RESEARCH | GLOBAL MACRO DAILY | NEW YORK OPEN 14 March 2012 GLOBAL MACRO DAILY Risk marches on UPDATE: This version reflects India’s February inflation number which printed above Market Insights and Events consensus at 6.95% y/y. Europe 4 Asia Pacific 5 As we expected, the FOMC acknowledged the stronger data flow in the US and North America 6 upgraded its assessment of the economic outlook (Full Story). In our view, the EEMEA 7 statement further lowers the probability of additional monetary stimulus (we do not expect further easing this year). The Treasury curve continued its recent The next 24 hours steepening trend (Full Story), while US equities held onto recent gains, and the Europe 8 dollar strengthened. Asia Pacific 8 The JPY appears to be the biggest loser in the recent bout of USD strength. Our North America 8 strategists believe JPY underperformance is likely to continue, with USD/JPY EEMEA 8 likely to reach 88 in 3m and 90 in 6m (previously 80 and 82, respectively). We Latin America 9 recommend buying a 3m USD/JPY one-touch option struck at 88 to express our Calendar 10 bullish USD/JPY view (Full Story). Contacts 12 In our opinion, easy global monetary policy and a rebound in risk appetite are likely to be supportive of FX carry trades. However, we advise caution in choosing the carry currency, as stretched valuations and low levels of implied volatility suggest that markets might be a bit too complacent regarding the prospects for some currencies (see Focus on page 2). The latest incoming data have improved our tracking estimate for Q1 US GDP growth to 2.1%, against our published forecast of 2.5%. The February retail sales report included upward revisions to January data (Full Story) and, together with stronger inventory accumulation (Full Story), boosted our Q1 tracking estimate and investor sentiment ahead of the release of the March FOMC statement. Within EM, monetary policy is likely to be in focus for the next two days, as the central banks in India, Chile and Mexico announce policy decisions. Ahead of the RBI’s decision, India’s February inflation printed above consensus at 6.95% y/y. In Brazil, the minutes of the February COPOM meeting will be closely scrutinised. In the latest BIS quarterly review, the BIS reported that “the shedding of bank assets will play a small part” in reaching target capital ratios for European banks. It said banks plan to cover 77% of the capital shortfall by raising capital and reserves, converting hybrids and issuing convertible bonds, and increasing retained earnings. The report is somewhat narrowly focused on the EBA stress test, and we believe some countries (Spain, Portugal, and Ireland) will likely need a higher emphasis on deleveraging (Full Story). PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 12 Barclays Capital | Global Macro Daily Focus Time to focus on FX volatility? Paul Robinson, Raghav Subbarao In yesterday’s Global Macro Daily, we discussed the prospects for the FX carry trade and valuation, arguing that the threat of countries’ authorities responding to seemingly overvalued currencies should be taken into account when deciding which high-yielding currencies were most attractive. In this piece, we take that analysis a step further by adding FX volatility to the mix. There are two reasons why volatility matters. First, the historical norm has been that the carry trade does well most of the time but, when it does badly, it does very badly. 