The final
quarter of 2018 will be remembered as a dramatic one for financial markets.
Don’t expect this trend to change in the early period of 2019.
Financial
markets have been severely hit by accelerating signs of an economic slowdown,
trade concerns, geopolitical risks, and the tightening of U.S. monetary policy.
Volatility has returned with steep moves to the downside. Selling the rallies
is now seen as a preferred strategy from investors as opposed to buying the
dips which has been closely followed by traders over the last several years.
Global
synchronized economic growth was the key theme in 2017. Year 2018 saw the divergence between the U.S.
and the rest of the world. In 2019 we are likely to converge again, but this
time in a synchronized global slowdown. Many indicators have indicated a peak
in the U.S. economic cycle, including most recent economic surveys, financial
conditions, housing data, and the inversion of the U.S. Treasury yield curve.
Adding this together with trade tensions, political risk, fading fiscal
stimulus, and a tighter U.S. monetary policy; the economic outlook is expected
to look much more vulnerable in 2019.
It is becoming
evident that the U.S. economy has reached an inflection point. This doesn’t
necessarily mean we are immediately entering a recession but expect much slower
growth than the 4.2% seen in the second quarter of 2018. In such an
environment, investors need to be prepared for a more volatile year as markets
adjust to a new reality of slower economic growth.
In Foreign
Exchange markets, the U.S. Dollar was the second-best performing major currency
in 2018 after the Yen. It rose more than 4% against its major peers and
appreciated significantly against commodity and emerging markets currencies.
However, there is a high probability for the Dollar rally to come to an end in
2019.
There were
numerous factors that supported the Dollar in 2018. Robust economic expansions,
fiscal stimulus, a hawkish Federal Reserve, and fund repatriation by U.S. firms
were key to the Dollar’s strength. Looking into 2019, none of these factors
will remain in play.
Brexit is fast
approaching and will likely make most of the headlines in the first couple of
weeks in 2019. Although Prime Minister Theresa May has finalized the UK
Withdrawal Agreement in November 2018, it’s not a done deal yet. Sterling will
face a tricky situation in the months ahead. While an orderly exit from the EU
will be welcomed by markets and provide a boost to the Pound, a no deal
scenario has multiple outcomes with a varying degree of impact on U.K.
assets. Are we going to see a disorderly
exit from the EU, an extension to the deadline, a general election, or no
Brexit at all? With all these possible scenarios, expect to see large swings in
Sterling until the Brexit clouds clear.
Have you heard this? Many Nigerian exporters have been defrauded of huge amount of money in the process of exporting commodities to foreign countries. Do you know why? They were not trained on export operations, management, documentations and the best methods of payment in export trade. This is terrible!!! Nigerians cannot continue to lose money to foreigners in the course of export business. Exporters, why don’t you get a practical manual that teaches the stages of export trade from processing and packaging of commodities to receipt of payment by the foreign buyers. It teaches export operations, export management, export documentations and methods of payment in export trade? It is a contemporary step-by-step guide to export trade. It tells all the contemporary dynamics in export trade. To get it, click on the link below:
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
No comments:
Post a Comment