Forex Flash: Main risks for the US economy in 2013 – TD Securities (Barcelona) - For the year of 2013, TD Securities analysts are more bullish on growth prospects given their view that underlying fundamentals are much improved, “as evidenced by household balance sheet ratios having reverted back to 2003 levels, and a housing market on the mend”, they said. They also expect reduced uncertainty on the fiscal cliff which should allow more private GDP growth and the Euro crisis to stay beyond the riot point.

In regard to key risks for the US, analysts point to: “Going over the fiscal cliff or a fix that creates a drag north of 1.5% of GDP, something the private economy may struggle to overcome” and “an oil spike from an escalation in tensions with Iran, a hard landing in China, and failure to achieve a solution in Europe remain lingering risks”. Also, if private sector surpluses are not deployed to accommodate fiscal austerity, “a negative feedback loop into jobs, housing, and incomes could take shape which the Fed would find difficult to prevent”, they said.