- Convergence
- The movement of the price of a futures contract toward the price of the underlying cash commodity. At the start, the contract price is higher because of the time value. But as the contract nears expiration, the futures price and the cash price converge. The New York Times Financial Glossary
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1. if two or more rates of interest, unemployment etc converge, they move to the same level:converge with• Irish productivity per worker has converged with the EU norms.
2. ECONOMICS if two or more economies converge, they start to have the same characteristics such as the same levels of inflation, interest rates etc. The economies of countries wanting to join the EU have to converge with those of existing members before they can join:converge with• Britain's economy has not yet converged sufficiently with those of the present participants in the euromarket.
— compare diverge— convergent adjective :• The Asian crisis showed the convergent, rather than divergent, nature of emerging economies.
— convergence noun [uncountable] :• employment policies that work against regional convergence
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The process by which a futures price moves toward the price of the underlying instrument as expiry approaches. Also, the movement of interest rates in applicant countries towards those prevailing in the currency bloc which they are aspiring to join. This is a new factor in the market trading of the countries that want to join the Eurozone.► See also Basis Risk, Futures.* * *
converge UK US /kənˈvɜːdʒ/ verb► [I] ECONOMICS if two or more economies converge, they become more similar to each other: converge with sth »The European economies have not yet converged with each other enough to make the euro a lasting success.
► [I or T] ECONOMICS if prices, levels, or rates converge or are converged, they become or are made more similar to each other: »Price/earnings ratios of different industrial sectors have dramatically converged in recent years.
»Increasing flexibility in transportation will have the effect of converging gas prices around the world.
► [I or T] COMMERCE if two different types of product, industry, etc. converge or are converged, they join together or are joined together: »Fixed and mobile phone services are increasingly converging.
»The new system allows customers to converge high-speed internet content with satellite TV.
convergence noun [U]► »the convergence of digital and broadcast media
Financial and business terms. 2012.
