News and analysis

A review in the first quarter of 2017


In the past few years, the global economy slowing, global GDP growth of 3.4% in 2014, fell to 3.2% in 2015, and further slowed to 3.0% last year, the lowest since 2009. In the fourth quarter of last year, however, the global demand picks up, the economy has bottomed out, especially in the wilderness of the industrial activity of the most exciting, for many years, in December, in the global industrial production rose 3% on a yearly basis at the same time, trade has also surprise rebound, overall economic performance is better than expected, into the first quarter of this year, has continued momentum of economic recovery also, in addition, global inflation depressed for many years, in the last year prices stabilized, the rebound in demand, the pressure of deflation finally eased, the us federal reserve to raise interest rates by 0.25% in March, 2015 the interest rates for the third time since the launch cycle.

The United States

2016 growth estimates may be only 1.6%, according to the fed forecasts, or rise to 2.1% this year. The main impetus for economic growth in the first quarter from strong consumption, labor market recovery cheer for consumers, give confidence, since 2015, the unemployment rate has fallen below 5%, over the past six months, the average per month and 200000 new jobs, but wage growth rate is not very strong, help remains to be digesting surplus labor force; However, as the economy continues to grow, the growth rate of wages will always keep up with, eventually will spur inflation was rising. Consumer confidence in the first quarter of the executioner's highest in ten years, retail, auto sales hit a record five years also, of course it is inseparable with the labor market recovery. Service industry continues to recover, even industry because order big rose and red. Trump the government's tax cuts and infrastructure plan in the first quarter is still not, estimate can eventually in years passed, will play a stimulating the economy.

Inflation as the economy gradually recovery, and the more the fed target, to just 1.6% in October last year, had risen to 2.5% in January, February, rose to 2.7%, the highest since March 2012. By 2014, the fed water retreat city, beautiful hui Index CFDs from 80 to the end of last year to 103, the cumulative increase of 25%, the dollar weakened the competitiveness of the export, in the first quarter trade deficit is widening a way also restricts the pace of economic growth. Unusually warm weather in January and refund delay drag on consumer spending to drop, but with the further improvement of employment market, consumer spending will remain strong support in the future economic growth rebound.

In this time of the cycle, raise interest rates for the first time since December 2015, the second time in for several times before end in December of the following word by raising interest rates twice a year apart, before the meeting in March this year, the federal reserve and other officials in public statements to guide the market believe that 3 month to raise interest rates, finally also "go" to raise interest rates as scheduled, but increases the number of times is not changed, still three times, three times next year, that is to say, the next two years rate increase is about 1.5%, the market think the extent of whether to raise interest rates or times are a bit too little, so $not fallen. The author thought that, now that the dollar rally has been all too arbitrary, because no pressure to raise interest rates in other major currencies, spreads the expansion of $or good afternoon.

The European

The eurozone GDP growth estimate of 1.7% last year, higher than that of the United States, thanks to global demand, also have a good momentum of growth in the first quarter of this year. The European central bank (ECB) impose negative interest rates since 2014, in 2015 the implementation of the European version of quantitative easing, the easing of monetary policy for the euro, weaker export smooth add competitiveness in the international market in the district, for the euro zone into the economic rebound momentum, in stimulating economic growth, at the same time from this major goal deflation can be said that almost made it. Unemployment rate is 9.6%, compared with the end of last year, no big change, but the rate of inflation is a significant rise, rise to 1.8% after 1 month, 2 months rose to 2%, the executioner record high since January 2013, although core inflation after the deduction of the energy and food prices are still stubbornly stuck at 0.9%, a few can be sure, the deflationary pressure had subsided.

Now the market began to wonder when the European central bank will raise interest rates. Changing situation, the author thinks that this year's election method of election, in the second quarter, a general election in the third quarter, one thousand selected high rang out of Europe, refuse to accept refugees party came to power, the impact on the euro is unbearable, central Banks had to prepared himself, must maintain loose monetary policy to emergencies.

The British

Although last year's GDP growth fell to 1.8% from 2.2% in 2015, the economic performance is very good. Last year, after a referendum on June 23, the substantial depreciation of sterling help to enhance the competitiveness of the export. When a referendum results, many people are worried about the economic recession, fortunately, this situation did not occur, with loose policy support, economy energy, the unemployment rate fell to 4.7%, the lowest for 42 years, inflation picks up, also after rose to 1.8 in January, February, rush rush again, to 2.3%. However, as the British started to take off the process, economic growth will be affected by business investment to fall and abate, retail sales growth has been signs of a slowdown in the advance wage growth overtake inflation, will eventually lead to the plight of slowing growth. In the face of surging inflation, bank of England suggested that will change the loose policy, but to take off the never had a precedent, the process of negotiating a long and full of variables, the author thinks that conditions haven't raise interest rates in the bank of England this year.


Subject to the problem of aging population, Japan's potential GDP growth of only 0.5%, while real GDP growth rate is 0.5% over the past two years, failed to go beyond that number. Even with strong fiscal policy and loose monetary policy, this year's growth rate is not high, about 0.6%. In the first quarter, rising corporate profits hope to boost wages rise, promote consumption and wages rise, to get rid of the deflationary economic stimulation effect, called on companies raise work has always been the focus of the government in the first quarter, as a matter of fact, negative inflation for six months, last year in October to reply positive, rose to 0.4% in January, was a little relieved, and core inflation to 0.1%, however, only one step away from the deflation, low growth and deflation is still lingering nightmare. The author thinks that this year the boj hardly raise interest rates.


China's GDP growth last year was 6.6%, in line with the expectations of 6.5% to 7%, in the transformation, orderly economic slowdown, services account for 52% of the economy, the proportion of industry has fallen to 40%. Growth rate is 6.5%, this year, in front of the 19 big stability oriented, expected the government to leverage, to inventory under the guidelines of still through modest infrastructure investment to ensure that there are plenty of job opportunities. Pedestrian also through open market operations raise short-term interest rates to deter walk. Credit growth is rapid, but the Chinese private savings rate is still quite high, does not exist the problem of excessive leverage, in the first quarter of the first two months, fixed investment increased 8.9%, 8.3% higher than expected, relaxing controls on the housing market to stimulate individual city real estate demand, industrial production rose 6.3% from a year, generally speaking, in the first situation is good. The yuan against a basket of currencies is still stable, the dollar has cut space. Peaked at 2014 foreign exchange reserves of $four trillion, followed by two years to three trillion, although it was one trillion, but still very good, in February, after the north down the first rebound, expected the central bank has enough ability to continue to moderate intervention and the market through strengthening management to reduce the volatility of financial markets to the impact of the yuan.

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