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
Bearish
GBP/USD
Mixed
USD/JPY
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
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • RT @globaltimesnews: A total of 1,052 cases of #coronavirus have been reported as of Jan 25 in #Hubei Province, with 129 in critical condit…
  • RT @FactSet: $SPX is reporting revenue growth of 2.9% for Q4, led by the Health Care (11%), Utilities (9%), and Communication Services (9%)…
  • The AUD has been hit by the risk-appetite pullback occasioned by the spread of Wuhan-strain coronavirus. This week may see domestic focus return, if headlines allow, with key inflation data due. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/UIpwno0pSq https://t.co/kib4d1mA0q
  • RT @anilvohra69: USD inverted (red) is correlated to Excess Reserves (blue) and Reserve Balances (green). 1/2 https://t.co/bbO1pPWY4F
  • RT @FactSet: $SPX is reporting a decline in earnings of -1.9% for Q4, led by the Energy (-42%), Consumer Discretionary (-14%), and Material…
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/6iMyDFqnqe
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
  • Thanks for having me on @MartinSEssex https://t.co/fg8uOe16wr
  • The MACD is often used with its default setting when entering trades. However, this versatile indicator can be customized to assist traders in exiting trades too. Learn how to better incorporate the MACD into your trading strategy here: https://t.co/HnY7gzsI2q https://t.co/5F1DSvAXyy
WTO Slashes Global GDP Growth Estimates, Risk Assets Unfazed

WTO Slashes Global GDP Growth Estimates, Risk Assets Unfazed

2019-04-03 22:34:00
Rich Dvorak, Junior Analyst
Share:

LATEST WTO ECONOMIC GROWTH OUTLOOK – TALKING POINTS

  • The World Trade Organization lowered its estimate for 2019 merchandise trade volume by a staggering 1.1 percent in the latest downward revision to global growth estimates
  • The report stated that “world trade will continue to face strong headwinds” this year and next, adding how it is “increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade
  • Looking for a comprehensive outlook on the global equity markets? Download the DailyFX Q2 Equity Forecast for free
  • New to forex trading? No problem – this free educational guide on Forex for Beginners has you covered

The WTO announced its latest global trade statistics and outlook yesterday which painted a melancholic picture of global growth in 2019. In its press release, the WTO published a stunning downward revision of GDP growth this year, cutting its forecast to 2.6 percent from its previous estimate of 3.7 percent. The report highlighted escalating trade tensions, waning fiscal and monetary stimulus in North America and Europe, in addition to structural changes to the Chinese economy as primary factors leading to the WTO’s lower GDP projections.

WTO WORLD MERCHANDISE EXPORTS AND IMPORTS VOLUME INDEX: QUARTERLY TIME FRAME (JANUARY 2012 TO DECEMBER 2018)

World Trade Organization Global Export and Import Volume Price Chart

Source: World Trade Organization

The WTO report labeled the economic slowdown in Europe and Asia as the main culprits to the downturn in trade considering the significant weight the two regions have as a proportion of the global economy. As such, dismal PMI data released out of the Eurozone recently could have contributed to the WTO’s downward revision to global outlook.

The global deceleration now appears to be spilling over into the US. The ISM Non-Manufacturing/Services PMI just touched its lowest level since August 2017 with the data print also coming in below Bloomberg’s median consensus. Plummeting sovereign yields can be viewed as another sign that the world economy is slowing, especially when considering the latest US Treasury yield curve inversion.

Despite economic data and numerous GDP estimates progressively pointing to slower and slower global growth, risk assets like stocks appear completely unfazed by deteriorating fundamentals. In fact, the MSCI World Equity Index has gained over 13 percent so far this year and is roughly 300 basis points away from its all-time high.

MSCI WORLD EQUITY INDEX PRICE CHART: 30-MINUTE TIME FRAME (MARCH 03, 2019 TO APRIL 03, 2019)

MSCI World Equity Index Global Stock Market Price Chart

The surge higher in global stocks has been primarily driven by the dovish pivot in central bank policy from the Fed and ECB along with monetary stimulus from the BOJ and PBOC. Most recently, the ECB announced another round of TLTROs while the Fed cut its projection for future rate hikes in addition to stating the end of its balance sheet normalization.

As such, the MSCI World Equity Index was largely unchanged by the WTO’s press release announcing its downward revision to world trade forecasts. Although central banks around the globe will likely keep responding to economic weakness with dovish monetary policies that ease financial conditions, there may soon come a tipping point where gloomy fundamentals overwhelm investor sentiment and consequently push risk assets lower.

TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter

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

DISCLOSURES

News & Analysis at your fingertips.