GLOBAL ECONOMICS WEEKLY：Lower debt yields should drive confidence
ECONOMICS RESEARCH 10 September 2010 PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 57 Global Forecasts 2Global Synthesis 3Global InFocus 5Learning from Japan: Mind the gap Global Rates and Inflation 8Global Markets Watch 9United States Outlook 10Data Review & Preview 12Western Europe Euro Area: Outlook 14InFocus: No credit constraint in Germany 16InFocus: France - Why 2010 will likely not be a repeat of 1995 19InFocus: The safe-haven status of the Swiss franc shines 22Data Review & Preview 25UK: Outlook 26Data Review & Preview 28Japan Outlook 29Data Review & Preview 31Emerging Asia China Outlook 32Asia (ex-China) Outlook 34Data Review & Preview 36EMEA Outlook 37Data Review & Preview 39Latin America Outlook 42InFocus: Mexico - Fiscal outlook 2011 44Data Review & Preview 46Country Snapshots 48Global Weekly Calendar 54 GLOBAL ECONOMICS WEEKLY Lower debt yields should drive confidence Firms have taken advantage of falling corporate bond yields and investor demand to issue new debt; this should support equities and global business confidence The improvement in financial conditions should help the Fed to proceed with a steady policy on September 21 Political developments are likely to be significant during the next few weeks as EU countries complete their 2011 budgets, and with the focus on US mid-term elections and the forthcoming DPJ President election in Japan With the contribution of net exports to GDP growth swinging back again in China's favour, FX-related tensions could re-emerge Developed Economies US: Firms are responding to incentives 10 US equipment and software spending has been growing unusually fast relative to private employment. Euro area: A slowing pace of industrial expansion 14 We have raised our estimates of real GDP expansion for Q3 for Germany, France and Ireland: overall, we look for euro area real GDP to have grown 0.3% in Q3. UK: Slow growth, sticky inflation, stuck policy 26 The data continue to indicate a slowing in activity, but there are few signs of lasting relief on the inflation front, and policy stasis is likely for some time. Japan: Sentiment sags, economy holds firm 29 Sentiment has softened, but the hard data indicate that the recovery remains intact, even if there is some volatility along the growth path linked to expiring policy supports. Emerging Markets China: More positive news on Q3 growth 32 August data released so far support our positive growth outlook for Q3, with import growth rebounding and property investment growth edging up. Emerging Asia (ex-China): Difficult balancing act 34 Export momentum slowed further in August, as global demand moderated. EMEA: Different monetary policies for different needs 37 Monetary policies in the region differ significantly, reflecting the varying challenges central banks face. Latin America: What makes you tick? 42 Although inflation has remained generally low in the region, the reaction elicited from central banks has been varied. Barclays Capital | Global Economics Weekly 10 September 2010 2 GLOBAL FORECASTS 4Q091Q102Q103Q104Q101Q112Q112009201020111Q103Q101Q113Q11Global4.95.24.63.63.63.84.1-0.84.74.12.52.52.52.7Developed3.23.12.72.3↑2.12.02.3-3.52.42.31.51.21.31.6Emerging7.07.96.95.35.46.16.32.57.56.44.95.55.35.3BRIC6.59.26.97.46.77.17.35.28.87.84.04.64.34.2America5.74.03.02.43.32.93.3-2.63.53.13.32.72.63.0United States5.03.71.62.53.02.53.0-2.62.82.82.41.21.11.7Canada4.95.82.02.53.03.03.0-2.53.22.81.61.92.01.8Latin America7.64.47.02.33.94.04.2-2.55.44.17.78.78.88.7Argentina5.57.57.56.23.23.33.3-4.06.13.820.025.826.824.1Brazil9.311.44.02.83.54.05.5-0.27.34.45.25.05.15.4Chile6.5-6.018.47.57.06.06.0-1.55.26.8-0.32.53.33.9Colombia4.55.35.03.04.54.54.50.84.54.32.02.32.73.3Mexico10.1-2.513.5-0.53.53.53.0-6.55.03.34.83.73.34.0Peru6.110.15.36.37.17.05.40.97.16.40.82.32.92.8Venezuela-3.7-10.6-8.4-2.94.63.50.9-3.3-5.42.026.133.233.130.1Asia/Pacific6.49.26.56.1↑5.66.36.43.87.76.31.92.32.22.3Japan3.4↓5.0↑1.54.0↑0.6↓1.2↑0.1↓-5.23.2↑1.4↑-1.2-1.1-0.9-0.4Australia4.42.7↑4.8↓3.42.72.24.71.23.33.52.93.03.13.1Emerging Asia7.210.57.86.87.07.78.06.19.07.63.54.13.93.7China11.09.28.49.39.38.98.99.110.19.02.23.43.73.6Hong Kong10.08.75.7-5.9-0.87.07.0-2.85.14.01.93.12.32.8India-3.013.47.88.07.08.08.06.78.88.310.29.35.85.5Indonesia6.65.36.67.86.14.96.14.56.36.23.44.65.75.8Korea0.78.86.02.81.44.76.20.26.14.02.72.7↑2.5↑2.1↑Malaysia12.56.76.62.23.05.57.2-1.77.55.01.31.71.61.9Philippines7.214.69.7-5.96.17.47.81.17.05.04.44.73.63.7Singapore-1.045.724.0-15.42.37.08.0-1.314.54.01.13.33.11.3Taiwan16.710.97.20.20.65
