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Economic Forecasts
GDP
Year 2010
2011
(% y/y) ’09 ’10 (1) ’11 (1) Q1 Q2 (1) Q3 (1) Q4 (1) Q1 (1) Q2 (1) Q3 (1) Q4 (1)
US -2.4 2.9 2.8 2.4 3.4 3.4 2.6 2.6 2.7 2.9 3.1
Eurozone -4.1 1.2 0.6 0.6 1.4 1.3 1.4 1.2 0.6 0.4 0.4
Japan -5.2 3.6 2.3 4.6 3.0 3.7 3.2 2.4 2.5 2.2 2.1
World (2) -0.6 4.5 3.8 4.7 4.8 4.5 4.2 3.9 3.8 3.8 3.9
Industrial Production
Year
2010
2011
(% y/y) ’09 ’10 (1) ’11 (1) Q1 Q2 (1) Q3 (1) Q4 (1) Q1 (1) Q2 (1) Q3 (1) Q4 (1)
US -9.7 5.5 4.6 2.4 7.0 6.6 5.9 5.1 4.5 4.4 4.5
Eurozone -14.6 8.1 0.8 4.2 10.1 9.9 8.0 3.4 0.4 -0.2 -0.3
Japan -21.9 18.6 5.3 27.5 21.4 16.5 11.7 5.7 5.2 5.4 4.8
Unemployment Rate
Year
2010 2011
(%) ’09 ’10 (1) ’11 (1) Q1 Q2 (1) Q3 (1) Q4 (1) Q1 (1) Q2 (1) Q3 (1) Q4 (1)
US 9.3 9.6 8.5 9.7 9.8 9.6 9.5 9.2 8.7 8.2 8.0
Eurozone 9.4 10.0 10.3 10.0 10.0 10.0 10.0 10.1 10.2 10.3 10.4
Japan 5.1 4.8 4.2 4.9 5.1 4.8 4.6 4.4 4.3 4.1 4.0
CPI
Year
2010
2011
(% y/y) ’09 ’10 (1) ’11 (1) Q1 Q2 (1) Q3 (1) Q4 (1) Q1 (1) Q2 (1) Q3 (1) Q4 (1)
US -0.4 1.7 1.0 2.4 1.8 1.4 1.2 1.0 1.3 1.0 0.7
Eurozone 0.3 1.6 1.5 1.1 1.5 1.8 2.1 2.0 1.5 1.4 1.3
Japan -1.4 -0.6 -0.2 -1.2 -0.9 -0.5 0.2 -0.3 -0.2 -0.1 -0.2
Current Account
(% GDP) ’09
Year
’10 (1) ’11 (1) General Government
(% GDP)
’09
Year
’10 (1) ’11 (1)
US -2.7 -2.7 -2.7 US (4) -9.9 -10.0 -8.4
Eurozone -0.6 -0.3 -0.1 Eurozone -6.3 -6.6 -5.3
Japan 2.8 3.9 3.9 Japan -10.7 -9.4 -6.8
Interest Rate Forecasts
Interest Rate (3)
Year
2010
2011
(%) ’09 ’10 (1) ’11 (1) Q1 Q2 Q3 Q4 Q1 Q2 (1) Q3 (1) Q4 (1)
US
Fed Funds Rate 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
3-month Rate 0.25 0.95 0.75 0.29 0.54 1.00 0.95 0.90 0.85 0.80 0.75
2-year yield 1.14 0.75 2.00 1.02 0.68 0.75 0.75 0.85 1.00 1.25 2.00
10-year yield 3.84 3.00 3.75 3.83 3.12 2.90 3.00 3.10 3.25 3.50 3.75
2y/10y Spread (bp) 269 225 175 281 244 215 225 225 225 225 175
Eurozone
Refinancing Rate 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
3-month Rate 0.70 0.70 1.00 0.63 0.74 0.85 0.70 0.65 0.70 0.80 1.00
2-year yield 1.37 0.50 1.25 0.97 0.58 0.40 0.50 0.50 0.50 0.50 1.25
10-year yield 3.40 2.00 3.00 3.10 2.65 2.20 2.00 2.10 2.25 2.60 3.00
2y/10y Spread (bp) 203 150 175 212 207 180 150 160 175 210 175
Japan
O/N Call Rate 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
3-month Rate 0.46 0.40 0.40 0.43 0.38 0.40 0.40 0.40 0.40 0.40 0.40
2-year yield 0.15 0.25 0.75 0.18 0.16 0.20 0.25 0.30 0.35 0.55 0.75
10-year yield 1.30 1.40 1.80 1.40 1.15 1.30 1.40 1.50 1.60 1.70 1.80
2y/10y Spread (bp) 115 115 105 122 99 110 115 120 125 115 105
Footnotes: (1) Forecast (2) Country weights used to construct world growth are those in the IMF World Economic Outlook Update
April 2010 (3) End Period (4) Fiscal year Figures are y/y percentage change unless otherwise indicated
Market Economics / Interest Rate Strategy 16 July 2010
Market Mover
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