View Single Post
Old 11-29-2017, 05:31 AM
InstaForex Gertrude InstaForex Gertrude is offline
Join Date: Oct 2015
Posts: 51
Stress tests and forecast for world economic growth

The euro continued to decline against the US dollar on Tuesday, November 28, despite good data on lending to private eurozone companies.

According to the report, lending in October rose, indicating the recovery of the eurozone economy.

According to the European Central Bank, lending to private sector non-financial companies in October this year had increased by 2.9% compared to the same period last year. Household lending increased by 2.7% compared to the same period of the previous year. The monetary aggregate M3 in October this year increased by 5%.

Data on the optimism of German consumers slightly supported the euro during the afternoon. According to the report of the German institute GfK, the leading index of consumer sentiment remained unchanged in December compared to November and amounted to 10.7 points. Economists had expected that the index would rise to 10.8 points in December. As stated in the report, the sentiments of German households remain at a high level, as well as expectations about the future.

On Tuesday, the Organization for Economic Cooperation and Development released a report, which raised forecasts for the growth of the world economy for the next year. This happened due to a good rate of growth in the US and the euro area.

According to the data, for this year, forecasts have been raised to 2.2% for the US economy and 2.4% for the euro area economy. In 2018, it is expected that the US economy will grow by 2.5%, and the eurozone - by 2.1%. Without any changes, forecasts for the growth of China's economy remained unchanged, but the data for Canada was revised downwards.

The OECD expects the world economy to grow by 3.6% this year, while in September it was forecasting an increase of 3.5%. In 2018, world growth should be at the level of 3.7%.

The British pound declined after the release of stress tests from the Bank of England.

Stress tests of the Bank of England were conducted at Barclays, HSBC, Lloyds Banking Group, Standard Chartered. It must be noted that back in 2016, Barclays and RBS failed stress tests, but then increased their capital.

The report shows that the Bank of England decided to raise the requirements for the capital buffer to 1% by the end of 2018 from 0.5% at present. This is done primarily in order to protect the banks of the UK from the adverse effects on the part of Brexit. The Bank of England also said that the current scenario of stress tests implies risks that may be associated with Brexit, and therefore the British banking system will continue to support the economy in the event of an unorganized Brexit.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided by InstaForex
Reply With Quote