Keep the
language clear.

A rate expressed as if a change over a shorter interval repeated for a year. Quarterly growth q becomes (1 + q)⁴ − 1; it is not a year-over-year observation.

The first currency in a pair. In EUR/USD, the rate expresses the price of one euro in dollars.

The influence of the earlier comparison value on a reported growth rate. An annual rate can change as an unusual earlier month moves out of the comparison.

One hundredth of a percentage point: 0.01 percentage points. A rate change from 4.00% to 4.25% is 25 basis points.

A defined reference used for comparison, valuation or transactions. Its calculation rules and coverage matter.

The difference between a buying quote and a selling quote under specified conditions. It is one dimension of liquidity, not a complete measure.

The income or cost associated with holding or financing a position over time. It is only one component of a total return.

Assets pledged to support an obligation. Their value, eligibility and availability matter when additional collateral must be delivered.

A change in an aggregate that arises because the mix of its components changes. An average wage can rise when lower-paid jobs disappear even if no individual gets a pay rise.

An outlook calculated under specified assumptions. Changing the assumptions can change the outlook; the forecast is not an unconditional commitment.

The part of an aggregate change attributable to a component under the relevant weighting method. A contribution in percentage points differs from the component’s own percentage growth.

An inflation measure excluding selected components, often food and energy. Check the exact series definition rather than assuming all core indexes have identical coverage.

Consumer Price Index. A family of consumer-price measures; identify the country, population, coverage and comparison period when reading a number.

A decline in a broad price level over a stated period. It differs from a fall in a still-positive inflation rate.

Reducing exposure relative to available capital. Selling assets, adding capital or changing positions can affect leverage in different ways.

The amount available to trade at a price or across a range of prices, for a specified venue and moment.

A summary of the balance or distribution of survey responses. In the Tankan business-conditions index, favourable responses are compared with unfavourable responses.

A slowing rate of inflation. The price level can continue rising while the inflation rate falls.

The price of one currency expressed in another. The order of the currencies determines the units.

A benchmark determination at a defined time or window under a methodology. In an FX discussion, identify which benchmark is meant.

Central-bank communication about the possible future course of policy. Its meaning depends on the stated conditions and the institution’s framework.

The currency in which a position is financed. A low financing rate does not remove the risk of converting or repaying that currency.

Inflation for the broad published basket, including components that selected underlying measures may remove or downweight. Identify the exact index.

The Harmonised Index of Consumer Prices: price measures constructed for comparable inflation reporting across participating European countries.

A rate of increase in a broad price level. The measure, scope and time comparison are part of the meaning.

The capacity to transact, considering price, quantity and market conditions. Spread, depth and price impact describe related but distinct aspects.

Resources available to meet near-term cash or collateral needs. A portfolio’s long-run value does not establish that cash is accessible at the required moment.

A requirement to supply additional collateral or funds under an agreement. It creates a payment or delivery need on a particular timetable.

The change in market prices associated with trading activity. It can interact with other participants’ responses and available liquidity.

Combining offsetting obligations under applicable arrangements. Reducing the amount to transfer does not by itself make the two currency transfers conditional on each other.

Expressed without adjusting for changes in purchasing power. State the currency and period alongside a nominal return.

An arrangement linking the final transfer of one currency to the final transfer of the other, to reduce principal settlement risk.

The US personal consumption expenditures price index. Its construction differs from CPI. The Federal Reserve states its longer-run inflation objective in terms of PCE.

The arithmetic difference between two percentages. A move from 3% to 4% is one percentage point.

A conventional small increment used to discuss an FX quote. Its size depends on the quotation convention; the market-depth example uses 0.0001 USD per EUR.

A difference between policy settings or expected paths in two economies. Specify both economies and the horizon; current rates and expected future rates are not interchangeable.

A change in the rules or framework under which policy is conducted. Relationships observed under an earlier regime may not remain stable after that change.

The effect of trading on price. It should not be inferred solely from the best displayed spread.

The risk of delivering the currency owed while not receiving the currency due in an FX settlement. It differs from the cost of replacing a trade.

The second currency in a pair, used to express the price of the base currency. USD is the quote currency in EUR/USD.

A return adjusted for a change in purchasing power over a specified period. An observed adjustment and one using expected inflation answer different questions.

Adjusting holdings toward a chosen allocation. Rules, timing, cash flows and costs affect how it is implemented.

An update to an earlier published value. Read revisions alongside the newest observation when a release includes them.

A statistical treatment intended to account for recurring seasonal patterns. Check whether the numbers being compared use the same basis.

The completion of the payment or delivery obligations created by a transaction. Agreeing a price and settling the trade are different events.

Compensation associated with bearing interest-rate risk over a longer horizon, relative to a path of short-term rates. It is estimated, not directly observed in isolation.

A comparison with the same period one year earlier. It differs from a change since the immediately preceding month or quarter.

The relationship between yields and maturities for a specified set of debt instruments. Keep currency, credit quality and instrument conventions comparable.