Markets need to pay attention to the OECD Economic Outlook report - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that the financial markets continue to anticipate the possibility of a second Fed rate increase taking place at either the June or July FOMC meetings, which until now has not resulted in any sharp deterioration in investor sentiment.

Key Quotes:

"Crude oil prices remain close to recent highs, the S&P 500 is very close to record highs and EM FX has been more orderly than prior to the first rate increase in December last year. But can this scenario continue?

The OECD yesterday released its semi-annual Economic Outlook report and it made for grim reading. According to the OECD, the world is stuck in a “low growth trap” with global trade growing by between 2-3% and global GDP set to expand by 3.0% this year with only a modest pick-up to 3.3% next year.

The OECD also criticised governments for not doing more to support growth arguing that central banks had exhausted their policy options to boost economic growth and hence governments needed to do more through investment spending and structural reform to boost economic growth.?