ACI Macedonia

 

Economic indicators are statistical macroeconomic variables which assist in analyzing the phase in which the business cycle is. Agreed with the time when they take place, they give indication in which direction the entire economy is moving to. Due to the time specific features of the economic indicators, these can be leading, contemporary with the changes, or delayed. Leading indicators are the ones which change before the macroeconomic changes take place. Those are one of the most important indicators which assist the analysts and investors in their projections for the economy in future. Therefore precisely, the focus on this article is on those indicators.

During 2019 increased interest for discussion and analysis of the change in the business cycle emerged on world level. Economists are giving their opinions and projections throughout various media in view of the next recession. Should we expect it in the next quarters or has it already begun? There from, leading indicators are those which should give clear picture on the present situation in the world economy, and is it facing the expected recession. Leading indicators are numerous and they differ in different regions around the world, but still, some indicators are consistent everywhere. In continuation, considered are the stock market indices, range of interest rates and composite leading indicators as one of the most important.

Stock Market Indices

Monitoring the stock market share indices as are S&P500 (USA) and Euro Stoxx 50 (Europe) is important part in projecting the changes in the business cycle. This indicator is not the most important one, but is an indicator to be analyzed first by the investors, analysts and media. Share prices result largely from the expectations by the investors for the future, i.e. earned profit for the companies. If the assessment for the profit of the companies is correct, the indices may be good indicator for the direction of movement of the business cycle. Due to that, the indices value is the highest before the economy reaches its peak. Starting from 2009 up until today, the index S&P500 is permanently growing. In July this year it reached its peak of 3.083,82 USD. It can be easily considered through this index that the shares are with growing tendency. Until investors are satisfied with the profit from the companies, the index will be in upward line, and it is indicating that the business cycle is not yet on its peak. Still, monitoring of this indicator as a leading one has its failures. At the so called “bull” mood of the market, it is very difficult to predict the exact moment where the economy shall have its peak in the cycle.  Continue reading “At the edge of recession? What are the leading indicators saying for the business cycle- magazine Economy and Business”

 

Since November 2017 in ACI FMA, and with a role to develop the Association’s education tools for market participants, Rui has global responsibility for two core areas: certification of financial market professionals and their training for ethical conduct and good market practices. Working in financial markets since 1989, Rui is a former FX trader, structurer and head of sales, covering a wide range of assets and a diversified number of customers in various geographies such as Eastern Europe, Iberia and Australia. In the initial 25 years, Rui worked for large banks in London, Madrid and Lisbon. In early 2014 and before joining ACI FMA, Rui became a senior trainer in financial markets’ topics, having delivered MiFID II training for over 20.000 professionals in Iberia.

Mr. Correia, at the invitation of the President of ACI Macedonia, Bojan Cvetanovski, delivered a lecture on “FX Global Code: In The Right Path” at the hotel Marriott, which is pretty new and current topic in international markets.

Mr. Correia also gave an interview for our media sponsor Denar.mk.

Can you please tell is more about ACI FMA foundation and its mission?

ACI Financial Markets Association (ACI FMA) is the leading global trade association representing the interests of the professional financial markets’ community. With establishment in 1955, ACI FMA’s mission contributes to the market development through professional standards of education, networking events and good market practices, so ACI FMA supports market participants on their adherence to principles of ethical conduct.

How is organized collaboration between ACI FMA country associations?

ACI FMA has its Head-Office in Paris and over 8.000 members distributed in 60 National Associations, with each of these National Associations being represented in the Council as a global governing body that oversees all activity. ACI FMA’s Management Board follows an established set of statutes for guidance and takes several important decisions, as suggested by the President Delegate, who acts in an executive capacity.

Continue reading “Interview with Rui Correia, director and president of ACI FMA Board of Education”

 

After the announcement for introducing the customs on the imports of the Chinese goods from the USA in amount of После најавата за воведување царини на увозот на кинески добра од страна на САД во вредност од 300 billion dollars, of whom some parts came into power, and some are delayed for December, China also announced introducing of customs for 75 billion dollars worth imports of USA goods. The conflict that began with seemingly rational purposes has threatened to grown in the open currency war. Expression,, currency war,, describes measures taken from two or more states, that aim to adjust the value of the own currency according to its own economic policy, most often depreciating the same one in aim to incite the export. Last global series of cascading devaluation dates from the 30s years of the previous century in parallel with the great depression.
Although the last years interventions of the Peoples Bank of China (PBC) actually were directed toward strengthening of the renminbi, this time PBC was abstained from purchasing of amounts of domestic currencies, allowing renminbi to fall below the psychological boundaries of 7:1 in relation to the dollar, as answer of the market pressure and expectations for the downgraded export. Trump as answer of the new created competitive advantage of the Chinese exporters, made a pressure for more creative cutting of the interest rates under presumption that such step will cause downward pressure over dollar. There is a huge possibility that FED, independently from Trump pressure, will take the same measure as answer of the slow downing of the American economy growth that in great measure is result of the trade war. But it will be gradual process and there are little possibilities that it will correct the trade in balances between both sides. In the meantime besides the last cutting of the FED rate, the dollar has strengthened as result of speeder growth of the USA economy in comparison to the other developed countries.
There are small possibilities that USA will take collaboration from the mutual partners for mutual intervention over the global foreign exchange market, very similar as in the years 1985, 2000 and 201, but this time in action to move the value of the renminbi upward and the value of the dollar downward, in circumstances when the relations between USA and its traditional alliances are disturbed as result of ignoring the WTO rules by the Washington.
At the same time, USA didn’t deviate from the threatening for imposing the taxes of the goods produced in EU and Japan that will cause returning with the same measure. USA, alone could try to make impact over the value of the dollar through selling dollars and through buying instruments in the foreign currencies.

Continue reading “Currency war between USA and China – potential risks and consequences- magazine Economy and Business”

 

Decisions made by the Central Banks from the globe largest countries (that have large effect over the all global economy) and that are in relation of setting the height on the basic interest rates creates significant impact primarily on the prices of the governmental securities and consequently over the prices on the most traded world currencies.
Managing the basic interest rates represents one of the most significant instruments of the monetary policies established by the global Central Banks. Central Banks through the process of sublimating the analyzed data for financial and macroeconomic flows, above all at the local markets and putting them in correlation with the strategic aims make decisions that determine the height of the basic interest rate on the regular basis and by the strictly predefined calendar. In the focus of the world developed economies and particularly in the frame of the developing economies, besides the domestic central banks, always with great attention are followed the decisions made by the American FED and European Central Bank ECB.
Last declining of the federal funds interest rate from the previous month for 25 basis points (first, after 2008) at some point was expected, having on mind previously announcements from the FED by itself but also from the pressure that president Trump perpetually perform over Federal Reserves.
Namely, the White House for a long time is leading a campaign for weakening of the American dollar in the light of the current global economic movements and trade war between USA and China. The president Trump in his last statements has commented that lowering of the interest rate of the federal funds is insufficiency and that FED should consider into the direction of providing the assistance to the American businesses. ,, In this moment FED has holding us with hands tied” – has commented the president Trump and stressed out that FED should take under consideration to decrease the interest rate for whole percentage point.

Continue reading “FED and ECB impact over the fx rate movement- magazine Economy and Business”