Global Chart Book - March 2010

March 11, 2010
Economics Group
Special Commentary
Global Chartbook: March 2010

Executive Summary: Will the Global Economy Expand in 2010? Contents Page
The seizing of financial markets that followed Lehman Brothers’ failure caused the global
economy to fall into its deepest recession in decades. By the spring of 2009 industrial production World .........................3
(IP) in the 30 countries that comprise the Organisation for Economic Cooperation and United States .............4
Development (OECD) had plunged more than 15 percent from year-earlier levels (Figure 1). Eurozone....................5
Japan..........................6
Incredibly, it could have been far worse. The governments of the world’s major countries averted United Kingdom ........7
catastrophe at the height of the crisis by taking steps to prevent a wholesale collapse of their Australia.....................8
financial systems via recapitalization, loan guarantees and increased deposit insurance. In Canada .......................9
addition, major central banks slashed policy rates to unprecedented levels, and many
implemented programs of “quantitative easing” to provide further stimulus. Governments in most Norway.....................10
major countries opened the fiscal taps. One year later, there are clear signs that the medicine is Singapore ..................11
having its desired effects as IP in the OECD nations turned slightly positive in December 2009. South Korea ............. 12
Unfortunately, however, OECD IP remains 12 percent below its February 2008 peak. At its Sweden..................... 13
current rate of increase, IP will not return to its previous peak until mid-2011. Switzerland .............. 14
Figure 1 Figure 2 Taiwan ..................... 15
Argentina ................. 16
OECD Industrial Production U.S. Trade Weighted Dollar Major Index Brazil ........................ 17
Year-over-Year Percent Change March 1973=100
10% 10% 115 115
Chile ......................... 18
110 110 China........................ 19
5% 5%
105 105 India........................ 20
0% 0%
100 100 Mexico...................... 21
95 95 Poland ......................22
-5% -5% 90 90
Russia.......................23
85 85
South Africa .............24
-10% -10% Turkey ......................25
80 80
-15% -15%
75 75
Dollar .......................26
OECD Industrial Production: Dec @ 0.7%
70
Major Currency Index: Feb @ 76.0
70
Energy......................27
-20% -20% 65 65
81 85 89 93 97 01 05 09 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: IHS Global Insight, Organisation for Economic Cooperation and Development, Bloomberg LP
and Wells Fargo Securities, LLC
The global recovery is being led by Asia where growth turned positive again last year. The
financial systems of most Asian economies were not nearly as levered as their western
counterparts, so banks in the region were able to ramp up lending again. In addition, most Asian
governments responded to the crisis with expansionary fiscal policy. Real GDP in China increased
nearly 11 percent on a year-ago basis in the fourth quarter of 2009, but the expansion is not
confined to only China. Many other countries in the region, including the large economies of
Japan, Korea and Taiwan, are posting positive growth rates again. Because self-sustaining
This report is available on wellsfargo.com/research and on Bloomberg WFEC

Global Chartbook: March 2010 WELLS FARGO SECURITIES, LLC
March 11, 2010 ECONOMICS GROUP
economic recoveries appear to be taking hold, most Asian governments are beginning to remove
emergency stimulus measures that were put in place when the outlook was bleak. However, we
believe it will be quite some time before economic policies turn restrictive in most Asian
countries.
Western economies have stabilized as well. Real GDP in the United States rose about 2 percent in
the second half of 2009, retracing about half of the drop that occurred during the downturn. The
temporary effects of fiscal stimulus certainly played a role in stabilizing the economy, but recent
increases in core measures of retail sales and capital spending indicate that there is more to the
story than simply fiscal stimulus. In our view, the U.S. economic recovery will remain intact this
year, but the pace of the upturn will likely remain frustratingly slow. Due to slow economic
growth and benign inflation, the Federal Reserve will likely refrain from hiking rates until late
this year.
Economic activity in the euro area has stopped falling, but the upturn lacks vigor. Domestic
demand remains weak, and exports are the only real source of growth at present. Moreover,
attempts by governments in some eurozone economies to slash their budget deficits (e.g., Greece,
Ireland, Portugal and Spain) will weigh on economic growth in the quarters ahead. Although we
project that economic growth in the euro area will remain positive this year, the probability of a
double-dip recession is not insignificant.
On a purchasing power parity basis, global GDP probably contracted about 1 percent in 2009. We
project that the global economy will grow about 4 percent in 2010, a bit above its long-run
average. Relative to 2004-2007, however, when global GDP grew nearly 5 percent per annum, the
global recovery this year may seem a bit slow. Asia should lead the pack, and the eurozone will
likely be the clear laggard. Growth in North America should fall somewhere between these two
extremes.
Inflation rates in most countries shot higher in the first half of 2008 and commodity prices went
through the roof. On a global basis, CPI inflation rose to 6 percent in 2008, the highest rate in
about 10 years. However, the global downturn caused commodity prices to collapse, and global
inflation receded significantly last year. Despite unprecedented amounts of monetary stimulus,
inflation should not really be an issue until the global economy truly strengthens. Due to the
relatively slow recovery that we project, we believe that inflation in most countries should remain
manageable over our forecast period.
The Dollar Should Appreciate Modestly versus Major Currencies
The U.S. dollar trended lower throughout most of 2009 as the recovery in the global economy
caused the greenback to lose its safe-haven appeal. However, the dollar has gotten off to a strong
start in 2010, especially against the euro and other European currencies. U.S. economic data has
generally been stronger than expected, while the upturn on the other side of the Atlantic has been
disappointing thus far. Concerns about the Greek debt situation have also weighed on the euro.
Looking ahead, our view, and that of the currency strategy team at Wells Fargo, is that the dollar
will trend modestly higher against most major currencies. As the U.S. recovery gathers steam,
foreign investment flows into long-term securities (e.g., corporate bonds and equities) and direct
investment inflows should continue to strengthen, helping to lift the greenback. In addition, the
diminished U.S. current account deficit will exert fewer headwinds on the greenback than it did
earlier this decade when the dollar was trending lower.
However, most “commodity” and emerging market currencies should continue to trend higher
versus the greenback in the quarters ahead. The global recovery will likely cause most commodity
prices to drift higher, which should help to support “commodity” currencies (e.g., the Aussie
dollar). In addition, rising levels of risk tolerance will clear the way for capital to flow to “risky”
developing countries, which should put upward pressure on many of those currencies.
2
OECD Industrial Production

World 120
Index, 2005=100
120
The global economy is bouncing back from its

deepest recession in decades, though industrial 100 100
production in the OECD nations remains well
below the peak that was reached in early 2008.
Purchasing manager indices have generally
80 80
remained in expansion territory, suggesting
that the global recovery remains intact. Most
regions of the world are growing again, with
Asia clearly in the vanguard. 60 60
The major governments of the world averted

catastrophe in the fall of 2008 by taking steps OECD Industrial Production: Dec @ 95.6
40 40
to prevent the global financial system from 1981 1985 1989 1993 1997 2001 2005 2009
collapsing. In addition, most major
governments enacted fiscal stimulus programs
to shore up economic activity. Global Purchasing Manager's Indices
Diffusion Index
Not only have interest rates been reduced to 65 65
unprecedented lows, but major central banks

60 60
have enacted “quantitative easing” programs
via unconventional purchases of private sector 55 55
assets. Central banks in some countries (e.g.,
Australia and Norway) have started to hike 50 50
rates again, but the Fed, the ECB and the Bank
of Japan remain firmly on hold. 45 45
Deep global recession and the collapse in

40 40
commodity prices caused inflationary
Courtesy of J.P. Morgan
pressures to recede significantly. Commodity 35 35
prices have risen off their lows, but elevated Global PMI Manufacturing: Feb @ 55.2
Global PMI Services: Feb @ 52.6
unemployment rates have kept a lid on wage 30 30
inflation. We forecast that CPI inflation rates 2004 2005 2006 2007 2008 2009
will trend higher this year, but runaway global

inflation à la the 1970s does not seem likely. Central Bank Policy Rates
8.0% 8.0%
ECB: Mar @ 1.00%
Global CPI 7.0%
Bank of Canada: Mar @ 0.25%
7.0%
Year-over-Year Percent Change US Federal Reserve: Mar @ 0.25%
16% 16% Bank of England: Mar @ 0.50%
6.0% 6.0%
14% 14%
5.0% 5.0%
12% 12%
4.0% 4.0%
10% 10%
3.0% 3.0%
8% 8%
2.0% 2.0%
6% Forecast 6%
1.0% 1.0%
4% 4%
0.0% 0.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2% 2%
0% 0% Source: U.S. Department of Commerce, U.S. Department of Labor

