Global economy unsettled by trade policy turbulence - NAB

In view of the analysts at National Australia Bank, the global outlook has deteriorated.

Key Quotes

“Financial markets hit a pothole in May following an escalation of the US-China trade dispute and the short-lived US threat to raise tariffs on imports from Mexico, although more dovish expectations around central bank policy have helped support share markets.”

“NAB has revised down its forecast for the US Fed funds rate; we now expect it will be 50bps lower by the end of 2019 (previously we had expected no change) although the risk is that there will be more cuts rather than fewer.”

“The latest data confirm that major AE growth strengthened in Q1. However, this is unlikely to be sustained and we expect growth to ease over the rest of the year. This is mainly due to a fading impact from last year’s US fiscal stimulus, the impact of trade tensions, ongoing Brexit uncertainty and the planned increase in Japan’s Value Added Tax later in the year.”

“Emerging market (EM) economies are more trade exposed than the AEs and therefore the increase in trade tensions between the United States and China are a negative.”

“We have again lowered our global growth forecasts – to 3.2% in 2019 (from 3.3%) and to 3.3% in 2020 (from 3.4%) – due to an expectation that last month’s trade policy events will negatively affect business sentiment and investment for an extended period of time.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: traders set to position ahead of Fed

The EUR/USD pair moderated its advance on Friday, compliments to stronger-than-expected US data, finishing the week anyway with gains around 1.1070. Better-than-expected US data released Friday brought relief to USD bulls.


GBP/USD: Brexit optimism keeps bulls in the drivers’ seat

The GBP/USD pair has advanced for a second consecutive week, reaching Friday 1.2505, its highest since last July, and settling not far below this last. Fading odds for a hard-Brexit continue to underpin the Pound.


USD/JPY: further gains depending on risk-related sentiment

The USD/JPY pair settled above the 108.00 level for the first time since late July, closing substantially higher for a third consecutive week.  Demand for the safe-haven yen continued to be undermined.


Gold: Down for third straight week, on the defensive ahead of the Fed

Gold is set to end lower for the third straight week and will likely remain on the defensive in the run-up to Wednesday's Federal Open Market Committee (FOMC) meeting. A dovish surprise will likely put a strong bid under the yellow metal.

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more