Jim O Neill Managing Director Head of Global Economics, Commodities and Strategy Research

Transcription

1 The BRIC Effect Jim O Neill Managing Director Head of Global Economics, Commodities and Strategy Research March Goldman Sachs Global Economics, Commodities and Strategy Research

2 GDP Forecasts % yoy GS Consensus* GS Consensus* USA Japan Euroland UK Europe China India Brazil Russia BRICs Advanced Economies World * Consensus Economics March Goldman Sachs Global Economics, Commodities and Strategy Research

3 Domestic Demand Forecasts (%) % yoy (f) 2010 (f) 2011 (f) USA Japan Euroland UK China India BRICs Advanced Economies World Goldman Sachs Global Economics, Commodities and Strategy Research

4 Change in US$ Size of GDP from 2000 to US$bn *2000 GDP was adjusted for the updated 2003 re-base of the series. Source: IMF, GS Global ECS Research Goldman Sachs Global Economics, Commodities and Strategy Research

5 Inflation Forecasts % yoy GS Consensus* GS Consensus* USA Japan Euroland UK Europe China India Brazil Russia BRICs Advanced Economies World * Consensus Economics March 2010 Goldman Sachs Global Economics, Commodities and Strategy Research

6 Crisis Indicator 6 5 Index 4 GS FSI (Financial Stress Index Goldman Sachs Global Economics, Commodities and Strategy Research

7 Credit Spreads 280 bp bp CDX IG (lhs) CDX HY (rhs) Goldman Sachs Global Economics, Commodities and Strategy Research

8 US Financial Conditions Index Index Easier Conditions US FCI Oil Augmented FCI Goldman Sachs Global Economics, Commodities and Strategy Research

9 OECD Financial Conditions Index, Jan 2000 = 100 OECD FCI Oil Augmented FCI 102 Easier Conditions Goldman Sachs Global Economics, Commodities and Strategy Research

10 UK Financial Conditions Index Index Easier Conditions UK FCI Goldman Sachs Global Economics, Commodities and Strategy Research

11 China FCI Index Easier Conditions China FCI Goldman Sachs Global Economics, Commodities and Strategy Research

12 GLI vs IP 8 4 % yoy GLI G7 IP Goldman Sachs Global Economics, Commodities and Strategy Research

13 Momentum of the GLI %mom, 3MMA Goldman Sachs Global Economics, Commodities and Strategy Research

14 Monthly Direction of GLI Components Up Business Confidence Aggregate GS Australian Dollar Trade Weighted Index S&P GS Industrial Metals Index US Initial Jobless Claims Flat Belgian Manufacturing Survey Japan IP Inventory/Sales Ratio US Durable Goods Inventory/Shipments Ratio Down Consumer Confidence Aggregate ISM New Orders Less Inventories Korean Exports Goldman Sachs Global Economics, Commodities and Strategy Research

15 Korean Exports Year on Year Since % chg February % yoy % qoq sa ann Goldman Sachs Global Economics, Commodities and Strategy Research

16 China Lead Indicators % yoy GSCA (lhs) CEMAC-GS Leading Indicator (rhs) Index 1996= Goldman Sachs Global Economics, Commodities and Strategy Research

17 BRICs Manufacturing Activity* Index Index BRICs New Orders Less Inventories (lhs) BRICs Manufacturing PMI Source: Institute of Supply Management, NTC, GS Calculations. *GDP weights Goldman Sachs Global Economics, Commodities and Strategy Research

18 Euroland Leading Indicator vs Industrial Production 4 2 qoq Euroland IP and leading indicator (3m/3m) IP, 3m/3m Leading indicator Goldman Sachs Global Economics, Commodities and Strategy Research

19 UK Services PMI 65 Index UK Services PMI Goldman Sachs Global Economics, Commodities and Strategy Research

20 BoJ Tankan %, DI BoJ Large manufacturers BoJ Large nonmanufacturers Goldman Sachs Global Economics, Commodities and Strategy Research

21 Relative Manufacturing Production 120 index Jan06= Germany Japan Korea Taiwan Goldman Sachs Global Economics, Commodities and Strategy Research

22 US House Prices vs Income Ratio 4.5 Percent House Price/Income Ratio* (left) Mortgage Rate (right, inverted) * S.a. median home price divided by median family income. Source: Department of Commerce. FRB. NAR. Goldman Sachs Global Economics, Commodities and Strategy Research

23 Share of Private Consumption in US GDP % GDP Goldman Sachs Global Economics, Commodities and Strategy Research

24 US Export and Import Growth M MA, % yoy Exports Non-oil Imports Goldman Sachs Global Economics, Commodities and Strategy Research

25 Domestic Demand and Growth Contributions, Last Decade % average contribution in USD terms Demand Contribution Growth Contribution 0 China Russia India Brazil BRICs US Euroland Goldman Sachs Global Economics, Commodities and Strategy Research

26 Retail Sales US and BRICs %yoy USA Brazil BRICs -8 Russia China India* * Private final consumption Goldman Sachs Global Economics, Commodities and Strategy Research

