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LIIEA Conference
May 21, 2015
April 2015
Where Are The World Economies?
Key Economic Metrics
Source: Bloomberg
Source: Bloomberg

Although unemployment has improved across the globe since this time last year, there are troubling signs in
other key metrics.

Inflation is low globally (ex Brazil) and dangerously low in Europe.

GDP is holding in there globally, but recent data in the US at least has not been as robust. This could have a
potential impact on the fragile state of GDP elsewhere.
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Where Are The World Economies?
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Key Exchange Rates
JPY Per USD
USD Per Euro
MXN Per USD
BRL Per USD
USD Per GBP
Conclusions

The USD has been firmer across
the board since mid/late 2014.
Although it has been slipping the
last few months.

This should be a slight stimulus to
the rest of the world and a slight
drain on the US.
Source: Bloomberg
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Where Are The World Economies?
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Important Changes From Last Year
Oil

Oil’s tremendous drop over the
past 9 months would normally
been hailed in the US.

However, the degree that to
which the US recent recovery has
been due the Shale Boom has
tempered the euphoria.

Despite on-going tension in the
US, Saudi pumping has sent oil
plummeting.
S&P 500

The S&P 500, and stocks in
general, have been virtually
unstoppable.
US 10 Year Yield

Data Source: Bloomberg
US
long
term
rates,
represented here by the US
Government 10 year Bond
Yield, have stayed lower, or
gone lower, despite the halt
of Federal Reserve Bond
Purchases.
Where Are The World Economies?
Key Risk Factors

US: Recent data has delayed market expectations of a rate hike this summer, now priced in for September.

US: Focus will be on employment, GDP and inflation data for signs of Fed rate hike timing

Europe: Greece.

Europe: Focus will be on inflation data especially, as well as business confidence.

Europe: Geopolitical pressures. (Ukraine)

China: Slowing economic activity.

China: Geopolitical issues. (South China Sea)

China: Financial institution solvency.

Japan: Geopolitical issues.(South China Sea)

Japan: Trade Deficit.

Brazil: Political Issues/Scandal

Brazil: Also focus on inflation.

Brazil: Increasing focus on preparation for the 2016 Olympics.

Brazil: A tightening in the US will put pressure on rates to go higher in Brazil.
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