2008/09 was a classic example of this where currency pairs such as AUD/JPY collapsed after a prolonged period of outperformance. At such times, volatilities tend to spike higher (Figure 1). Second, implied volatilities falling to unusually low levels and currency valuations becoming stretched are warning signs that confidence may be becoming excessive. Figure 2 shows the evolution of FX volatilities for the majors relative to the USD over the past few years. Realized and implied volatilities are close to their lows since the start of 2008. That is despite the ongoing euro area problems, fears of commodity prices being too high with the threat of geopolitical problems pushing them higher, worries about the sustainability of the global recovery and, perhaps the elephant in the room, US Treasury yields being close to multi-decade lows. All of the issues listed above have been present for some time, though, while FX volatility has remained very subdued: implied volatility is low because realized volatility has been very constrained. And it does seem to be the case that option market participants are concerned that volatility could pick up. The spread between implied and realized volatility is unusually high for some currencies, in particular the JPY (in the top 1% of observations for its 3m volatility since the start of 2008), the BRL (close to its 92nd centile) and even the AUD (around its 80th centile). Despite this, though, the low levels of implied volatility for some currencies, given the uncertain environment, do suggest caution. As Figure 1 shows, when volatilities increase, it can happen very aggressively. Figure 1: AUD/JPY volatilities exploded during the crisis Figure 2: Average G4 volatility has decreased to close to its post-crisis lows 70 20 18 60 16 50 14 12 40 10 30 8 6 20 4 10 2 Jan08 Jan09 Jan10 Jan11 Jan12 0 3m Implied Vol 3m Realized Vol Jan08 Jan09 Jan10 Jan11 Jan12 Source: Barclays Capital Source: Barclays Capital 14 March 2012 2 Barclays Capital | Global Macro Daily We do not advise that clients outright short the carry trade. The combination of extremely loose monetary policy and reasonable global growth is unlikely to change soon, in our view, and both should support risky trades, to some extent. But some FX volatilities do appear stretched, and we think that that, together with the valuation issues discussed in yesterday’s GMD, this means that some currencies are best avoided in terms of establishing longs. To identify which, Figures 3 and 4 show the current levels of implied and realized volatility for currencies relative to their ranges since the beginning of 2008 along with their annualized yields. Two things strike us as particularly interesting. First, the G10 currencies shown in Figure 3 appear to be more extreme in terms of implied volatilities. Implied volatilities for GBP, CAD and even the NZD and AUD are at very low levels. This is unlikely to last, in our view. Indeed, being long G10 FX volatility strikes us a relatively cheap way of hedging against general market problems reemerging. Second, there is no clear relationship between carry and implied volatilities. In particular, the TRY and ZAR among the EM currencies and the AUD and NZD among those in the G10 have relatively high “ex ante Sharpe ratios” (ie, carry divided by implied volatility). This means that they represent attractive carry trades if you agree with option market pricing, and a cheap hedge if you are more concerned. Figure 3: Current G10 implied volatility is low and largely Figure 4: EM implied vol appears less stretched than in the uncorrelated with carry levels G10 but again uncorrelated with carry 30 5 90 10 80 25 4 8 70 20 3 60 6 50 15 2 4 40 10 1 30 2 20 5 0 0 10 0 -1 0 -2 MXN PLN CNY TRY CZK DKK THB RUB PHP CLP KRW ILS TWD HKD SGD MYR IDR ZAR INR BRL HUF JPY DKK SEK NOK GBP CAD NZD AUD EUR CHF Percentile of Implied Vol Percentile of realized vol Percentile of Implied Vol Percentile of realized vol Fwd implied yields Fwd implied yields Source: Barclays Capital Source: Barclays Capital 14 March 2012 3 Barclays Capital | Global Macro Daily MARKET INSIGHTS AND EVENTS Europe Euro area: HICP inflation likely to stay above 2.0% for the rest of this year Fabio Fois Euro area HICP inflation was unrevised at 2.7% y/y in February in line with both our and the market's expectations. Core inflation was unchanged at 1.5% y/y in line with our expectations but a notch below the market's which was for an increase of 0.1pp to 1.6% y/y. Also as we expected, the HICPx print was 113.53 (no consensus was available). We think euro area inflation has peaked for this year and is now set to slowly decline during the rest