Global Economic Prospects 2015

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March 2015

Global Daily: U.S. initial jobless claims slid to five-week low

Global Macroeconomics Team's picture
Financial Markets

Oil prices rallied on Thursday after Saudi Arabia and its allies started air strikes in Yemen, boosting demand for safe-haven assets from gold to Japanese yen. Brent crude surged more than $3 to close to $60 a barrel, and the price of U.S. crude saw a similar surge as it topped $51 a barrel. In the currency market, the dollar weakened against traditional safe-haven currencies such as the Swiss franc and the yen. Meanwhile, gold prices climbed 0.6% to pace gains among metals.

Global Daily: U.S. consumer prices rise more than expected.

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Financial Markets

U.S. Treasuries advanced for a third day on Tuesday as U.S. inflation in February remained below the Federal Reserve’s 2% target, increasing bet the U.S. central bank won’t rush to hike interest rates. The yield on the benchmark 10-year note fell to as low as 1.894%, while the 30-year yield dropped to a six-week low of 2.49%. U.S. government bond have rallied since the Fed indicated last week it would raise policy rate at a slower pace than what the market anticipated.

Macroeconomic implications of the recent oil price decline

Raju Huidrom's picture
Following four years of relative stability at around $105 per barrel (bbl), oil prices have declined sharply since June 2014. It is not the first sharp oil price swing: there have been five other episodes of oil price drops in excess of 30 percent and several more episodes of oil price spikes. Over the past five decades, these steep drops and spikes have stimulated an extensive literature on the macroeconomic implications of oil price swings and the channels through which they operate.

What can history tell us about cartels in commodity markets?

John Baffes's picture
Recent developments in oil markets have led to intensive debates about OPEC’s viability and its role in the global crude oil market. OPEC, which was founded in 1960 to “coordinate and unify petroleum policies among member states”, currently accounts for about 40 percent of global crude oil production. At present, the organization has 12 active member countries: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, and Angola.

Can Remittances Help Promote Consumption Stability?

Remittance inflows to developing countries constitute a resilient source of foreign finance. They contribute to consumption stability and can act as a counter-balance when capital flows weaken.
Remittances have numerous benefits for development. They have been associated with accelerated poverty alleviation, improved access to education and health services, and greater financial development. In addition, remittances may enable consumers to maintain their consumption levels despite illness or some other calamity, which may be critical at very low levels of income.

Global Daily: Euro slides to 12-year low on record low borrowing costs

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Financial Markets

The euro depreciated further against the dollar on Wednesday, slumping as much as 1.5% to a 12-year low of $1.056 before stabilizing slightly, as the ECB’s QE program continued to push the region’s bond yields down to new record lows. The single currency was broadly weaker against other major currencies, sinking to a 7-year low versus sterling at 70.145 and an 18-monh low against the yen at 128.20.

Global Daily: U.S. private sector job growth disappoints

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Financial Markets

The euro fell for a fifth day versus the dollar on Wednesday ahead of the European Central Bank policy meeting tomorrow, which will provide more details on €60 billion a month stimulus plan. The single currency was trading 0.8% lower against the dollar at $1.1086, approaching its 11-year low of $1.1098 last reached on January 26 this year. The euros’ lingering weakness is likely to reflect a growing divergence in growth and monetary policy outlook between Europe and the U.S.

World Bank published latest commodity prices: March 2015

John Baffes's picture
In February 2015, energy prices increased by 11.7%, while the prices of non-energy commodities went down slightly by 1.5%. Food prices were down by 2.3%. Beverages declined by 1.7%. Raw materials increased by 2.0%, and fertilizers dropped by 3.1%. Metals and minerals decreased by 1.9%, and precious metals slipped by 2.1%.
To access recent and long-term historical prices and other commodity-related information, please click here.

Global Daily: Ukraine hikes policy rate to 30%

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Financial Markets

U.S. stocks retreated on Tuesday, with the Dow Jones Industrial Average and S&P 500 index easing back from their record closing highs on Monday, while the dollar weakened against a basket of major counterparts.  European and Asian stocks were mostly weaker as investors were cautious of a potentially overheating market.  The benchmark MSCI World stock index slipped 0.2%.  The dollar index (DXY), which tracks the greenback against a group of six major currencies, fell 0.25% from its 11-year peak to 95.214.