1995 1998 2001 2004 2007 2010 and Wells Fargo Securities, LLC
3
Real GDP
United States 10.0%
Bars = CAGR Line = Yr/Yr Percent Change
10.0%
GDPR - CAGR: Q4 @ 5.9%
After enduring its deepest recession in 8.0% GDPR - Yr/Yr Percent Change: Q4 @ 0.1% 8.0%
decades, the U.S. economy grew again in the 6.0% 6.0%

second half of 2009 and monthly indicators Forecast
4.0% 4.0%
point to continued growth in the first quarter.
Some of the growth reflects the temporary 2.0% 2.0%
effects of government stimulus. In addition, a 0.0% 0.0%

one-time inventory swing in the fourth quarter
overstates the underlying strength of the -2.0% -2.0%
economy at present. -4.0% -4.0%
It would be incorrect, however, to claim that -6.0% -6.0%

the rise in GDP over the past few quarters is
-8.0% -8.0%
due entirely to stimulus. Core measures of 2000 2002 2004 2006 2008 2010
consumer spending and business spending
have posted solid gains over the past few
Retail Sales Ex. Motor Vehicles & Gasoline Stations
months. 3-Month Moving Average
Unfortunately, the pace of growth will probably 12% 12%
be sluggish for the next year or so. Many 9% 9%

consumers need to delever further, which will
6% 6%
likely constrain growth in consumer spending.
Unemployment has shot up to the highest rate 3% 3%
since the early 1980s, and the slow pace of 0% 0%

recovery will likely keep it elevated for the
foreseeable future. -3% -3%
Core measures of inflation are very benign at -6% -6%
present, which allows the Federal Reserve to -9% -9%

keep rates low “for an extended period.”
Year-over-Year Percent: Jan @ 1.7%
Although the Fed has started to remove some -12%
Retail Sales, ex. Autos & Gas, 3-Month Annual Rate: Jan @ 5.4%
-12%
emergency measures that were put in place -15% -15%

more than a year ago, we do not look for an 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
increase in the fed funds rate until late this

year. Unemployment Rate
Seasonally Adjusted
12% 12%
CPI vs. Core CPI

Year-over-Year Percent Change
6.0% 6.0% 10% 10%
5.0% 5.0%
4.0% 4.0% 8% 8%
3.0% 3.0%
6% 6%
2.0% 2.0%
1.0% 1.0%
4% 4%
0.0% 0.0%
Unemployment Rate: Feb @ 9.7%

-1.0% -1.0%
2% 2%
60 65 70 75 80 85 90 95 00 05 10
-2.0% CPI: Jan @ 2.6% -2.0%
Core CPI: Jan @ 1.6%
-3.0% -3.0% Source: U.S. Department of Commerce, U.S. Department of Labor
92 94 96 98 00 02 04 06 08 10 and Wells Fargo Securities, LLC
4
Euro-zone Real GDP

Eurozone 6.0%
Bars = Compound Annual Rate Line = Yr/Yr % Change
6.0%
Following its 5 percent contraction between 4.0% 4.0%
early 2008 and mid-2009, real GDP in the 2.0% 2.0%

eurozone has grown for two consecutive
0.0% 0.0%
quarters. However, the pace of the recovery
remains painfully slow with real GDP up only -2.0% -2.0%
0.5 percent in the second half of 2009. -4.0% -4.0%

Purchasing managers’ indices suggest that
economic activity has continued to expand in -6.0% -6.0%
the first quarter, albeit at a sluggish pace. -8.0% -8.0%
Despite two consecutive quarters of growth, -10.0% Compound Annual Growth: Q4 @ 0.4% -10.0%
the recovery in the eurozone is hardly self- Year-over-Year Percent Change: Q4 @ -2.1%
-12.0% -12.0%
sustaining at present. Consumer spending was 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
flat in the fourth quarter and investment
spending posted its seventh consecutive
quarter of decline. Exports were the only area Euro-zone Purchasing Manager Indices
Index
of strength in the fourth quarter. 65 65
The well-publicized debt problems of some

60 60
European governments will also have growth
implications. Although a break-up of the 55 55
European Monetary Union is very unlikely,
some national governments in the eurozone 50 50
need to make significant fiscal corrections in
the years ahead. Contractionary fiscal policy 45 45
will weigh on economic prospects in the euro

area for the foreseeable future. 40 40
Weak growth and benign inflation imply that 35 35

the European Central Bank can keep monetary E.Z. Manufacturing: Feb @ 54.2
E.Z. Services: Feb @ 51.8
policy accommodative for an extended period. 30 30
Indeed, we believe that the ECB will keep its 1998 2000 2002 2004 2006 2008 2010
main policy rate at 1 percent, where it has been

maintained since May 2009, into early 2011. Government Debt and Deficits
Percent of GDP
120% 120%
Debt
Euro-zone Consumer Price Inflation 110%
Deficit
110%
Year-over-Year Percent Change 100% 100%
5.0% 5.0%
Core CPI: Jan @ 0.9% 90% 90%
CPI: Jan @ 1.0%
80% 80%
4.0% 4.0%
70% 70%
60% 60%
3.0% 3.0%
50% 50%
40% 40%
2.0% 2.0%
30% 30%
20% 20%
1.0% 1.0%
10% 10%
0% 0%
0.0% 0.0% Greece Ireland Portugal Spain
-1.0% -1.0% Source: Bank of England, EuroStat, IHS Global Insight, Statistics
1997 1999 2001 2003 2005 2007 2009 Canada and Wells Fargo Securities, LLC
5
Japanese Real GDP

Japan 10%
10%
Fears of a double-dip recession in Japan have

faded in recent months. Fourth-quarter GDP 5% 5%
came in far stronger than the consensus

expected. Nevertheless, the data were in line 0% 0%
with our view that Japan’s rebound in 2010
could be somewhat stronger than many expect.
Japanese exports are leading the recovery, but -5% -5%
solid advances in domestic spending, both

business and consumer, suggest the recovery in
-10% -10%
Japan is broadening out.
Compound Annual Growth: Q4 @ 4.6%
Japanese orders continue to advance at a Year-over-Year Percent Change: Q4 @ -0.9%
-15% -15%
robust clip. Core machinery orders rose 20.1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
percent month over month in December to
their highest level in 12 months. Foreign
orders also remained strong, rising at a 20.9 Japanese Industrial Production Index
percent pace in December. Manufacturing and 20% 20%
business spending should continue to lead

Japan out of its deep economic hole. 10% 10%
Even Japan’s labor market is showing

increasing signs of healing. Employment 0% 0%
jumped 0.9 percent in January, the biggest

monthly gain in 24 years. This helped the -10% -10%
unemployment rate drop to 4.9 percent, the
lowest reading in 10 months and well below the -20% -20%
July record of 5.7 percent.
Japan’s retail sales and consumer confidence -30% -30%
both advanced in January, despite a structural IPI: Jan @ 18.9%
3-Month Moving Average: Jan @ 6.1%
shift away from department stores. Real -40% -40%
consumption from working households is now 1997 1999 2001 2003 2005 2007 2009
1.5 percent above year-ago levels. February

vehicle sales remained up sharply, rising 35.9 Japanese Unemployment Rate
percent from year-ago levels. 6.0% 6.0%
Japanese Retail Sales

Year-over-Year Percent Change 5.5% 5.5%
15.0% 15.0%
12.0% 12.0%
5.0% 5.0%
9.0% 9.0%
6.0% 6.0% 4.5% 4.5%
3.0% 3.0%
4.0% 4.0%
0.0% 0.0%
-3.0% -3.0%
3.5% 3.5%
-6.0% -6.0%
Unemployment Rate: Jan @ 4.9%
-9.0% -9.0% 3.0% 3.0%
1997 1999 2001 2003 2005 2007 2009
-12.0% Retail Sales: Jan @ 2.7% -12.0%
6-Month Moving Average: Jan @ -0.4%
-15.0% -15.0% Source: Bloomberg LP, IHS Global Insight and
1997 1999 2001 2003 2005 2007 2009 Wells Fargo Securities, LLC
6
U.K. Real GDP

United Kingdom 6.0%
6.0%
After six consecutive quarters of contraction in 4.0% 4.0%
which real GDP fell more than 6 percent,

2.0% 2.0%
economic growth in the United Kingdom
returned to positive territory in the fourth 0.0% 0.0%
quarter of 2009. Further increases in the
purchasing managers’ indices in recent months -2.0% -2.0%
suggest that growth has remained positive in -4.0% -4.0%

the first quarter.
Following its downturn last year, consumer
-6.0% -6.0%
spending has strengthened over the past few -8.0% Compound Annual Growth: Q4 @ 0.4% -8.0%
quarters. In addition, exports grew at a double- Year-over-Year Percent Change: Q4 @ -3.2%
-10.0% -10.0%
digit pace in the fourth quarter. However, 2000 2002 2004 2006 2008
capital spending continues to contract. It
appears that businesses may be unwilling to
commit to capex as long as uncertainties U.K. Purchasing Manager Indices
Index
regarding the economic outlook remain high. 65 65
In our view, the U.K. economy will expand

60 60
throughout 2010. However, continued
deleveraging by the household sector will likely 55 55
exert headwinds on consumer spending
growth. In addition, fiscal tightening also will 50 50
weigh on overall economic growth.
The overall rate of CPI inflation is well above 45 45
the Bank of England’s target of 2 percent at

40 40
present. However, CPI inflation has been
pushed up in recent months by some 35 35
temporary factors including the hike in the UK Manufacturing: Feb @ 56.6
UK Services: Feb @ 58.4
value-added tax. We forecast that inflation will 30 30
retreat in coming months, which will give the 2000 2002 2004 2006 2008 2010
Bank of England the wherewithal to remain on

hold until late this year. United Kingdom Retail Sales
9.0% 9.0%
U.K. Consumer Price Index

6.0% 6.0%
6.0% 6.0%
5.0% 5.0%
3.0% 3.0%
4.0% 4.0%
3.0% 3.0%
0.0% 0.0%
2.0% 2.0%
Retail Sales: Jan @ 0.6%
-3.0% -3.0%
1.0% 1.0% 1999 2001 2003 2005 2007 2009
CPI: Jan @ 3.4%

0.0% 0.0% Source: Bank of England, EuroStat, IHS Global Insight, Bloomberg,
1997 1999 2001 2003 2005 2007 2009 LP and Wells Fargo Securities, LLC
7
Australian Real GDP

Australia 10%
10%
After sidestepping the worst of the fallout from 8% 8%
the global financial crisis, Australian economic