of 2012. Full Story Euro area IP: Modest start to 2012; consistent with declining output, but with improving momentum in Q1 12 vs Q4 11 Francois Cabau It is a first evidence from hard data that overall economic momentum should improve in Q1 12 from Q4 11, which goes hand in hand with our baseline scenario that euro area GDP should contract by 0.2% q/q in Q1 12 less than -0.3% q/q estimated by eurostat for Q4 11. Full Story UK average earnings growth falls sharply, while unemployment continues to rise Blerina Uruci Labour market conditions continued to deteriorate in January, with unemployment rising and earnings growth slowing. The ILO unemployment rate was unchanged at 8.4% (consensus/BarCap: 8.4%). Nevertheless, the number of unemployed people increased by 28k over the period to 2.67 million. The most striking feature of today's release is the unexpectedly sharp fall in headline earning growth. Headline average weekly earnings growth fell to 1.4% 3m/y (consensus/BarCap: 1.9%) from 1.9% previously. Full Story France: N. Sarkozy and F. Hollande shoulder to shoulder Fabrice Montagne, Marion Laboure France: N. Sarkozy and F. Hollande shoulder to shoulder. For the first time since the beginning of the presidential campaign, a poll published today shows N. Sarkozy in the lead in the first round with 28.5% of voting intentions while F. Hollande would secure 27% of the votes (Ifop-Paris Match). N. Sarkozy has shown some improvement in the polls since he officially announced his campaign but has never until today been put in front in the first round. Full Story European Fixed Income Strategy Morning Comment - 14 March 2012 Mikael Nilsson Last night's FOMC statement acknowledged better incoming data and upgraded the committee's assessment of the economic outlook. After the statement, Fed rate hike expectations were pulled forward, with Dec '13 fed fund futures now trading at c 40bp. In addition, the 2y Treasury-OIS basis cheapened to 10bp. Our US strategists believe these moves are inconsistent with expectations of a 7.6% unemployment rate by the end of 2013 14 March 2012 4 Barclays Capital | Global Macro Daily and with the market paring QE3 expectations. As such, they prefer expressing long views through 2y Treasuries. Full Story Sweden: Inflation profiles updated Marcus Widen, Mikael Nilsson In light of this morning's February inflation report, we have updated our CPI and CPIF profiles. Although there are not any major changes, some remarks are worth mentioning, and we still expect the Riksbank preferred measure, CPIF, to remain below 2% for the foreseeable future. Full Story Asia Pacific JPY: Further upside potential, we now expect USD/JPY at 90 Masafumi Yamamoto, Guillermo Felices Given the strong upward momentum and our view that the factors behind the recent move will remain intact for a while and that downside risks have been dramatically reduced, we revise our USD/JPY forecasts upward. We now expect USD/JPY to reach 84 in 1m, 88 in 3m, and 90 yen in 6m and 1y (previous forecasts: 1m 78, 3m 80, 6m 82, 1y 84). To express our bullish view on USD/JPY we recommend buying a 3m USD/JPY one-touch option at 88, which costs 28.9% of notional with spot reference at 82.90 yen. Full Story Japan rates strategy: Correction started in cheap 30y swaps - recommend a weighted JGB futures vs 30y swap flattener Reiko Tokukatsu, CFA Given the 54-sen sell-off in JGB futures today, one might hesitate to sell futures from here. But we believe we are finally seeing a correction in JPY curves, where the belly is rich (most notably in JGB futures) and the long end is cheap. We recommend a weighted 7s30s flattener using JGB futures versus 30y swaps. Full Story Korea: Improving trend in labour market in Feb masked temporarily by 'graduation season' distortion Wai Ho Leong, Rahul Bajoria The seasonally adjusted unemployment rate jumped unexpectedly to 3.7% in February (BarCap: 3.1%; consensus: 3.2%), from 3.2% in January. We believe this was due to the larger than expected influx of college graduates into the job market, a point we