FXStreet (Guatemala) - Analysts at TD Securities explained that the Turn in Global Inflation and What Lies Beneath While 2016 is expected to see some improvement in global growth, the outlook for inflation will be much more complicated. Key Quotes: "As the base effects of the decline in oil prices in late-2014 and early-2015 drop out of year-ago calculations, it is a foregone conclusion that global headline inflation will rise. While the impulse will grow stronger over the course of the year, the prevailing rate at the end of 2016 is nevertheless forecast to be at a non-crisis low. The outlook for core inflation remains even more muted and disparate across economies depending on the degree of slack and forecasted moves in the exchange rate. For developed market economies such as the United States and the United Kingdom that are set to experience above-trend growth, an anticipated appreciation in the exchange rate accompanying expectations for tighter monetary policy will curtail imported prices and ultimately core inflation." "The growth outlook for the Eurozone is expected to be reasonably upbeat, but by virtue of a tremendous amount of slack and the impact of additional currency weakness, core inflation is expected to remain benign. This will mean that any market expectations that the ECB will reverse course and hike in response to stronger growth will inevitably be disappointed. The opposite dynamic is expected in economies with a relatively subdued outlook for growth. In addition to a slower absorption of slack, the lagged and future inflationary impact of forecasted currency weakness will place additional pressure on imported prices and underlying inflation. This outcome is expected in commodity producing countries such as Australia, Canada, and New Zealand. The risk becomes more acute as headline inflation accelerates as the base effect from lower commodity prices fade. The differential expected in 2016 inflation underpins our recommendation to buy breakeven inflation in Canada versus the United States." For more information, read our latest forex news.