2014年-世界发展银行全球_Global_Economic_Prospects___Financial_Markets_Outlook_June_2014_22页_1mb

Summary of the Financial Markets Outlook Report (June 2014)

Core Content

The Financial Markets Outlook report for June 2014 provides an analysis of global financial market developments and capital flow prospects for developing countries. It outlines the impact of accommodative monetary policies in high-income countries, the evolution of global financing conditions, and the associated risks and opportunities for developing economies.

Main Messages

• Global financing conditions have eased significantly in the second quarter of 2014, with market volatility reaching historically low levels.
• The "Goldilocks recovery" in the U.S., characterized by modest growth and stable inflation, combined with additional easing by the ECB, has contributed to lower bond yields and increased demand for higher-yielding assets in developing countries.
• Credit default swap (CDS) spreads have fallen in 2014, indicating reduced risk perceptions, although Argentina's CDS spreads rose sharply following a U.S. Supreme Court ruling.
• Real interest rates in the U.S. are on a secular downward trend, while inflation expectations in the Euro Area remain low.
• Net capital flows to developing countries have turned positive since April 2014, with record levels of international bond issuance observed in March and April.
• FDI remains the most important and least volatile source of capital flows for developing countries.
• Despite some improvements, many developing countries still face currency depreciation and external vulnerabilities, with more than 60 percent experiencing currency weakening since 2012.
• Equity markets in developing countries have underperformed since 2013, although there has been a rebound in March-June 2014, with India's Sensex leading the recovery.
• Monetary policy tightening has been concentrated in countries facing currency pressures.
• Credit rating stability has been observed in some developing countries, although there have been downgrades in Latin America, developing Europe, and Sub-Saharan Africa.
• Central banks in developing countries have gained breathing space due to improved global financing conditions.

Recent Developments

• Global market volatility reached historically low levels in June 2014, driven by lower risk aversion and monetary easing in major economies.
• Bond yields in both high-income and developing countries have declined significantly, with the U.S. Treasury yields falling below 3.5 percent for 10 and 30-year maturities.
• The yield curve flattened, suggesting a focus on long-term equilibrium rates rather than near-term rate hikes.
• Developing-country bond spreads narrowed by over 100 basis points, reflecting improved financial market conditions and reduced external vulnerabilities.
• Equity markets in the U.S. and Euro Area have rallied in 2014, while developing-country equity markets have underperformed.
• Net capital flows to developing countries turned positive in April 2014, following a period of significant outflows since May 2013.
• International bond issuance reached record levels in March and April 2014, with investment-grade borrowers dominating the market.

Capital Flow Prospects

• Capital flows are expected to remain broadly stable in 2014 and 2015, at around 5.6 percent of GDP, before declining to 5.1 percent in 2016.
• FDI remains the most important and least volatile source of capital flows.
• Portfolio and other investment flows have increased, especially in Latin America and East Asia.
• Syndicated bank lending has declined due to increased reliance on bond markets by large corporations.
• Developing-country central banks have benefited from eased global financing conditions, but currency depreciation and foreign liabilities pose risks to balance sheets.

Risks and Vulnerabilities

• Many developing countries remain vulnerable to sudden capital outflows and sharp increases in borrowing costs.
• Current account deficits have started to close since mid-2013, but some countries still have large financing needs and low reserve cover.
• Public debt has increased by more than 10 percentage points in over half of developing countries since 2007.
• Private indebtedness remains high or has increased further in several countries.
• Geopolitical tensions and financial stress in certain regions could trigger sudden re-pricing of risk.
• Currency depreciation has increased external price pressures and strained balance sheets, especially in countries with large foreign-denominated liabilities.

Key Figures and Tables

• Figure 1: Market volatility in developing and high-income countries has fallen to historically low levels.
• Figure 2: A benign environment increased the appeal of carry-trade investments.
• Figure 3: Credit default swap spreads have fallen in 2014.
• Figure 4: Real interest rates in the United States are on a secular downward trend.
• Figure 5: Inflation expectations in the Euro Area have stabilized at a low level.
• Figure 6: The TLTRO package will only partially reverse the contraction in the ECB balance sheet since 2012.
• Figure 7: Government bond yields have fallen significantly this year.
• Figure 8: Lower yields in long-dated U.S. Treasuries led to the flattening of the yield curve.
• Figure 9: Developing-country borrowing costs have returned to Spring 2013 levels.
• Figure 10: Credit ratings have stabilized across developing countries.
• Figure 11: U.S. and European equities continued to rally in 2014.
• Figure 12: Developing-country equity markets underperformed since the start of 2013.
• Figure 13: Net inflows to developing country funds turned positive since April.
• Figure 14: Gross capital flows have recovered strongly after February.
• Figure 15: Dynamic bond issuance activity was led by investment grade borrowers.
• Figure 16: Trends in regional capital flows are varied.
• Figure 17: More than 60 percent of developing countries have seen their currency weaken since 2012.
• Figure 18: Countries with the largest currency depreciation since 2012.
• Figure 19: Recent depreciations were more modest among countries that reduced external imbalances.
• Figure 20: Developing-country central banks gain breathing space as global financing conditions ease.
• Figure 21: Monetary policy tightening is concentrated in countries facing currency pressures.
• Figure 22: Real interest rates are still low in many developing countries.
• Figure 23: FDI has remained the most important and least volatile source of capital flows.
• Figure 24: Current account deficits started closing since mid-2013.
• Figure 25: Some developing countries have large financing needs and low reserve cover.
• Figure 26: Public debt rose by more than 10 percentage points since 2007 in more than half of developing countries.
• Figure 27: Foreign ownership of local government bond markets has risen significantly in recent years.
• Figure 28: Private indebtedness remained high or increased further in a number of countries.
• Figure 29: Banks' Tier-1 capital ratios appear adequate in many developing countries.
• Figure 30: Chinese corporate debt has increased sharply since 2007.

Key Boxes

• Box 1: The ECB's new credit easing measures, including the TLTRO, aim to reduce financing costs and improve lending. These measures are expected to have positive spillover effects on developing countries through increased cross-border lending.
• Box 2: The World Bank has revised its net capital flows data and projections, reflecting improved financial market conditions and lower borrowing costs for developing countries.

Conclusion

The report highlights that while global financing conditions have improved significantly, developing countries remain vulnerable to sudden market shifts. The benign environment has supported capital inflows and lowered borrowing costs, but currency depreciation and external imbalances continue to pose challenges. The impact of monetary easing by major central banks has been positive, but uncertainty and geopolitical tensions could still lead to market volatility and capital outflows.