Dates and Locations

01-02 Dec	London, UK	London Chamber of Commerce >>

Please visit our Course Diary to see dates and locations for all of our UK and European courses.

Course Outline:

This two day course will examine all aspects of international macro economics as it relates to the global financial markets. By examining how economic fundamentals impact on financial assets such as equities, bonds and currencies, delegates will gain a better understanding of how to interpret economic news and anticipate market reaction.

Day 1 - Growth, Inflation and the Balance of Payments
Economic Growth
Different sectors of the economy - households, businesses, government, rest of world
Definition of GDP - the total value of goods and services produced by the economy
Determinants of economic growth - capital and labour productivity
Structure of developed versus developing economies and the impact of globalisation
Characteristics of economic and business cycles
What causes a recession?

Inflation
Definition of inflation and the problems of measurement
Goods versus services - quality of goods and hedonic pricing
Should we worry about the difference between 'headline' and 'core' inflation?
The connection between money supply and inflation
Phillips Curve - wage inflation versus unemployment
Expectations and the 'natural rate' of unemployment
Inflation and the 'output gap' - excess demand
Is the long period of global disinflation over?

Foreign Exchange Economics and the Balance of Payments
Components of the current and capital accounts
Portfolio flows, 'hot money' and FDI
Role of foreign exchange reserves
Brief history of foreign exchange regimes: fixed versus floating
Central bank intervention: sterilised and un-sterilised intervention
Current trends in the global balance of payments and a brief history of BoP crises
Models of the exchange rate: factors affecting the demand/supply of FX
Does the US current account deficit matter and is the US Dollar now undervalued?

Day 2
Monetary Policy
Definitions of the money supply
Is there a stable relationship between money and economic activity?
Brief history of monetary policy in the major economies
Targets and instruments of monetary policy
Application of the Taylor Rule and the current regime of inflation targeting
Communication strategy and the role of expectations
Is the ECB less transparent than the other major central banks?

Fiscal Policy
Provision of public goods: the case for government spending Financing public expenditure: tax and borrowing Do budget deficits 'crowd out' private investment? Budget deficits and the sustainability of debt Fiscal policy and the bond markets Current assessment of sovereign debt risk Are public finances unsustainable in Europe?

Economic Indicators and the Markets
The economic calendar in the US
Definition and measurement of key economic indicators
Which economic indicators move markets?
Consensus expectations and the impact of 'surprises'
The economic calendar in Europe
Why does US news move global markets?
Why does European news have less impact on global markets?
Leading indicators of economic activity

The Role of Housing in the Economic Cycle and Current Issues
Housing and the wealth effect on consumption
House prices: which countries are most vulnerable to a downturn?
The US sub-prime crisis and contagion to structured credit
Are credit derivatives "financial weapons of mass destruction"?
History of oil prices and the economic cycle
Why is the oil price so high? Who are the winners and losers?
Outlook for the global economy