6% 6%
growth picked up speed in the last quarter of
2009 expanding at a 3.7 percent annualized 4% 4%
pace. The largest contribution to growth came
from an increase in government spending, 2% 2%
likely a reflection of public infrastructure 0% 0%

projects created to help jumpstart the
economy. -2% -2%
But growth in the fourth quarter was -4% Compound Annual Growth: Q4 @ 3.7% -4%
supported by consumer spending as well. A Year-over-Year Percent Change: Q4 @ 2.7%
-6% -6%
6.8 percent jump in auto purchases was the 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
main contributor to growth in household final
consumption, along with a more modest 0.7
percent pick-up in rent and other dwelling Australian GDP Contributions
Year-over-Year Percentage Contribution to GDP
services. It is not yet clear how much the 1.0% 1.0%
strength in spending has to do with

government incentive programs, but we 0.8% 0.8%
suspect domestic demand may wane somewhat

as government programs wind down. Indeed, 0.6% 0.6%
following the year-end expiration of the rebate

0.4% 0.4%
program for cars, January auto sales slipped
3.4 percent. 0.2% 0.2%
The Reserve Bank of Australia (RBA) has been

at the forefront of central banks willing to “take 0.0% 0.0%
away the punch bowl” as it has raised its key

lending rate 100 basis points since this past -0.2%
Household Expenditures: Q4 @ 0.4%
-0.2%
October. Still, we expect the RBA will take a General Government Expenditures: Q4 @ 0.3%
-0.4% -0.4%
measured approach to removing stimulus from 2007 2008 2009
the economy. Inflation is not yet a big concern.
The RBA will also be watching to see if the
Australian Consumer Price Index
recovery is self-sustaining once incentives fade. Year-over-Year Percent Change
10.0% 10.0%
Central Bank Policy Rates

8.0% 8.0%
9.0% 9.0%
US Federal Reserve: Mar @ 0.25%
8.0% Bank of England: Mar @ 0.50% 8.0%
Reserve Bank of Australia: Mar @ 4.00% 6.0% 6.0%
7.0% 7.0%
4.0% 4.0%
6.0% 6.0%
5.0% 5.0%
2.0% 2.0%
4.0% 4.0%
0.0% 0.0%
3.0% 3.0%
Overall CPI : Q4 @ 2.1%
2.0% 2.0%
-2.0% -2.0%
1995 1998 2001 2004 2007
1.0% 1.0%
0.0% 0.0% Source: Bloomberg LP, IHS Global Insight and

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Wells Fargo Securities, LLC
8
Canadian Real GDP

Canada 6.0%
6.0%
The Canadian economy shrank 2.6 percent for 4.0% 4.0%

the full-year 2009—the biggest contraction
since 1982. But it ended the year on an 2.0% 2.0%
upswing, growing at a 5.0 percent annual pace

in the fourth quarter—the fastest sequential 0.0% 0.0%
growth rate since the third quarter of 2000.

-2.0% -2.0%
The recovery in the third quarter was fueled by
a 3.5 percent annualized increase in personal -4.0% -4.0%
consumption expenditures. Business and

government spending also posted gains in the -6.0%
-6.0%
fourth quarter. Final domestic demand is now Year-over-Year Percent Change: Q4 @ -1.2%
-8.0% -8.0%
just 0.6 percent off its pre-recession peak. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Domestic demand is supporting growth in real

imports, which grew at an 8.9 percent pace in
Canadian Merchandise Trade Balance
the fourth quarter building on big gains in the Millions of Canadian Dollars, Seasonally Adjusted
prior quarter. Gross exports rose at a faster C$10,000 C$10,000
pace than imports, causing net exports to

C$8,000 C$8,000
contribute 1.3 percentage points to the overall
growth rate. C$6,000 C$6,000
The overnight rate in Canada has been at

0.25 percent since April of last year. While the C$4,000 C$4,000
Bank of Canada (BoC) has reiterated its intent

to leave the target rate unchanged through the C$2,000 C$2,000
second quarter of 2010, recent strength in the

C$0 C$0
Canadian economy has many market-watchers
in Canada speculating that the Bank will act -C$2,000 -C$2,000
swiftly when that time comes. In the mean Merchandise Trade Balance: Dec @ -246M CAD
time, the core rate of inflation remains near the -C$4,000 -C$4,000
bottom of BoC’s target range of 1 to 3 percent, 1997 1999 2001 2003 2005 2007 2009
giving them cover to keep rates low for now.

Canadian Consumer Price Index
5.0% 5.0%
"Headline": Jan @ 1.9%
Central Bank Policy Rates "Core": Jan @ 1.3%
4.0% 4.0%
8.0% 8.0%
US Federal Reserve: Mar @ 0.25%
7.0% Bank of Canada: Mar @ 0.25% 7.0% 3.0% 3.0%
6.0% 6.0%
2.0% 2.0%
5.0% 5.0%
1.0% 1.0%
4.0% 4.0%
3.0% 3.0% 0.0% 0.0%
2.0% 2.0%
-1.0% -1.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1.0% 1.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Wells Fargo Securities, LLC
9
Norwegian Real GDP

Norway 16.0%
16.0%
Compound Annual Growth Rate: Q4 @ 0.4%
Norway experienced a mild recession in

12.0%
Year-over-Year Percent Change: Q4 @ -1.2%
12.0%
2008/2009, but real GDP growth has returned
to positive territory recently. Recent monthly
8.0% 8.0%
indicators, including the manufacturing PMI
and industrial production data, suggest that
the Norwegian economy has continued to 4.0% 4.0%
expand at a modest pace in the first quarter.

The weak growth rate that the economy
0.0% 0.0%
registered in the fourth quarter understates, at

-4.0% -4.0%
least to some extent, the overall state of the
economy at present. Real consumer spending
-8.0% -8.0%
rose in excess of 5 percent in the fourth 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
quarter. Not only has the labor market
remained relatively supported, but the rise in
the price of oil, which is one of the country’s Volume of Norwegian Retail Sales
main exports, has helped to lift real income. 10% 10%
The overall GDP growth rate was depressed by

the 11 percent increase in gross imports, which 8% 8%
reflects solid growth in domestic demand.
The overall rate of CPI inflation has rebounded 6% 6%
to 2.5 percent, a bit above the core rate of

2.3 percent. Although inflation is not a 4% 4%
problem at present in Norway, the core rate
could begin to trend higher in the months 2% 2%
ahead if growth strengthens.
Norges Bank, the country’s central bank, has 0% 0%
raised its main policy rate from 1.25 percent 3-Month Moving Average: Jan @ 3.1%
last October to 1.75 percent at present. -2% -2%
Although the Bank kept rates unchanged at its 2001 2003 2005 2007 2009
last policy meeting in early February, most

investors look for more rate hikes in the Norwegian Industrial Production Index
months ahead. 20%
20%
Norwegian Consumer Price Index 15% 15%

6% 6%
10% 10%
5% 5%
4% 4% 0% 0%
-5% -5%
-10% -10%
2% 2%
-15% -15%
-20% IPI: Jan @ 5.2% -20%

0% 0% 3-Month Moving Average: Jan @ 4.8%
-25% -25%
1997 1999 2001 2003 2005 2007 2009
CPI: Jan @ 2.5%

-2% -2% Source: Bloomberg LP, IHS Global Insight and
10
Singapore Real GDP

Singapore 15.0%
15.0%
Singapore’s fourth quarter GDP was revised up

10.0% 10.0%
to a 2.8 percent decline on a seasonally
adjusted annualized rate, leaving the year-
5.0% 5.0%
over-year increase a much stronger 4.0
percent. The fourth quarter decline is seen as
only a pause in a somewhat stronger recovery 0.0% 0.0%
trend. The government revised up its

projection for 2010 GDP growth to a range of -5.0% -5.0%
4.5 percent to 6.5 percent based on the

stronger data. Private consumption and -10.0% -10.0%
investment are bouncing back to pre-crisis Year-over-Year Percent Change: Q4 @ 4.0%

growth rates as manufacturing and exports -15.0% -15.0%
accelerate. In the fourth quarter, services and 2000 2002 2004 2006 2008
agricultural sectors appeared to join the

expansion. Singaporean Industrial Production Index
Singapore’s manufacturing expansion 20.0%
Manufacturing Production, Year-over-Year Percent Change
20.0%
continues. February’s PMI edged up to 51.9

15.0% 15.0%
from 51.4 in January. Singapore’s PMI has
been in expansion territory for ten consecutive 10.0% 10.0%
months now. January industrial production 5.0% 5.0%

figures confirmed the trend, rising 11.8 percent
from December levels and jumping 39.4 0.0% 0.0%
percent from year-ago levels. -5.0% -5.0%
Labor market conditions are on the mend as -10.0% -10.0%

well. Singapore added 38,700 jobs in the
fourth quarter with the unemployment rate -15.0% -15.0%
falling to 2.1 percent, the lowest rate in seven -20.0% -20.0%

quarters. 6-Month Moving Average: Jan @ 8.9%
-25.0% -25.0%
Singapore has exited deflation, at least for one 1997 1999 2001 2003 2005 2007 2009
month. January CPI rose 0.4 percent, leaving

consumer prices up 0.2 percent from a year Singapore Unemployment Rate
ago, after eight straight months of deflation. 6.0%
Seasonally Adjusted
6.0%
Unemployment rate: Q4 @ 2.1%
Singapore Consumer Price Index
8.0% 8.0% 5.0% 5.0%
CPI: Jan @ 0.2%
7.0% 7.0%
6.0% 6.0% 4.0% 4.0%
5.0% 5.0%
4.0% 4.0% 3.0% 3.0%
3.0% 3.0%
2.0% 2.0% 2.0% 2.0%
1.0% 1.0%
0.0% 0.0% 1.0% 1.0%

1999 2001 2003 2005 2007 2009
-1.0% -1.0%

11
South Korean Real GDP

South Korea 20%
20%
South Korea’s expansion lost some significant 15% 15%
momentum in the fourth quarter, leaving 10% 10%

much uncertainty around the growth outlook
5% 5%
for 2010. The fourth quarter GDP estimate
rose a modest 0.7 percent at an annualized 0% 0%
rate, though year-over-year GDP still advanced -5% -5%

6.0 percent when many other countries in the
region saw year-over-year declines. -10% -10%
South Korea’s industrial production in January -15% -15%
was flat compared to December, and consumer -20%

-20%
confidence has not increased since October. Year-over-Year Percent Change: Q4 @ 6.3%
-25% -25%
The worsening job market continues to weigh 2001 2002 2003 2004 2005 2006 2007 2008 2009
on consumers’ willingness and ability to spend.
South Korea’s unemployment rate
South Korean Industrial Production Index
unexpectedly spiked to 4.8 percent in January Year-over-Year Percent Change
from 3.6 percent in December. The 40% 40%
unemployment rate is now at an 11-year high.

