR/JPY Weekly Technical Outlook– Price Reversal Eyes Initial Support – By Michael Boutros, Currency Strategist

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

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

DISCLOSURES