Global Markets Terms

A bond is a debt security whose yield influences currency values through interest-rate expectations and capital flows.

Deflation is a sustained fall in the general price level, often accompanied by weak demand and aggressive monetary easing.

The G7 is a coalition of major developed economies that coordinate on global economic policy. Their statements can hint at coordinated currency actions.

Geopolitical events include elections, wars, and diplomatic negotiations that shift risk sentiment and capital flows across currencies.

Government debt is the total amount a state owes to creditors. High debt loads influence credit ratings, yields, and currency stability.

Risk premium is the additional return investors demand for holding a risky asset versus a risk-free benchmark, shaping currency valuations and capital flows.

Sovereign debt is money owed by a national government. Traders monitor debt levels, financing costs, and default risk because solvency concerns directly influence currency strength.

Stagflation describes an economy stuck with weak growth and elevated inflation at the same time, leaving policymakers with few good options.

Systemic risk is the danger that stress at a single institution or market will cascade across the financial system, sparking liquidity crises and extreme FX volatility.

A trade deficit occurs when a country imports more than it exports. Persistent gaps require financing from investors or depreciation, making them vital for currency analysis.

A trade war occurs when countries impose tariffs or quotas on each other’s goods, disrupting trade flows and rattling currency markets.

The World Bank funds development projects and publishes economic research that shapes expectations for emerging-market growth and currency performance.

Yield is the return on an investment. In forex, yield differentials between countries drive carry trades and reflect policy expectations.

The yield curve plots interest rates across maturities; its slope reveals growth expectations, inflation pressures, and looming recession risks.