30% 30%
The government’s leading economic indicators
also point to a continued moderation in 20% 20%
growth, especially in the second half of 2010.

Six out of the 10 components in this measure 10% 10%
are now contracting. The fact that China,

South Korea’s largest trading partner, is also 0% 0%
tightening loan growth, puts even more

-10% -10%
downside risk into the outlook.
The consensus is still expecting some interest -20%
IPI: Jan @ 31.0%
-20%
rate hikes from the Bank of Korea in 2010, but 3-Month Moving Average: Jan @ 27.9%
more than 50 basis points in hikes seems -30% -30%
1997 1999 2001 2003 2005 2007 2009
unlikely in this environment, especially
considering household debt, as a share of
disposable income remains at 144 percent. South Korean Unemployment Rate
Percent and 12-Month Moving Average
5.0% 5.0%
South Korean Rates

3-M Bill, 10-Yr Government Bond
7.0% 7.0% 4.5% 4.5%
6.0% 6.0%
4.0% 4.0%
5.0% 5.0%
3.5% 3.5%
4.0% 4.0%
3.0% 3.0%
3.0% 3.0% Unemployment Rate: Jan @ 4.8%
2.5% 2.5%
2.0% 2.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
3-Month Government: Mar @ 2.18%
South Korean 10-Yr Government: Mar @ 5.21%
12
Swedish Real GDP

Sweden 10%
10%
Although growth has returned to most other

5% 5%
areas of the world, the Swedish economy
continues to contract. Relative to its peak in
0% 0%
early 2008, real GDP has declined nearly
7 percent. However, the rise in the
manufacturing PMI recently suggests that real -5% -5%
GDP growth may have turned positive in the

first quarter. -10% -10%
About 60 percent of the country’s exports are

-15% -15%
destined for the European Union and another Compound Annual Growth: Q4 @ -2.2%
10 percent go to emerging Europe. Both Year-over-Year Percent Change: Q4 @ -1.5%
-20% -20%
regions have lagged the global upturn, which 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
has weighed on Swedish exports. Consumer
spending has posted modest gains over the
past few quarters, but investment spending Swedish Manufacturing PMI
continues to plunge at a double-digit pace. 70 70
Due to the rise in energy prices over the past 65 65

year the overall inflation rate returned to
positive territory in December, and it will likely 60 60
trend a bit higher in the months ahead. That

55 55
said, a major inflationary outbreak in Sweden
does not seem likely due to the weakness in the 50 50
economy.

45 45
The Riksbank (the country’s central bank) cut
its main policy rate to only 0.25 percent last 40 40
summer, where it has subsequently been

35 35
maintained. However, the Riksbank recently Swedish Manufacturing PMI: Feb @ 61.5%
stated that because the recovery is now on 30 30
“firmer ground” it expects to begin raising its 2002 2003 2004 2005 2006 2007 2008 2009 2010
main policy rate sometime this summer or

autumn. Swedish Merchandise Trade Balance
Billions of Swedish Krona, Seasonally Adjusted
25 25
Merchandise Trade Balance: Jan @ 7.5B SEK
Swedish Consumer Price Index 12-Month Moving Average: Jan @ 7.3B SEK
5.0% 5.0% 20 20
CPI: Jan @ 0.6%
4.0% 4.0%
15 15
3.0% 3.0%
10 10
2.0% 2.0%
1.0% 1.0%
5 5
0.0% 0.0%
0 0
-1.0% -1.0% 1997 1999 2001 2003 2005 2007 2009

13
Swiss Real GDP

Switzerland 6.0%
6.0%
After experiencing a mild recession in late

4.0% 4.0%
2008/early 2009 in which real GDP contracted
2.4 percent, the Swiss economy is growing
2.0% 2.0%
again. Real GDP rose at a solid rate in the
second half of last year, and monthly
indicators, including the manufacturing PMI, 0.0% 0.0%
suggest that growth has remained positive in

the first quarter of 2010. -2.0% -2.0%
House prices in most parts of Switzerland did

-4.0% -4.0%
not get overly inflated during the past decade, Compound Annual Growth: Q4 @ 3.0%
so the economy is not suffering from the Year-over-Year Percent Change: Q4 @ 0.0%
-6.0% -6.0%
hangover of a burst housing bubble. Real 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
consumer spending has turned up over the
past few quarters, and investment spending
has also strengthened. Unless global economic Swiss Manufacturing PMI
Diffusion Index
activity lurches lower again, which we do not 70 70
expect, a self-sustaining expansion appears to

65 65
be taking hold in Switzerland.
CPI inflation has returned to positive territory 60 60
again as energy prices have rebounded. As

55 55
measured by the core rate of CPI inflation,
however, there are few inflationary pressures 50 50
in the economy at present. The core rate of
inflation is currently 0.6 percent, down a full 45 45
percentage point from late 2008. 40 40
The Swiss National Bank (SNB) has

35 35
maintained its target for Swiss franc LIBOR at Swiss Manufacturing PMI: Feb @ 57.4
the very low rate of only 0.25 percent since 30 30
March 2009. Given the recovery in the 1997 1999 2001 2003 2005 2007 2009
economy, however, most investors look for the

SNB to hike rates later this year. Swiss Retail Sales
8.0% 8.0%
Retail Sales: Dec @ 112.4%
Swiss Consumer Price Index 3-Month Moving Average: Dec @ 1.3%
3.5% 3.5% 6.0% 6.0%
CPI: Jan @ 1.0%
3.0% 3.0%
2.5% 2.5% 4.0% 4.0%
2.0% 2.0%
1.5% 1.5% 2.0% 2.0%
1.0% 1.0%
0.5% 0.5% 0.0% 0.0%
0.0% 0.0%
-0.5% -0.5% -2.0% -2.0%

2003 2004 2005 2006 2007 2008 2009 2010
-1.0% -1.0%

14
Taiwanese Real GDP

Taiwan 10.0%
10.0%
Taiwan’s economic recovery continued to build 7.5% 7.5%
momentum in the fourth quarter. GDP surged

5.0% 5.0%
at an 18 percent annualized pace and is now
9.2 percent higher than a year ago. The 2.5% 2.5%
rebound is being paced by large increases in
manufacturing and exports, as Taiwan deepens 0.0% 0.0%
trading relations with China and taps their

-2.5% -2.5%
outsized growth rate.
Taiwan’s industrial production jumped 69.7 -5.0% -5.0%
percent in January from a year ago, while

-7.5% -7.5%
January exports exploded, rising 71.8 percent Year-over-Year Percent Change: Q4 @ 9.2%
from last year. These increases partly reflect the -10.0% -10.0%
steep declines registered last year at the height 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
of the financial crisis and certainly are not

sustainable on a prolonged basis. Year-over- Taiwanese Industrial Production Index
year growth rates are expected to diminish as Year-over-Year Percent Change
80.0% 80.0%
2010 progresses and base effects fade.
Price deflation has rapidly retreated as growth 60.0% 60.0%
reasserts itself. In fact, CPI inflation increased
year over year to 2.35 percent in February. The 40.0% 40.0%
economy exited deflation after 11 consecutive
months. Core inflation, excluding volatile food 20.0% 20.0%
and energy categories, continues to moderate

however, falling to minus 1.1 percent. 0.0% 0.0%
Taiwan’s central bank cut rates seven times -20.0% -20.0%

during the crisis and has held rates steady since
February 2009. With core inflation pressures -40.0% -40.0%
still relatively low, the central bank will likely IPI: Jan @ 69.7%
not be hiking interest rates until perhaps mid- -60.0% -60.0%
year at the earliest. A strengthening Taiwanese 1997 1999 2001 2003 2005 2007 2009
dollar also reduces the pressure on the central

bank to hike interest rates to stabilize the Taiwanese Consumer Price Index
currency. 6.0%
6.0%
Taiwanese Rates
Overnight Rate, 10-Yr Government Bonds
6.00% 6.00% 4.0% 4.0%
5.00% 5.00%
2.0% 2.0%
4.00% 4.00%
0.0% 0.0%
3.00% 3.00%
-2.0% -2.0%
2.00% 2.00%
6-Month Moving Average: Feb @ -0.3%
CPI: Feb @ 2.4%
-4.0% -4.0%
1.00% 1.00% 1997 1999 2001 2003 2005 2007 2009
Overnight Rate: Mar @ 0.11%
Taiwan 10-Yr Government: Mar @ 3.96%
1999 2001 2003 2005 2007 2009 Wells Fargo Securities, LLC
15
Argentine Economic Activity Index

