OctaFX | OctaFX Forex Broker
Open trading account
Back

Oil drop stirs deflation fears in advanced economies

FXStreet (Mumbai) - The recent slide of more than 25% in Crude prices has triggered fears of deflation in the advanced economies.

In the past, a similar price fall was considered positive across the world. The global dynamics since 2008 recession have shaped up in such a way that the advanced economies are battling the threat of falling inflation at a time when the emerging economies are working hard to control inflationary pressures.

Yesterday, the U.K. reported the slowest inflation in five years while in Sweden prices fell for a second month. The Eurozone is likely to report tomorrow a weakest inflation number since 2009. The European Central Bank (ECB) president Draghi has already blamed the falling energy prices for the slowing inflation in the Eurozone. Bank of America economist Gustavo Reis says, “A persistent decline in energy and agriculture costs would put a significant downward pressure on headline inflation”.

Among the advanced economies, Japan is likely to benefit from a slump in oil prices. As per Bank of Japan Governor Haruhiko Kuroda , “Japan imports massive amounts of oil so falling oil prices is a plus for the economy,”

UK employment data slightly better than expected - ING

James Knightley from ING comments on the UK labor report released on Wednesday and showing a decrease in the unemployment rate from 6.2% to 6%, the lowest since October 2008.
Read more Previous

EUR/USD holding above 1.2600 - Commerzbank

Karen Jones, analyst at Commerzbank points out that EUR/USD is trading above the 1.2600 level, making it sidelined/continuing its correction in the very near term.
Read more Next
Start livechat