had not taken into account in our forecast. Stripping out the distortion created by graduation season, we are left with a strong labour market report for February, and a trend of continued improvement in labour market conditions. Full Story China: Strong property investment growth in January-February will not be sustained Jian Chang, Yiping Huang, Lingxiu Yang Property investment growth in China, a key area to watch for downside growth risks, appears to have reversed its earlier rapid slowing trend, having risen to 27.8% y/y in January-February from 20.1% in November and 12.3% in December. This is despite the continued slide in property sales and weakness seen in the data for new loans and steel and cement production. We look in some detail at this property investment trend, keeping in mind the observed seasonality effect. Full Story 14 March 2012 5 Barclays Capital | Global Macro Daily North America US Fixed Income Outlook for March 14: Treasuries sell off as the FOMC acknowledges data improvement Ajay Rajadhyaksha, Dean Maki The Treasury market sold off on Tuesday, and the curve steepened – 2y, 5y, 10y, and 30y yields rose 1.5bp, 4.5bp, 4.7bp, and 5.2bp. Economic data were stronger than expected. Retail sales ex-auto and gas increased 0.6% in February, higher than consensus expectations of 0.5%. Business inventories also printed higher than forecast, and our economics team's tracking estimate of Q1 GDP rose to 2.1%. In the March FOMC statement, the Fed acknowledged better data and changed the categorization of the FOMC's growth expectation from "modest" to "moderate," which also likely contributed to the sell-off. The market pared back its expectations of additional asset purchases, as evidenced by the cheapening of the 10y sector, strengthening of the USD, and sell-off in gold. Later in the day, JPM announced an equity buyback and boosted its dividend, which led to a rally in equity markets and exacerbated the Treasury sell-off. After the FOMC statement, Fed hike expectations were also pulled forward. Dec13 fed fund futures are now trading at ~40bp, which is too high relative to expectations of a 7.6% unemployment rate at the end of 2013. In addition, the 2y Treasury-OIS basis cheapened to 10bp, which is inconsistent with the market’s paring back QE3. We therefore like expressing the long view through 2y Treasuries. Full Story Federal Reserve Commentary: March FOMC: Better data plus upgraded outlook equal a lower probability of QE3 Michael Gapen, Troy Davig The better data flow, the improvement in the characterization of the outlook, the acknowledgement of a healthier labor market, and the reduction of strains in global financial markets all point toward a further reduction in the probability of additional quantitative easing, in our view. We believe that the economy would either need to suddenly slow or inflation to decline more than the Committee expects before additional asset purchases are initiated. We do not forecast further easing this year. Full Story US retail sales in February raise Q1 GDP tracking to 1.9% Troy Davig Retail sales increased 1.1% m/m in the month of January from an upwardly revised 0.6% in the month prior (initial January estimate: 0.4%). The upward revisions and stronger-than- expected increase in core has raised our Q1 GDP tracking estimate from 1.5% q/q (saar) to 1.9%, with consumption growth in Q1 also now tracking at 1.9%. Full Story US small business optimism climbs higher in February Cooper Howes The National Federation of Independent Business (NFIB) index of US small business optimism rose to 94.3 in February, which was below the consensus estimate of 94.5 but above the January reading of 93.9. This was the sixth consecutive monthly increase and puts the index only slightly below its value in February 2011 (94.5) but significantly above its February 2010 print (88.0). Full Story 14 March 2012 6 Barclays Capital | Global Macro Daily US business inventories in January lift Q1 GDP tracking to 2.1% Troy Davig Business inventories increased 0.7% m/m in January from an upwardly