Argentina 15%
15%
After a tumultuous period for Martín Redrado, 10% 10%
the president of the central bank, he was finally

5% 5%
fired from the institution and a more
government-friendly successor was appointed 0% 0%
by the Fernández-Kirchner administration.
The new president of the central bank is Ms. -5% -5%
Mercedes Maró del Pont. -10% -10%
The Argentine government has started to

-15% -15%
recognize a higher rate of inflation, even
though the opposition and private analysts are -20% -20%
still claiming that the real rate of inflation is at Economic Activity: Dec @ 5.0%
-25% -25%
least twice as much as the official rate. The 1997 1999 2001 2003 2005 2007 2009
INDEC, the country’s statistical office, reported
that consumer prices increased by 1.0 percent
in January with a 12-month rate of Argentine Consumer Price Index
8.24 percent. 14% 14%
Private analysts are following labor union

12% 12%
salary negotiations because these unions are
asking for up to 25 percent salary increases. 10% 10%
Labor unions are pro-government institutions,
and thus acceptance of those salary increases 8% 8%
would tend to confirm analysts’ arguments that
inflation is at least twice as much as the official 6% 6%
reported rate.
Argentine exports increased by 18.6 percent in
4% 4%
January compared to the same month a year 2% 2%

earlier, while imports rose by 16.2 percent.
Consumer Price Index: Jan @ 8.2%
The January trade balance was $1.22 billion, 0% 0%
taking the 12-month trade surplus to $17.23 2004 2005 2006 2007 2008 2009 2010
billion. However, trade is still well below pre-

crisis levels. Argentine Exchange Rate
BRL per USD
4.00 4.00
ARS per USD: Mar @ 3.857
Argentine Merchandise Trade Balance
Millions of USD, Not Seasonally Adjusted 3.75 3.75
$3,000 $3,000
3.50 3.50
$2,000 $2,000
3.25 3.25
$1,000 $1,000
3.00 3.00
$0 $0
2.75 2.75
-$1,000 -$1,000 2.50 2.50

03 04 04 05 06 07 08 09
Merchandise Trade Balance: Jan @ $1,217

-$2,000 -$2,000 Source: Bloomberg LP, IHS Global Insight and
16
Brazilian Real GDP

Brazil 12%
12%
As we were expecting, Brazilian inflation rates 9% 9%
have started to accelerate, and the central bank 6% 6%

will have to start increasing interest rates very
3% 3%
soon if they do not want to face resetting
inflation expectations in the coming quarters. 0% 0%
This is even more imperative during 2010 -3% -3%

considering that 2010 is a presidential election
year and such years have been characterized, in -6% -6%
the past, by changing inflation expectations. -9% -9%
Consumer prices increased by 0.78 percent in -12% Compound Annual Growth: Q3 @ 5.1% -12%
February after posting a 0.75 percent increase Year-over-Year Percent Change: Q3 @ -1.5%
-15% -15%
during the first month of the year. The year- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
earlier rate stood at 4.83 percent in February,
up from a 4.59 percent rate in January.
Meanwhile, while the year-over-year wholesale Brazilian Retail Sales
rate was still in deflationary territory in 12% 12%
February (-1.19 percent), it was up strongly,

1.38 percent, on a month-over-month basis
8% 8%
and could start threatening consumer inflation
in the coming months.
Brazilian exports surged by 27.2 percent in 4% 4%
February compared to the same month a year

earlier, while imports skyrocketed by 50.9 0% 0%
percent during the same period. The trade
deficit was $394 million in February, up from a
$166 million deficit in January. While the -4% -4%
country has benefited considerably by a strong Retail Sales: Dec @ 9.1%

rebound in the price of petroleum, the main 6-Month Moving Average: Dec @ 7.0%
-8% -8%
difference compared to last year’s commodity 2001 2002 2003 2004 2005 2006 2007 2008 2009
export performance was due to a large increase
in overall production of commodities.
Brazilian Merchandise Trade Balance
Millions of USD, Not Seasonally Adjusted
$6,000 $6,000
Brazilian Exchange Rate $5,000 $5,000

BRL per USD
4.00 4.00
BRL per USD: Mar @ 1.778 $4,000 $4,000
3.50 3.50 $3,000 $3,000
$2,000 $2,000
3.00 3.00
$1,000 $1,000
2.50 2.50
$0 $0
2.00 2.00 -$1,000 -$1,000

Merchandise Trade Balance: Jan @ $-166
-$2,000 -$2,000
1.50 1.50 1997 1999 2001 2003 2005 2007 2009
1.00 1.00 Source: Bloomberg LP, IHS Global Insight and

99 00 01 02 03 04 05 06 07 08 09 10 Wells Fargo Securities, LLC
17
Chilean Real GDP

Chile 12%
12%
While early indicators on the country’s 9% 9%
productive capacity tend to indicate that GDP 6% 6%

will be negatively affected during the first and
3% 3%
second quarter of the year, the reconstruction
effort will bump GDP growth up during the 0% 0%
second half of the year. Early estimates on the -3% -3%

cost of the earthquake are approaching $30
billion, or about 19 percent of GDP. -6% -6%
We expect the Chilean economy to grow by 2.7 -9% -9%
percent during 2010, down from our previous -12% Compound Annual Growth: Q3 @ 4.6% -12%
forecast of 4.4 percent before the earthquake. Year-over-Year Percent Change: Q3 @ -2.0%
-15% -15%
We estimate the largest impact on GDP to be 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
allocated to the second quarter of the year and
then envision relatively strong growth during
the third and fourth quarter of the year. While Chilean Consumer Price Index
inflation may be an issue for the central bank 12% 12%
due to scarcity of products across the economy, CPI: Jan @ 0.8%
we should expect central bank policy to remain

accommodative for the first three quarters of 8% 8%
the year.
Chile’s currency experienced high volatility
going into late last year and during the first 4% 4%
two months of this year. This volatility was
exacerbated following the massive earthquake
that struck the country in late February. While 0% 0%
the earthquake hurt the currency at first, the
peso seems to have regained its composure and
has been on a strengthening path during the
-4% -4%
early part of March. 1997 1999 2001 2003 2005 2007 2009
Chilean Economic Activity Index

10% 10%
Chilean Exchange Rate 8% 8%

BRL per USD
800 800
CLP per USD: Mar @ 512.500 6% 6%
4% 4%
700 700
2% 2%
0% 0%
600 600
-2% -2%
-4% -4%
Economic Activity: Dec @ 3.9%
500 500
-6% -6%
2004 2005 2006 2007 2008 2009
400 400 Source: Bloomberg LP, IHS Global Insight and

99 00 01 02 03 04 05 06 07 08 09 10 Wells Fargo Securities, LLC
18
Chinese Real GDP

China 14.0%
14.0%
After slowing significantly in early 2009, real 12.0% 12.0%

GDP growth in China has rebounded sharply in
recent quarters. Because Chinese banks were 10.0% 10.0%
not overly leveraged, the government directed

them to increase lending aggressively. In 8.0% 8.0%
addition, the government stimulated the

6.0% 6.0%
economy via acceleration of planned
infrastructure spending. 4.0% 4.0%
Growth in domestic demand has been solid.

The value of retail sales is currently growing 2.0% 2.0%
nearly 18 percent on a year-over-year basis, Year-over-Year Percent Change: Q4 @ 10.7%

0.0% 0.0%
and export growth also rebounded in the 2000 2002 2004 2006 2008
second half of last year.
Now that the economy is firmly back on track,
Chinese Manufacturing PMI
the government is directing banks to slow Seasonally Adjusted
down the pace of credit creation before 60 60
inflation becomes an issue. Most indicators

point in the direction of continued strong 55 55
growth in the first quarter but, as the recent
decline in the manufacturing PMI suggests, the
pace of growth may slow somewhat going 50 50
forward.
Will Chinese authorities tighten too much? 45 45
Probably not, because inflation largely remains
benign. The overall rate of CPI inflation is very
40 40
low at present—only 1.5 percent in January—
and the core rate of inflation is barely above Chinese Manufacturing PMI: Feb @ 52.0
zero percent at present. Although economic 35 35
policies will become less accommodative in the 2005 2006 2007 2008 2009 2010
months ahead, there is no reason for Chinese

authorities to slam on the brakes. Chinese Loan Growth
35% 35%
Chinese CPI Inflation

Year-over-Year Percent Change 30% 30%
10% 10%
Overall CPI: Jan @ 1.5%
Non-food CPI: Jan @ 0.4% 25% 25%
8% 8%
20% 20%
6% 6%
15% 15%
4% 4%
10% 10%
2% 2%
5% 5%
0% 0%
Chinese Loan Growth: Jan @ 29.3%
0% 0%
-2% -2% 99 01 03 05 07 09

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Wells Fargo Securities, LLC
19
Indian Real GDP

India 12%
12%
Real GDP growth in the Indian economy has

fluctuated over the past year or so. After
9% 9%
slowing in the wake of the global recession,
growth bounced back up in mid-2009.
However, overall GDP growth weakened again
in the fourth quarter as agricultural output, 6% 6%
which accounts for nearly 20 percent of Indian

GDP, fell because of the effects of last year’s
drier-than-normal monsoon. 3% 3%
Despite the fluctuations in the overall rate of

GDP growth, the underlying state of the Indian Year-over-Year Percent Change: Q3 @ 6.0%
0% 0%
economy remains relatively strong at present. 2004 2005 2006 2007 2008 2009
Growth in industrial production rebounded
strongly last year, and recent monthly
indicators suggest that growth remained solid Indian Industrial Production Index
in the first quarter. For example, the 15.0% 15.0%
manufacturing PMI remained well above “50” 3-Month Moving Average: Dec @ 12.9%
in January and February. 12.5% 12.5%
Strong growth in automobile sales shows that

consumer spending generally remains solid. In 10.0% 10.0%
addition, exports have accelerated with the

year-over-year growth rate in the value of 7.5% 7.5%
Indian exports growing at a double-digit pace
at present. 5.0% 5.0%
Wholesale price inflation, which is the

benchmark inflation gauge in India, has shot 2.5% 2.5%
up over the past few months. With recovery
taking hold and inflation starting to trend 0.0% 0.0%
higher, the RBI will probably start to take back 1997 1999 2001 2003 2005 2007 2009
some of its previous rate cuts in the near term.

