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Highlights

Highlights. Second-quarter GDP growth slows in U.S. and Japan… surges in Euro Zone growth at seasonally-adjusted annualized rates. Source: National Agencies through Datastream.

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Highlights

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  1. Highlights

  2. Second-quarter GDP growth slows in U.S. and Japan… surges in Euro Zonegrowth at seasonally-adjusted annualized rates Source: National Agencies through Datastream.

  3. Domestic demand growth was robust in the United States and Europe in Q2-10domestic demand, growth at seasonally adjusted annualized rates Source: World Bank, DEC Prospects Group.

  4. OECD Developments

  5. Second-quarter GDP growth slows in U.S. and Japan… surges in Euro Zonegrowth at seasonally-adjusted annualized rates Source: National Agencies through Datastream.

  6. Domestic demand in U.S. and Europe… offset and amplified by external tradegrowth at seasonally-adjusted annualized rates contributions to growth a annualized rates Domestic demand growth Foreign contribution to GDP Source: World Bank, DEC Prospects Group.

  7. Second-quarter surge in trade unlikely to be sustainedU.S real imports of goods and services; German real exports of goods and services Source: Thomson/Datastream and DEC Prospects Group

  8. U.S. retail up monthly in July & Augustbut momentum has faded as savings riseretail ex autos and real-PCE, ch% (saar) [L]; personal saving rate (%) right Source: U.S. Department of Commerce.

  9. U.S. factory output easing with I/S in better balance and orders down manufacturing production, ch% (saar) [Left]; capital goods orders, ch% (saar) [Right] Mfgr production [left scale] Source: Thomson/Datastream and DECPG calculations.

  10. U.S. employment growth stagnant while hourly earnings drop to 1.7% growth (y/y)change in non-farm employment (‘000), [Left]; hourly earnings (ch%, year/year) Hourly earnings, [right scale] Change in employment [left scale] Source: U.S. Department of Labor.

  11. Japan’s 2nd quarter growth falters on weaker net exports and consumer spending growth of real GDP, and contributions to growth in percentage points Source: Japan Cabinet Office, MITI.

  12. Japan’s export volumes fall to negative ground on weaker Asian demand and stronger yengoods export volumes, ch% (saar) [Left]; yen per U.S. dollar [right] Export volumes [left scale] Yen per U.S. dollar [right scale] Source: Thomson/Datastream and DECPG calculations.

  13. Euro zone growth mixed across countriesGDP growth

  14. Investor expectations of future economic conditions on downward path in Germany Source: World Bank, DEC Prospects Group

  15. Planned budget cuts in Europe (%GDP) in 2010-2015 Source: CESIFO

  16. U.S. LIBOR easing on expectations of continued loose policy on part of the Fed EURIBOR 6M USD LIBOR 6M Source: Thomson/Datastream.

  17. Industrial Production

  18. Industrial growth momentum slows down across regions (3mm, saar)

  19. In contrast with other economies, industrial production firms up in the US (3mm, saar)

  20. Global PMI for manufacturing output continues downslide

  21. International Trade

  22. World trade growth has recovered to pre-crisis levels

  23. US and Japan import demand gaining momentum

  24. An unabated accumulation of trade distorting measures Source: National Agencies through Datastream.

  25. Commondity Prices

  26. Daily oil prices

  27. OPEC production and spare capacity

  28. OECD oil stocks

  29. Agriculture Prices

  30. Nickel price and LME stocks

  31. World Copper Consumption

  32. International Finance

  33. Capital flows to emerging markets slowed in August Source: DECPG

  34. Bank lending has failed to recover to pre-crisis levels

  35. Sovereign debt of some European countries is under pressure again Source: Bloomberg and DECPG staff calculations.

  36. Market Focus: EM Valuation

  37. Equity Performance(Rebased) Source: MSCI

  38. Relative equity valuation EM vs DM Source: Bloomberg, MSCI, CCS Calculations

  39. Currencies and Inflation

  40. Euro picks up modestly…. Japan weakens yen at 15-year high vs USD USD per Euro (inverse) [Left] and Yen per USD [right] USD/Euro (inverse) yen/USD Source: Thomson/Datastream and DECPG calculations.

  41. Mixed developments in real effective exchange rates real effective exchange rates, indexes, January 2009 = 100 Source: IMF and DEC Prospects Group.

  42. Headline CPI inflation broadly easingsave for India and China ”Headline” consumer price indexes, ch% (year-on-year) Source: IMF and DEC Prospects Group.

  43. Focus: Developments in international grain markets

  44. Announcement of the export ban by Russia (August 5) Weather-related problems began unfolding

  45. Wheat Global Balance Source: US Department of Agriculture (September 10, 2010 update). Note: The years refer to marketing years (June-May), i.e., 2011 corresponds to June 2010-May 2011. The 2010 and 2011 figures are estimates and projections, respectively.

  46. Energy and Fertilizer Nominal Price Indices, 2000=100

  47. Countries with the highest dependency on wheat imports relative to their GDP Source: DECPG estimates

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