revised 0.6% in the month prior (initial December estimate: 0.4%). The strongest gains were in the manufacturing (0.9%) and retail (0.5%) sectors, while wholesale inventories fell 0.1%. Retail inventories excluding autos increased 0.4%, which boosted our Q1 GDP tracking estimate to 2.1% from 1.9%. Full Story US January JOLTs report shows more job openings Cooper Howes The January US Job Openings and Labor Turnover (JOLTs) report showed 3.5mn job openings, which was unchanged from December after an upward revision (previous: 3.4mn). The number of unemployed in January was 12.8mn, meaning there were an estimated 3.7 unemployed job seekers for each opening. Full Story EEMEA Russia: Pre-election fiscal weakening in February Vladimir Pantyushin Russia's Federal budget posted a deficit of RUB245.3bn in February, while the January figure was revised up from a RUB17.9bn deficit to a RUB27.2bn surplus. To some extent weaker performance in Jan/Feb was due to a reallocation of expenditure from later months in the run-up to the presidential elections. Overall, the report confirms our expectation that the budget is shifting into deficit, although not to the extent specified in the budget law (we expect a full-year figure of 1.0% of GDP versus 1.5% in the law). Full Story Russia: CBR leaves policy rates unchanged Vladimir Pantyushin, Koon Chow The Bank of Russia (CBR) kept all its monetary policy parameters unchanged today, in line with expectations. However, the bank again expressed a concern about the growth outlook. We believe this, along with the support of the banking sector liquidity, will bring another 25bp rate cut in May. We view the CBR concerns about inflation outlook as slightly overdone: although we expect the disinflation trend to reverse in H2, we believe the headline CPI will remain within the 5.0-6.0% end-year limit. Full Story South Africa: Mining production still under pressure Jeffrey Schultz South Africa's mining sector got off to a relatively poor start in 2012 it seems with headline production growth slipping back into negative territory in January, falling 2.5% y/y (prior: +0.1%). On a seasonally adjusted m/m basis, production growth dipped 4.7% in the month and was driven largely by contractions in PGM (-15.3% m/m); gold (-3.5%); nickel (- 11.7%) and other non-metallic mineral (-7.5%) production. Strong positive m/m contributions which helped offset some of these declines came largely from diamond production which jumped an impressive 33.9% in January, while manganese and building material production rose 9.8% and 7.3%, respectively. Full Story 14 March 2012 7 Barclays Capital | Global Macro Daily THE NEXT 24 HOURS Europe Norway – Norges Bank policy rate: We expect the Norges Bank to keep the policy rate unchanged at 1.75%. Indeed, since the December meeting many things have happened. While global prospects seem somewhat better, the domestic data have proved solid and credit growth continues to be elevated. In this environment we retain our view of unchanged rates during 2012; however, the recent decisive appreciation of the NOK suggests there could be some probability of a cut. Euro area – Employment: We look for euro area employment to fall by 0.3% q/q in Q4 11, which would be the second consecutive negative quarter, after -0.1% q/q in Q3 11. As we only envisage a very gradual return to growth, we believe that one should expect to see more job losses in the forthcoming quarters. Asia Pacific Philippines - Remittances: We expect remittances to fall about 12% m/m given seasonal weakness at the start of the year. India - RBI policy rate: Our base case calls for a 25bp repo rate cut in April; we see an outside chance of a March cut. We expect the RBI to lower the cash reserve ratio (CRR) 50bp to address persistent tightness in banking system liquidity. A cut in both the repo rate and the CRR at the same policy meeting is unlikely, in our view. North America US - Import prices: We are looking for a 0.4% increase in import prices in February, reflecting a gain in petroleum prices and a small rise