Indian Wholesale Price Inflation
14% 14%
Wholesale Price Inflation: Jan @ 8.6%
Indian Real GDP 12% 12%
12% 20%
10% 10%
9% 15%
8% 8%
6% 10%
6% 6%
3% 5%
4% 4%
0% 0%
2% 2%
-3% -5%
0% 0%
-6% -10%
-2% -2%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-9% Overall GDP: Q4 @ 6.0% (Left Axis) -15%
Agricultural Output: Q4 @ -2.8% (Right Axis)
2000 2002 2004 2006 2008 Wells Fargo Securities, LLC
20
Mexican Real GDP

Mexico 8.0%
8.0%
The Mexican economy is starting to show signs 6.0% 6.0%
of life after the worst crisis in more than forty 4.0% 4.0%
years. According to the INEGI, the country’s 2.0% 2.0%

statistical institute, the Mexican economy 0.0% 0.0%
contracted by 2.3 percent during the fourth
quarter of 2009 compared to the same period a -2.0% -2.0%
year earlier, leaving the full year with a drop of -4.0% -4.0%
6.5 percent. However, the Mexican economy -6.0% -6.0%

ended on an up-note, growing 2.0 percent
-8.0% -8.0%
during the last quarter of the year compared to
the previous quarter on a seasonally adjusted -10.0%
-10.0%
basis. -12.0% -12.0%

2004 2005 2006 2007 2008 2009
Quickening inflation will likely become a new
threat to this year’s economic recovery.
January’s 1.1 percent month-over-month Industrial Production Indices
increase in the consumer price index was 10% 10%
unexpected and unwelcomed as the central

bank tries to give continuity to last year’s
5% 5%
expansionary monetary policy. However, if
this trend continues, the central bank will have
to move fast if it wants to avoid a resetting of 0% 0%
inflation expectations.
On the positive side, the Mexican peso has -5% -5%
strengthened considerably during the first
months of the year, and this could contribute
to lower price pressure in coming months. -10% -10%
While the Mexican trade sector improved Mexico, 3-Month Moving Average: Dec @ -1.8%
U.S.: Jan @ 0.9%
considerably in January with exports -15% -15%
increasing by 26.7 percent year over year, the 1999 2001 2003 2005 2007 2009
strength of this recovery has left a bitter flavor,

as many were expecting an even larger surge in Mexican Consumer Price Index
exports. 12%
12%
Mexican Exchange Rate

MXN per USD
16.00 16.00 10% 10%
MXN per USD: Mar @ 12.66
15.00 15.00
8% 8%
14.00 14.00
13.00 13.00
6% 6%
12.00 12.00
4% 4%
11.00 11.00
CPI: Jan @ 4.5%

10.00 10.00
2% 2%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
9.00 9.00
8.00 8.00 Source: Bloomberg LP, IHS Global Insight and

21
Polish Real GDP

Poland 9.0%
9.0%
Year-over-Year Percent Change: Q4 @ 3.1%
Poland’s economy grew 1.2 percent in the
fourth quarter of 2009 from the previous
quarter, and 3.1 percent from the same quarter
6.0% 6.0%
a year ago. Trade led the way, contributing 2.2
percentage points to the annual growth rate.
Inventory replenishment also supported
growth. Private consumption growth slowed
during the quarter. Meanwhile, gross fixed 3.0% 3.0%
investment was unchanged from the previous

quarter, but was up 1.6 percent year over year.
For all of 2009 real GDP rose 1.7 percent,
meaning Poland was the only European Union 0.0% 0.0%
member to avoid recession during the global 1995 1997 1999 2001 2003 2005 2007 2009
economic crisis—a remarkable achievement.

Stimulus packages in many Western European Polish Industrial Production Index
markets, along with the lagged effects of the 20% 20%
zloty’s depreciation during the crisis, have IPI: Jan @ 8.5%

15% 15%
fueled robust export growth. This, in turn, has
supported a rebound in industrial production. 10% 10%
However, recent year-over-year industrial
production growth rates are also benefiting 5% 5%
from a very low base of comparison. Looking

0% 0%
ahead, fading European stimulus and the
lagged effects of the zloty’s appreciation during -5% -5%
2009 could dampen export growth.
-10% -10%
Inflation has accelerated over the past few
months. However, the expected slowdown in -15% -15%
exports, rising unemployment, slowing wage

-20% -20%
growth, the stronger zloty and more favorable Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010
bases of comparison for prices will allow the
central bank to hold off on raising short term
Polish Merchandise Trade Balance
interest rates for several more months. Millions of Polish Zloty, Not Seasonally Adjusted
$0 $0
Polish Consumer Price Index -$1,000 -$1,000

12.0% 12.0% -$2,000 -$2,000
CPI: Jan @ 3.6%
-$3,000 -$3,000
10.0% 10.0% -$4,000 -$4,000
-$5,000 -$5,000
8.0% 8.0% -$6,000 -$6,000
-$7,000 -$7,000
6.0% 6.0%
-$8,000 -$8,000
-$9,000 -$9,000
4.0% 4.0%
-$10,000 -$10,000
Merchandise Trade Balance: Dec @ -$4,484 M
-$11,000 -$11,000
2.0% 2.0% 1997 1999 2001 2003 2005 2007 2009

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Wells Fargo Securities, LLC
22
Russian Real GDP

Russia 10%
10%
Russian real GDP was down 8.9 percent year

8% 8%
6% 6%
0ver year in the third quarter of 2009, an
improvement over the 10.9 percent drop in Q2. 4% 4%
Strong export growth and improving retail 2% 2%
sales suggests growth improved further in the 0% 0%

fourth quarter. In February the government -2% -2%
released a preliminary estimate of a 7.9 percent -4% -4%
decline in real GDP for all of 2009.
-6% -6%
Exports were up 20.1 percent from a year ago -8% -8%
in December, a vast improvement over the 22.3
-10% -10%
percent decline seen just two months prior. A Year-over-Year Percent Change: Q3 @ -8.9%
-12% -12%
recovering global economy has spurred 2001 2002 2003 2004 2005 2006 2007 2008 2009
demand for oil, natural gas and metals, which
together comprise nearly 75 percent of Russia’s
exports. Imports have also improved, but not Russian Merchandise Trade Balance
Billions of USD, Seasonally Adjusted
as much as exports. This has led to a trade $20 $20
surplus nearly triple that of a year ago, helping $18

Merchandise Trade Balance: Dec @ $12.7B
$18
to bolster economic growth.
$16 $16
Retail sales have improved quickly over the
$14 $14
past few months, rising 7.9 percent in January
from a year earlier, a marked improvement $12 $12
over the 0.9 percent decline seen in $10 $10

September. Demand has improved as real wage $8 $8
growth has finally turned positive, while
personal disposable income growth is trending $6 $6
higher. However, a jump in the unemployment $4 $4
rate in January to 9.2 percent, along with tight $2 $2

credit conditions, will likely keep consumers’
$0 $0
contribution to economic growth limited. 1999 2001 2003 2005 2007 2009
Annual inflation slowed further in February to

7.2 percent. Thus, further interest rate cuts Russian Retail Sales
could follow February’s 25 basis point cuts. 120%
120%
Retail Sales: Jan @ 7.9%
Russian Unemployment Rate
Percent of Labor Force 100% 100%
15.5% 15.5%
Unemployment Rate: Jan @ 9.2%
80% 80%
14.0% 14.0%
60% 60%
12.5% 12.5%
40% 40%
11.0% 11.0%
20% 20%
9.5% 9.5%
0% 0%
8.0% 8.0%
-20% -20%
6.5% 6.5% 1997 1999 2001 2003 2005 2007 2009

23
South African Real GDP

South Africa 8.0%
8.0%
For the full-year 2009, the South African 6.0% 6.0%
economy contracted 1.8 percent. But like

4.0% 4.0%
many foreign economies it ended the year on
an up-note rising at a 3.2 percent annualized 2.0% 2.0%
pace in the fourth quarter.
0.0% 0.0%
Manufacturing grew at a 10.1 percent pace in
the fourth quarter, thanks in part to an -2.0% -2.0%
increase in export activity as the broader global

-4.0% -4.0%
recovery helped support foreign demand for
manufactured goods from South Africa. -6.0% Compound Annual Growth: Q4 @ 3.2% -6.0%
Despite the strength in exports, other parts of -8.0%

-8.0%
the economy remain rather weak, most notably 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
in the consumer sector. Indeed, retail trade

weighed on fourth quarter GDP growth. Year-
South African Merchandise Trade Balance
over-year retail sales numbers have been in Billions of Rand, Not Seasonally Adjusted
negative territory since February of 2009. 10,000 10,000
The South African Reserve Bank is stuck

