DAVOS WORLD ECONOMIC FORUM – SUMMARY POINTS
Nervousness over world financial outlook and political instability persist as forefront issues amongst WEF19 attendees
EURUSD, USDJPY and USDCNH foreign money pairs had combined responses because the annual convention progressed
Push for globalism by Angela Merkel, Shinzo Abe and others
Day 2 in Davos was jam-packed with periods on the World Financial Discussion board as authorities leaders and enterprise executives took the stage to voice their ideas on world politics and financial forecasts. Listed here are the important thing takeaways from immediately’s developments:
Did You Miss Davos Day 1? Get Caught Up on WEF19 Key Factors from Yesterday Right here
SLEW OF SPECIAL ADDRESSES
JPY – Japanese Prime Minister Shinzo Abe spoke concerning the significance of free commerce, telling convention attendees “to rebuild belief towards the system for worldwide commerce.” Amid rampant commerce tensions that started plaguing the world final yr, Abe reiterated his stance as an advocate for globalization. The PM boasted the 2 commerce offers his nation brokered final yr whereas additionally calling on the World Commerce Group to reform sure guidelines over mental property and authorities subsidies. Abe’s remarks concluded that the “world financial system is step by step recovering.”
EUR – Germany’s Angela Merkel additionally took her help for globalization to the rostrum. The Federal Chancellor additionally touched on her nation taking a “sturdy step ahead” with France towards establishing a European military. The Prime Minister of Italy, Giuseppe Conte, additionally gave a particular tackle the place he acknowledged that his nation’s beaten-down financial system will start to recuperate within the latter half of 2019. Conte elaborated that Italy would “far exceed the 1 p.c development that we specified by our price range” regardless of widespread skepticism.
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CNH – Vice President of China Wang Qishan got down to ease fearful minds concerning the influence from the commerce struggle between the world’s largest two economies. Qishan acknowledged that “neither facet can do with out the opposite” and that the “Chinese language and US economies are mutually indispensable.” Whereas China simply reported its slowest financial development charge in 28 years, the PM inspired listeners 6.6 p.c development charge in GDP remains to be “a reasonably important quantity.”
EURUSD, USDJPY AND USDCNH CURRENCY PRICE CHART: 5-MINUTE TIME FRAME (JANUARY 23, 2019 INTRADAY)
THE GLOBAL DEBT TSUNAMI
With the whole world company debt load now exceeding $29 trillion, leverage and credit score danger throughout companies is changing into one of many greatest threats to monetary stability. The company credit score panorama has became a “ticking time bomb” as over 25 p.c of excellent loans are attributable to mature by 2025. Panelists mentioned the significance of fiscal duty and the way slowing financial development can adversely influence this looming danger.
WORLD POLITICAL AND ECONOMIC OUTLOOK
The slowdown of the worldwide financial system stays entrance and middle as probably the most talked about matter on the 2019 World Financial Discussion board in Davos. A number of panelists mentioned the spillover impact that the US-China commerce struggle has had on world development whereas advocating for globalism and free commerce. Classes additionally spoke concerning the challenges that emerging markets faceconcerning employment because the world transfers away from agriculture and bodily labor in direction of providers and automation. Moreover, the dangers that Brexit, a US authorities shutdown and different main market threats pose to the world have been additionally touched on. Regardless of the bumpy street it appears we’re venturing down, world leaders stay optimistic concerning the second half of 2019 as these dangers dissipate.
Written by Wealthy Dvorak, Junior Analyst for DailyFX
Comply with on Twitter @RichDvorakFX