in non-petroleum prices, of 0.1%. This would be consistent with small declines in the y/y rates of headline and ex-petroleum import prices, continuing the recent downward trend. This is likely to continue in the near term as base effects from last year’s energy price rise play out. However, the recent rebound in oil prices and decline in the trade-weighted dollar hint at some import price pressures in the pipeline. US - Current account: We expect the current account deficit to have widened modestly, to $113bn in Q4 from $110.3bn in Q3. EEMEA Israel - Current account: C/A balance likely to be negative in Q4 11 due to deterioration in trade and seasonal weakness of income account. Turkey - Unemployment rate: Unemployment typically jumps in December, but on seasonally-adjusted basis it seems to have stabilised around levels just below 9.5%. Ukraine - Retail trade: Consumer sector remains a key growth driver. Strong wage growth will support further expansion in the near term. 14 March 2012 8 Barclays Capital | Global Macro Daily Latin America Mexico - Aggregate supply & demand: Our forecast is consistent with imports growing 5.5% y/y. Overall, we expect this demand breakdown report to show a sharp slowdown of investments – monthly data point to a negative print of -0.4% q/q saar, despite the ongoing dynamism by the end of the quarter. This is reflecting weak business confidence, likely postponing investment decisions. Brazil - COPOM meeting minutes: To our surprise, but sanctioning market expectations, the BCB increased the pace of easing and slashed the SELIC rate 75bp, to 9.75%, in a split decision, with five votes supporting the more aggressive cut and two siding with maintaining the 50bp pace. With very little to read from the statement, all focus will be on the minutes. But the more aggressive cut, in our view, leads to at least two possible interpretations: 1) the BCB decided to anticipate the cycle by cutting more aggressively. If this is the case, the minutes should bring a more hawkish tone, indicating that the BCB is ready to pause to gauge the effect of the stimulus already deployed (275bp of cuts); or 2) it decided to act more aggressively to help stem the appreciation of the currency and boost domestic activity, reflecting a strong surprise with the 2.7% real GDP growth last year and weak January 2012 IP release. While the minutes will be critical to understand the Copom view, we think the second scenario is more likely. 14 March 2012 9 Barclays Capital | Global Macro Daily CALENDAR Wednesday 14 March Period Prev 2 Prev 1 Latest Forecast Consensus 05:30 Portugal: FM Gaspar speaks on the third review of Portugal's financial aid program at Parliamentary Commission 08:00 E17: ECB Executive board member Praet speaks at the “Collateral Solutions Conference” in Paris 09:00 Hungary: Central bank minutes - - 09:00 Norway: Interest rate announcement, % Mar 1.75 1.75 1.75 1.75 1.75 09:45 UK: BoE Executive Director Haldane speaks at the LEI Symposium in New York 10:00 US: Fed President Bernanke (FOMC voter) speaks in Nashville 11:40 Sweden: Riksbank Governor Ingves speaks on the economic situation and new banking regulations in Stockholm 13:00 Germany: Chancellor Merkel speaks on "German Economy" in Heidelberg 15:00 Ireland: CB Governor Honohan speaks at University of Limerick Society in Dublin - Brazil: CAGED formal job creations, k (to 21/03) Feb 42.7 -408.2 118.9 - - - Israel: Current account, $ bn Q4 0.3 -0.2 0.6 - - 02:30 India: WPI, % y/y Feb 9.5 7.5 6.6 6.6 6.9 A 03:00 Finland: HICP, % m/m (y/y) Feb 0.2 (3.2) 0.0 (2.6) 0.8 (3.0) 0.9 (3.1) 0.8 (3.0) A 03:00 Sweden: Unemployment rate (PES), % Feb 4.4 4.7 4.8 4.8 4.7 A 04:00 Slovakia: HICP, % m/m ( y/y) Feb 0.5 (4.8) 0.1 (4.6) 1.5 (4.1) 0.0 (3.7) 0.2 (4.0) A 05:00 Austria: HICP, % m/m (y/y) Feb 0.1 (3.9) 0.2 (3.4) -0.5 (2.9) 0.5 (2.6) 0.5 (2.6) A 05:30 UK: Average weekly earnings, % 3m/y Jan 2.1 2.0 1.9 R 1.9 1.4 A 05:30 UK: Core average earnings, % 3m/y Jan 1.8 1.9 2.0 2.0 1.7 A 05:30 UK: ILO unemployment rate, % Jan 8.3 8.4 8.4 8.4 8.4 A 05:30 UK: Claimant count unemployment, k Feb 0.2 1.9 7.0 R 4.9 7.2 A 06:00 Croatia: CPI, % y/y Feb 2.6 2.1 1.2 - 1.3 A 06:00 E17: Industrial production, % m/m (y/y) Jan 0.1 (1.0) -0.4 (0.2) -1.1 (-1.8) -0.2 R 0.2 (-1.2) A 06:00 E17: Final HICP, % m/m (y/y) Feb 0.3 (2.7) -0.8 (2.6) ...