5,000 5,000
between a rock and a hard place. The inflation
rate is back above the central bank’s 3 percent
0 0
to 6 percent target band for a second month in
January. But with the pick-up in economic
activity just starting to take shape, this is no -5,000 -5,000
time to throw a wet blanket on the budding

recovery. Recognizing the challenge facing the -10,000 -10,000
central bank, South Africa’s Finance Minister

sent a letter to Central Bank Governor Marcus -15,000 -15,000
in February encouraging him to be “flexible” Merchandise Trade Balance: Jan @ -33,310.4
and that “temporary deviations" of inflation -20,000 -20,000
from the target rate are acceptable. We expect 1997 1999 2001 2003 2005 2007 2009
the Reserve Bank to exercise its flexible

mandate and leave the repurchase rate Real South African Retail Sales
unchanged at 7 percent for some time. 15%
15%
South African Consumer Price Index 12% 12%

15% 15%
CPI: Jan @ 6.2% 9% 9%
6% 6%
12% 12%
3% 3%
9% 9%
0% 0%
-3% -3%
6% 6%
-6% -6%
Wholesale & Retail Sales: Dec @ -3.7%
3% 3% -9% -9%
2003 2004 2005 2006 2007 2008 2009
0% 0% Source: Bloomberg LP, IHS Global Insight and

2003 2005 2007 2009 Wells Fargo Securities, LLC
24
Turkish Real GDP

Turkey 12.5%
Year-over-Year Percentage Change
12.5%
The year-over-year contraction in Turkish GDP

10.0% 10.0%
7.5% 7.5%
slowed to just 3.3 percent in the third quarter
of 2009. Inventory replenishment and 5.0% 5.0%
government spending provided a boost, while 2.5% 2.5%
trade contributed as export declines slowed. 0.0% 0.0%

Recent data suggests the economy continued to -2.5% -2.5%
improve in the fourth quarter, for which GDP -5.0% -5.0%
data is not yet available.
-7.5% -7.5%
Industrial production was up 12.1 percent in -10.0% -10.0%
January from a year ago after surging 25.2
-12.5% -12.5%
percent in December, which was the biggest Year-over-Year Percent Change: Q3 @ -3.3%
-15.0% -15.0%
increase in over four years. The recent large 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
increases are being driven in part by a low base
of comparison as production losses were heavy
around the same time a year earlier. Turkish Industrial Production Index
With the increase in production, has come an 25.0% 25.0%
increase in imports of intermediate goods used 20.0% 20.0%
in production of goods for export. This, along 15.0% 15.0%

with improved domestic demand, has led to a
10.0% 10.0%
re-widening of the trade deficit, which nearly
tripled in January from a year earlier. Strong 5.0% 5.0%
export growth has helped the economy recover, 0.0% 0.0%

but looking ahead, weakness in Europe and the -5.0% -5.0%
lagged effects of the lira’s recent appreciation
could dampen exports as the year progresses. -10.0% -10.0%
Inflation is starting to rear its ugly head once -15.0% -15.0%
again, rising 10.1 percent year over year in -20.0% IPI: Jan @ 12.1% -20.0%
February. Very low levels of comparison during -25.0% -25.0%
the crisis and higher taxes are factoring into 1997 1999 2001 2003 2005 2007 2009
the rebound. This has led the central bank to

halt its rate easing cycle, and rates could start Turkish Merchandise Trade Balance
to rise later this year should inflation persist. $0
Millions of USD, Not Seasonally Adjusted
$0
Turkish Consumer Price Index -$1,000 -$1,000

120.0% 120.0%
-$2,000 -$2,000
-$3,000 -$3,000
100.0% 100.0%
-$4,000 -$4,000
80.0% 80.0%
-$5,000 -$5,000
-$6,000 -$6,000
60.0% 60.0%
-$7,000 -$7,000
40.0% 40.0%
-$8,000 -$8,000
Merchandise Trade Balance: Jan @ -3,640.0 USD
-$9,000 -$9,000
20.0% 20.0% 1997 1999 2001 2003 2005 2007 2009
CPI: Feb @ 10.1%

25
U.S. Trade Weighted Dollar Major Index

Dollar Exchange Rates 115
March 1973=100
115
The weighted-average value of the dollar 110 110
trended lower throughout most of 2009 as the 105 105
recovery in the global economy caused the 100 100

greenback to lose its safe-haven appeal. 95 95
However, the dollar has gotten off to a strong
start in 2010, especially against the euro and 90 90
other European currencies. 85 85
The appreciation of the dollar versus the euro 80 80
this year reflects, at least in part, some investor 75 75

nervousness regarding the Greek debt 70 70
situation. However, U.S. economic data Major Currency Index: Feb @ 76.0
65 65
generally have been stronger than expected 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
this year whereas data from the eurozone have
largely been disappointing.
Euro-zone Exchange Rate
The U.S current account deficit has narrowed USD per EUR
considerably over the past few years, which 1.70 1.70
exerts fewer headwinds on the dollar. At the 1.60 1.60

same time, net capital inflows into the United
1.50 1.50
States have strengthened over the past few
months, which have also helped boost the 1.40 1.40
greenback. 1.30 1.30
Wells Fargo projects the dollar will appreciate

1.20 1.20
modestly over the next few quarters versus
most major currencies, as the U.S. economic 1.10 1.10
recovery continues to prompt foreign buying of 1.00 1.00

higher yielding U.S. assets. However,
“commodity” and emerging market currencies 0.90 0.90
USD per EUR: Mar @ 1.360
will likely appreciate further on a trend basis as 0.80 0.80
commodity prices continue to grind higher and 1999 2001 2003 2005 2007 2009
as increasing levels of risk tolerance causes

capital to flow to those countries. Monthly Net Securities Purchases
Billions of Dollars
$160 $160
Current Account Deficit

Quarterly in Billions of Dollars, Seasonally Adjusted $120 $120
$40 $40
$80 $80
$0 $0
$40 $40
-$40 -$40
$0 $0
-$80 -$80
-$40 -$40
-$120 -$120
-$80 -$80
Net Securities Purchases: Dec @ $63 Billion
-$160 -$160
3-Month Moving Average: Dec @ $70 Billion
-$120 -$120
-$200 -$200 2004 2005 2006 2007 2008 2009
Balance on Current Account: Q3 @ $-108.0 B

-$240 -$240 Source: Bloomberg LP, Federal Reserve Board, IHS Global Insight,
92 94 96 98 00 02 04 06 08 Intl. Monetary Fund and Wells Fargo Securities, LLC
26
Crude Oil
Energy $160
NYMEX Front-Month Contract, Dollars per Barrel
$160
After collapsing from their all-time high in $140 $140
July 2008, oil prices have trended higher since

$120 $120
early 2009. The recent upturn in global
economic activity is helping spur a modest $100 $100
recovery in petroleum demand. More recently,
colder-than-usual weather in North America $80 $80
has helped boost demand. $60 $60
Global supply has declined a bit, which is also

$40 $40
helping support prices. The combination of
slightly higher demand and the marginal $20 $20
reduction in supply has caused stocks of Crude Oil: Mar @ $81.50
$0 $0
petroleum products to drop. Indeed, excess 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
stocks of crude have been pared back
significantly over the past few months, and
inventories are currently at year-ago levels. Crude Oil Inventory
Distillate inventories, which rose significantly 25% 25%
in the second half of last year, have retreated

20% 20%
somewhat as well. Stocks of gasoline have
started to rise in recent weeks in advance of the 15% 15%
summer driving season. 10% 10%
We project that oil prices will grind slowly 5% 5%

higher in the quarters ahead. Oil demand
should rise further as the global economy 0% 0%
continues to recover. -5% -5%
Natural gas prices trended lower throughout -10% -10%

most of 2009 due to weak demand and
excessive inventories. However, colder-than- -15% -15%
Oil Inventory: Feb @ -2.6%
normal weather has caused gas in storage to -20% -20%
return to year-ago levels over the past few 2005 2006 2007 2008 2009 2010
weeks. Assuming that the U.S. economic

recovery remains intact, gas prices should Natural Gas
slowly trend higher over the course of the year. $16
Henry Hub Spot, Dollars per MMBTU
$16
Natural Gas Storage $14 $14

45% 45%
$12 $12
$10 $10
30% 30%
$8 $8
15% 15%
$6 $6
$4 $4
0% 0%
$2 $2
Natural Gas: Mar @ $4.75
-15% -15% $0 $0
2005 2006 2007 2008 2009 2010
Natural Gas Storage: Feb @ -2.2%