(2.7) P 0.5 (2.7) 0.5 (2.7) A 06:00 E17: HICP ex tobacco, index (2005 = 100) Feb 113.58 113.91 112.96 113.53 113.53 A 06:00 E17: 'Eurostat' core (HICP x fd, alc, tob, ene), % m/m (y/y) Feb -0.1 (1.6) 0.4 (1.6) -1.7 (1.5) 0.4 (1.5) 0.3 (1.5) A 07:00 South Africa: Retail sales constant, % y/y Jan 7.5 7.2 8.7 8.3 3.9 A 08:30 US: Import prices, % m/m (y/y) Feb 0.7 (10.1) -0.1 (8.5) 0.3 (7.1) 0.4 (5.7) 0.6 (5.8) 08:30 US: Nonpetroleum import prices, % m/m (y/y) Feb -0.3 (3.3) 0.1 (2.5) 0.0 (1.7) 0.1 (1.9) - 08:30 US: Current account balance, $ bn Q4 -119.6 -124.7 -110.3 -113.0 -115.0 10:00 Mexico: Aggregate supply & demand, % y/y Q4 6.0 4.2 4.9 4.2 4.7 10:30 Brazil: Economic activity index, % y/y Feb 0.7 0.8 1.5 - - 17:30 New Zealand: Business PMI, index Feb 46.5 51.6 50.5 - - 20:00 New Zealand: Consumer confidence, % m/m Mar -0.6 7.1 -2.4 - - 20:00 Australia: Inflation gauge , % m/m Mar 2.4 2.8 2.5 - - 20:30 Australia: Vehicle sales, % m/m (y/y) Feb -0.7 (2.5) -2.7 (-3.0) 1.3 (2.7) - - 00:00 Malaysia: 15y Bonds Auction MYR 3 bn 00:00 Malaysia: 126d/208d/306d Notes Auction MYR 4 bn 06:00 Italy: BTP Auction € 6.5 bn 10:45 UK: 7-15y Reverse Gilt Auctions £ 1.5 bn 14:00 US: 30y Bond Auction $ 13 bn 23:00 Japan: 20y JGB Auction ¥ 1100 bn 14 March 2012 10 Barclays Capital | Global Macro Daily Thursday 15 March Period Prev 2 Prev 1 Latest Forecast Consensus - Global: G20 Sherpas Meeting (to 16/03) - Ireland: FM Noonan visit France 02:30 India: RBI repo rate, % Mar 8.50 8.50 8.50 8.50 8.50 02:30 India: RBI reverse repo rate, % Mar 7.50 7.50 7.50 7.50 7.50 04:00 E17: Euromoney conference in Luxembourg 04:30 Swi: Interest rate announcement, % Mar 0.00-0.25 0.00-0.25 0.00-0.25 0.00-0.25 0.00-0.25 04:30 Sweden: Riksbank Governor Ingves speaks on Finance's public hearing on financial stability from a consumer perspective in Stockholm 05:00 E17: ECB publishes monthly bulletin Mar 05:00 Finland: CB Governor Liikanen speaks on monetary policy and global economy in Helsinki 07:30 Brazil: COPOM meeting minutes Feb 07:30 UK: BoE MPC Member Broadbent speaks at the Market News Connect Seminar in London 09:00 Neth: CB Governor Knot speaks at VU Amsterdam university in Amsterdam 14:30 Austria: CB Governor Nowotny speaks in Vienna 18:00 Chile: Overnight rate target, % Mar 5.25 5.00 5.00 5.00 5.00 - Peru: Economic activity index, % y/y Jan 5.30 5.10 6.00 5.65 - - Brazil: Tax collections, BRL bn (to 22/03) Feb 79.0 96.6 102.6 - - - Peru: Unemployment rate, % Feb 7.0 7.0 7.8 - - - Philippines: Remittances, % y/y Jan 6.2 10.6 6.2 7.2 - - Ukraine: Retail trade YTD, % y/y (to 16/03) Feb 14.5 14.7 13.8 11.2 - 03:00 EU 27: New car registrations, % y/y Feb -3.5 -6.4 -7.1 - - 04:00 Czech: Retail sales, % y/y Jan 1.5 0.5 1.6 - 0.7 04:00 Turkey: Unemployment rate, % Dec 8.8 9.1 9.1 - - 04:30 Sweden: Unemployment rate, % Feb 6.7 7.1 8.0 - 8.0 05:30 Italy: General govt. debt, € bn Jan 1909.1 1904.8 1897.9 - - 06:00 E17: Eurozone employment, % q/q (y/y) Q4 0.1 (0.3) 0.2 (0.4) -0.1 (0.3) -0.3 (0.0) - 06:00 E17: Labor cost, % y/y Q4 2.5 3.3 2.7 - 2.3 07:00 Ireland: HICP, % m/m (y/y) Feb 0.0 (1.7) -0.1 (1.4) -0.4 (1.3) 0.7 (1.1) (1.1) 07:00 Brazil: IGP-10 inflation, % m/m Mar 0.19 0.08 0.04 - 0.25 08:30 US: PPI, % m/m (y/y) Feb 0.2 (5.7) -0.1 (4.8) 0.1 (4.1) 0.5 (3.3) 0.5 (3.3) 08:30 US: Core PPI, % m/m (y/y) Feb 0.1 (2.9) 0.3 (3.0) 0.4 (3.0) 0.2 (3.9) 0.2 (2.9) 08:30 US: Initial jobless claims, k (4wma) 10-Mar 353 (360) 354 (355) 362 (355) 365 (359) 357 08:30 US: Empire State mfg, index Mar 8.19 13.48 19.53 22.0 17.5 09:00 US: Net long-term TIC flows, $ bn Jan 8.1 61.3 17.9 - 38.5 10:00 Poland: Budget level YTD, PLN bn Feb -22.5 -21.6 -5.3 - - 10:00 US: Philadelphia Fed mfg, index Mar 6.8 7.3 10.2 11.5 12.0 12:30 Israel: CPI, % y/y Feb 2.6 2.2 2.0 1.9 1.7 17:00 Colombia: Trade balance, USD mn Jan 103.00 71.10 1210.00 - 975.00 20:30 Singapore: Non-oil domestic exports, % y/y Feb 1.4 9.0 -2.1 15 16.2 00:00 Malaysia: 182d Notes Auction MYR 1 bn 05:30 Spain: 3y, 4y and 6y SPGB Auction € 4.5 bn 05:50 France: 2y & 4y BTAN Auction € 8.5 bn 06:30 UK: 2042 Gilt Auction £ 2.25 bn 06:50 France: 7y OATi Auction € 0.6 bn 06:50 France: 10y & 15y OATei Auction € 1.6 bn Note: All times are New York time. Sources: Reuters, Market News, Bloomberg, Barclays Capital 14 March 2012 11 Barclays Capital | Global Macro Daily RESEARCH CONTACTS Larry Kantor Piero Ghezzi Head of Research Head of Economics, +1 212 412 1458 Emerging Markets and FX Research email@example.com +44 (0)20 313 42190 firstname.lastname@example.org US Michael Gavin Barry Knapp Dean Maki Michael Pond Ajay Rajadhyaksha Head of Global Macro Strategy and Head of US Equity Strategy Head of US Economics Research Co-head, Interest Rate Strategy Head of Rates and Securitised Head of EM Strategy +1 212 526 5313 +1 212 526 1731 +1 212 412 5051 Products Strategy +1 646 412 5915 email@example.com firstname.lastname@example.org email@example.com +1 212 412 7669 firstname.lastname@example.org email@example.com Rajiv Setia Michael Zenker Co-head, Interest Rate Strategy Head of US Commodities Research +1 212 412 5507 +1 415 765 4743 firstname.lastname@example.org email@example.com Europe Julian Callow Koon Chow Guillermo Felices Laurent Fransolet Simon Hayes Head of International Economics Head of Emerging EMEA Strategy Head of European FX Strategy Head of European Fixed Income Head of UK Economics and Chief European Economist +44 (0)20 777 37572 +44 (0)20 355 52533 Strategy +44 (0)20 7773 4637 +44 (0)20 7773 1369 firstname.lastname@example.org email@example.com +44 (0)20 7773 8385 firstname.lastname@example.org email@example.com firstname.lastname@example.org Paul Horsnell Moyeen Islam Alan James Christian Keller Sreekala Kochugovindan Head of Commodities Research UK Rates Strategy Head of Inflation-linked Strategy Head of Emerging EMEA Strategy Asset Allocation Strategy +44 (0)20 7773 1145 +44 (0)20 7773 4675 +44 (0)20 7773 2238 +44 (0)20 7773 2031 +44 (0)20 7773 2234 email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com Alia Moubayed Kevin Norrish Antonio Garcia Pascual Paul Robinson Edmund Shing Senior Economist – Middle East Commodities Research Chief Southern European Economist Head of FX Research Head of European Equity Strategy & North Africa +44 (0)20 7773 0369 +44 (0)20 313 46225 +44 (0)20 777 30903 +44 (0)20 7773 4307 +44 (0)20 313 41120 firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org Asia-Pacific Jon Scoffin Olivier Desbarres Yiping Huang Wai Ho Leong Chotaro Morita Head of Research, Asia Pacific Head of FX Strategy, Asia-Pacific Chief Economist, Emerging Asia Senior Regional Economist – Head of Japan Fixed Income Strategy +65 6308 3217 ex-Japan +852 2903 3291 Korea, Malaysia, Singapore, +81 3 4530 1717 email@example.com +65 6308 2073 firstname.lastname@example.org Taiwan email@example.com firstname.lastname@example.org +65 6308 3292 email@example.com Kyohei Morita Hamish Pepper Gavin Stacey Fumiyuki Takahashi Yoshio Takahashi Chief Economist, Japan FX Strategist, Asia-Pacific Fixed Income Strategist, Equity Strategist, Japan Head of Non-Yen Strategy, Japan +81 3 4530 1688 ex-Japan Australia and New Zealand +81 3-4530 2943 +81 3 4530 1686 firstname.lastname@example.org +65 6308 2220 +61 2 9334 6128 email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org Nick Verdi Tetsufumi Yamakawa Masafumi Yamamoto FX Strategist, Asia-Pacific Head of Research, Japan Chief FX Strategist, Japan ex-Japan +81 3 4530 1130 +81 3 4530 5038 +65 6308 3093 email@example.com firstname.lastname@example.org email@example.com 14 March 2012 12 Analyst Certification(s) We, Sreekala Kochugovindan, Paul Robinson and Raghav Subbarao, hereby certify (1) that the views expressed in this research report accurately reflect our personal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report. 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