27
28
March 11, 2010
Wells Fargo Internationa l Economic Forecast Wells Fa rgo Bank Currency Strategy Group Forecast
(Y ear -ove r-Y ear Pe rcent C hange) (End of Quart er Rates)
GDP CPI 201 0 2011
2009 2010 2011 2009 2010 201 1 Q2 Q3 Q4 Q1 Q2 Q3
Global Chartbook: March 2010
Global (PPP weig hts) - 0.8% 4.1% 4 .1% 2.8 % 4.2% 4.2% Ma jor Currenc ie s
Global (Market Exc hange Rates) - 2.0% 2.9% 2 .9% n/a n/a n/a Euro ($/€) 1.34 1.30 1.28 1.25 1.23 1.23
U.K. ($/£) 1.50 1.48 1.45 1.43 1.40 1.40
1
Advanc ed Ec onomies - 3.3% 2.4% 2 .5% -0.3 % 1.5% 1.7% U.K. (£/€) 0.89 0.88 0.88 0.88 0.88 0.88
Unit ed St ates - 2.4% 2.9% 2 .5% -0.3 % 2.1% 2.1% Japan (¥/$) 92 95 98 100 102 105
Eurozone - 4.0% 1.3% 2 .2% 0.3 % 1.1% 1.3% Canada (C$ /US$) 1.02 1.04 1.07 1.10 1.11 1.12
Unit ed Kingdom - 5.0% 1.5% 2 .2% 2.2 % 2.8% 1.9% Swit zerland (CHF/$) 1.09 1.12 1.15 1.18 1.22 1.22
Japan - 5.1% 2.6% 1 .7% -1.3 % -0.8% 0.4%
Korea 0.1% 5.0% 3 .5% 2.8 % 2.6% 2.7% Ot her Currencies
Canada - 2.5% 2.3% 2 .8% 0.3 % 1.9% 1.9% Aust ralia (US$ /A$) 0.94 0.94 0.92 0.90 0.88 0.87
China (CNY /$) 6.82 6.80 6.70 6.60 6.50 6.40
1
Developing Economies 2.3% 6.1% 5 .9% 6.5 % 7.3% 7.3% Sout h Korea ($/KRW) 1100 1075 1050 1050 1025 1050
China 8.5% 9.4% 9 .0% -0.7 % 2.4% 3.3% Singapo re ($/SGD) 1.40 1.39 1.41 1.42 1.43 1.45
India 6.8% 8.0% 7 .8% 11.4 % 12.2% 8.0% T aiwan ($ /T W D) 3 1.75 3 1.75 3 1.50 3 1.50 3 1.25 3 1.25
Me xic o - 6.5% 3.4% 3 .5% 5.3 % 5.1% 5.3% Mexico ($/MXN) 1 2.60 1 2.40 1 2.20 1 2.20 1 2.00 1 2.00
Brazil - 0.9% 3.5% 3 .9% 4.9 % 5.2% 5.6% Norway (NOK/$) 5.90 6.00 6.04 6.08 6.24 6.29
Russia - 7.9% 3.6% 4 .1% 11.8 % 6.8% 8.8% Sweden (SE K/$) 7.24 7.38 7.45 7.52 7.67 7.76
Fore cast as o f: March 10, 2010 Fo reca st as of: Ma rch 10, 2010
1
Aggregated Using PP P We ights
Wells Fargo Int ernational Int erest Rate Forecast

(End of Quarter Rates)
3-Mont h LIBOR 10-Ye ar Bond
2010 2011 2010 2011
Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3
U.S. 0.35% 0.55% 0.80% 1.50% 2.35% 3.10% 3.80% 4.00% 4.10% 4.20% 4.30% 4.30%
Japan 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 1.35% 1.35% 1.45% 1.50% 1.60% 1.80%
Euroland 0.60% 0.80% 1.00% 1.40% 2.25% 3.00% 3.25% 3.30% 3.70% 4.00% 4.25% 4.40%
U.K. 0.65% 0.75% 1.00% 1.75% 2.75% 3.40% 4.10% 4.40% 4.70% 4.80% 4.90% 5.00%
Canada 0.40% 0.50% 1.00% 2.00% 3.00% 3.50% 3.60% 3.90% 4.10% 4.30% 4.40% 4.45%
Forecast as of: March 10, 2010
ECONOMICS GROUP
WELLS FARGO SECURITIES, LLC
Wells Fargo Securities, LLC Economics Group
Diane Schumaker-Krieg Global Head of Research (704) 715-8437 diane.schumaker@wellsfargo.com

& Economics (212) 214-5070
John E. Silvia, Ph.D. Chief Economist (704) 374-7034 john.silvia@wellsfargo.com

Mark Vitner Senior Economist (704) 383-5635 mark.vitner@wellsfargo.com
Jay Bryson, Ph.D. Global Economist (704) 383-3518 jay.bryson@wellsfargo.com
Scott Anderson, Ph.D. Senior Economist (612) 667-9281 scott.a.anderson@wellsfargo.com
Eugenio Aleman, Ph.D. Senior Economist (612) 667-0168 eugenio.j.aleman@wellsfargo.com
Sam Bullard Economist (704) 383-7372 sam.bullard@wellsfargo.com
Anika Khan Economist (704) 715-0575 anika.khan@wellsfargo.com
Azhar Iqbal Econometrician (704) 383-6805 azhar.iqbal@wellsfargo.com
Adam G. York Economist (704) 715-9660 adam.york@wellsfargo.com
Ed Kashmarek Economist (612) 667-0479 ed.kashmarek@wellsfargo.com
Tim Quinlan Economic Analyst (704) 374-4407 tim.quinlan@wellsfargo.com
Kim Whelan Economic Analyst (704) 715-8457 kim.whelan@wellsfargo.com
Yasmine Kamaruddin Economic Analyst (704) 374-2992 yasmine.kamaruddin@wellsfargo.com
Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer
registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the
Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through
subsidiaries including, but not limited to, Wells Fargo & Company, Wachovia Bank N.A., Wells Fargo Bank N.A,
Wells Fargo Advisors, LLC, and Wells Fargo Securities International Limited. The information and opinions herein are
for general information use only. Wells Fargo Securities, LLC does not guarantee their accuracy or completeness, nor
does Wells Fargo Securities, LLC assume any liability for any loss that may result from the reliance by any person upon
any such information or opinions. Such information and opinions are subject to change without notice, are for general
information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or
as personalized investment advice. Wells Fargo Securities, LLC is a separate legal entity and distinct from affiliated
banks and is a wholly owned subsidiary of Wells Fargo & Company © 2010 Wells Fargo Securities, LLC.
SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Global Chart Book - March 2010

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Global Chart Book - March 2010

Încărcat de

Drepturi de autor:

Formate disponibile

March 11, 2010

Global Chartbook: March 2010

This report is available on wellsfargo.com/research and on Bloomberg WFEC

OECD Industrial Production

 The global economy is bouncing back from its

 The major governments of the world averted

unprecedented lows, but major central banks

 Deep global recession and the collapse in

will trend higher this year, but runaway global

0% 0% Source: U.S. Department of Commerce, U.S. Department of Labor

decades, the U.S. economy grew again in the 6.0% 6.0%

effects of government stimulus. In addition, a 0.0% 0.0%

economy at present. -4.0% -4.0%

 It would be incorrect, however, to claim that -6.0% -6.0%

 Unfortunately, the pace of growth will probably 12% 12%

be sluggish for the next year or so. Many 9% 9%

since the early 1980s, and the slow pace of 0% 0%

 Core measures of inflation are very benign at -6% -6%

present, which allows the Federal Reserve to -9% -9%

emergency measures that were put in place -15% -15%

increase in the fed funds rate until late this

CPI vs. Core CPI

Unemployment Rate: Feb @ 9.7%

Euro-zone Real GDP

 Following its 5 percent contraction between 4.0% 4.0%

early 2008 and mid-2009, real GDP in the 2.0% 2.0%

0.5 percent in the second half of 2009. -4.0% -4.0%

the first quarter, albeit at a sluggish pace. -8.0% -8.0%

 The well-publicized debt problems of some

will weigh on economic prospects in the euro

 Weak growth and benign inflation imply that 35 35

main policy rate at 1 percent, where it has been

Japanese Real GDP

 Fears of a double-dip recession in Japan have

came in far stronger than the consensus

solid advances in domestic spending, both

business spending should continue to lead

 Even Japan’s labor market is showing

jumped 0.9 percent in January, the biggest

1.5 percent above year-ago levels. February

Japanese Retail Sales

6.0% 6.0% 4.5% 4.5%

U.K. Real GDP

 After six consecutive quarters of contraction in 4.0% 4.0%

which real GDP fell more than 6 percent,

suggest that growth has remained positive in -4.0% -4.0%

 In our view, the U.K. economy will expand

the Bank of England’s target of 2 percent at

Bank of England the wherewithal to remain on

U.K. Consumer Price Index

CPI: Jan @ 3.4%

Australian Real GDP

 After sidestepping the worst of the fallout from 8% 8%

the global financial crisis, Australian economic

likely a reflection of public infrastructure 0% 0%

strength in spending has to do with

suspect domestic demand may wane somewhat

following the year-end expiration of the rebate

 The Reserve Bank of Australia (RBA) has been

away the punch bowl” as it has raised its key

Central Bank Policy Rates

0.0% 0.0% Source: Bloomberg LP, IHS Global Insight and

Canadian Real GDP

The global economy is bouncing back from its

The major governments of the world averted

Deep global recession and the collapse in

It would be incorrect, however, to claim that -6.0% -6.0%

Unfortunately, the pace of growth will probably 12% 12%

Core measures of inflation are very benign at -6% -6%

Following its 5 percent contraction between 4.0% 4.0%

The well-publicized debt problems of some

Weak growth and benign inflation imply that 35 35

Fears of a double-dip recession in Japan have

Even Japan’s labor market is showing

After six consecutive quarters of contraction in 4.0% 4.0%

In our view, the U.K. economy will expand

After sidestepping the worst of the fallout from 8% 8%

The Reserve Bank of Australia (RBA) has been

The Canadian economy shrank 2.6 percent for 4.0% 4.0%

Domestic demand is supporting growth in real

The overnight rate in Canada has been at

Norway experienced a mild recession in

Singapore’s fourth quarter GDP was revised up

Labor market conditions are on the mend as -10.0% -10.0%

South Korea’s expansion lost some significant 15% 15%

South Korea’s industrial production in January -15% -15%

Although growth has returned to most other

About 60 percent of the country’s exports are

Due to the rise in energy prices over the past 65 65

After experiencing a mild recession in late

House prices in most parts of Switzerland did

The Swiss National Bank (SNB) has