27 Recent Trend in Real Retail Sales USD Billion Jan 2007 Change in Real Retail Sales Since Jan U.S. China -60 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Goldman Sachs Global Economics, Commodities and Strategy Research

28 Real Retail Sales in Developed vs EM Bil$ Change in Real Retail Sales Since Jan 2007 World Advanced Emerging -60 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Source: National Sources, GS Global ECS Research. Goldman Sachs Global Economics, Commodities and Strategy Research

29 Chinese Export and Import Growth 80 %yoy, 3MMA Total Exports Total Imports Non-Commodity Imports Goldman Sachs Global Economics, Commodities and Strategy Research

30 Germany s Exports to Asia rising stabilisation elsewhere index Jan07=100 China India Russia US UK France Japan Italy Spain 60 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Source: Haver Analytics, GS calculations Goldman Sachs Global Economics, Commodities and Strategy Research

31 Consumption Contribution pps Real Contribution to World Consumption* USA Euroland EM ex BRICs BRICs *Calculated from consumer expenditure for India, US, Japan, Euroland, and other Emerging Markets. Brazil and Russia use private consumption and China uses household consumption. Annual averages , GS forecasts Goldman Sachs Global Economics, Commodities and Strategy Research

32 The Largest Economies in ,000 70,000 GDP 2007 US$bn 60,000 50,000 40,000 30,000 20,000 10,000 0 Goldman Sachs Global Economics, Commodities and Strategy Research

33 The Largest Economies in ,000 70,000 GDP 2007 US$bn 60,000 50,000 40,000 In 2050, the BRICs and N-11 will dominate 30,000 20,000 10,000 0 China United States India EU-5 Brazil Russia Indonesia Mexico United Kingdom Turkey Japan France Germany GCC Nigeria Philippines Canada Italy Korea Iran Vietnam Egypt Spain Pakistan Bangladesh Goldman Sachs Global Economics, Commodities and Strategy Research

34 BRICs & N Growth Environment Score (GES) Change 1997 GES 1997 Average Developing 2009 Average Developing Brazil China Russia India Korea Mexico Turkey Vietnam Iran Egypt Indonesia Philippines Bangladesh Nigeria Pakistan Goldman Sachs Global Economics, Commodities and Strategy Research

35 GES Scores for BRICs vs Korea Brazil China India Russia Korea Total Rule of Law Corruption Political Stability Lifeexp Inflation External Debt GovtDebt GFCF Schooling Openness Computers Mobiles Internet Goldman Sachs Global Economics, Commodities and Strategy Research

36 Maplecroft Risk Indices Dynamic Structural BRICs Brazil Russia India China N11 Bangladesh Egypt Indonesia Iran Mexico Nigeria Pakistan Philippines South Korea Turkey Vietnam USA Germany Luxembourg Source: Maplecroft Goldman Sachs Global Economics, Commodities and Strategy Research

37 Each Country s Share of Euroland GDP % Euroland GDP Country's Share of Euroland GDP (2009) 5 0 Germany France Italy Spain Netherlands Belgium Austria Greece Finland Ireland Portugal Slovakia Luxembourg Slovenia Cyprus Malta Goldman Sachs Global Economics, Commodities and Strategy Research

38 Euroland Budget Deficit and Government Debt Cyclically Adjusted Budget Deficit (%GDP)** Gross general government debt (% of GDP)*** Germany* France Italy Spain Netherlands Belgium Austria Greece Finland Ireland Portugal Slovakia *Countries listed according to their share of Euroland GDP. **Source: European Commission ***Source: Eurostat, GS estimates. Goldman Sachs Global Economics, Commodities and Strategy Research

39 Inflation Expectations in US % yoy University of Michigan 5-yr Inflation Expectations Goldman Sachs Global Economics, Commodities and Strategy Research

40 Five Year Forward Oil Price 140 $/barrel yr Forward Oil Price Goldman Sachs Global Economics, Commodities and Strategy Research

41 GSDEER Estimates for Major Countries Spot* GSDEER Q % Deviation from GSDEER 5-Yr Forecast EUR/$ $/Yen /$ $/CNY $/CAD AUD/$ $/KRW $ TWI *as of 24 March 2010 Goldman Sachs Global Economics, Commodities and Strategy Research

42 US BBoP vs Current Account % of GDP 4qtr avg Current Account BBoP Goldman Sachs Global Economics, Commodities and Strategy Research

43 BRICs BBoP vs Current Account % GDP Current Account BBoP Goldman Sachs Global Economics, Commodities and Strategy Research

44 Euroland: BBoP vs Current Account 5 4 % of GDP 12-Month Mov. Avg Current Account BBoP Goldman Sachs Global Economics, Commodities and Strategy Research

45 Japan: BBoP vs Current Account % of GDP, 12MMA Current Account -2-4 BBoP Goldman Sachs Global Economics, Commodities and Strategy Research

46 Current Estimates for the Equity Risk Premium* Real GDP Growth Real Earnings Growth + Dividend Yield = Expected Real Return - Real Bond Yield = Implied ERP Expected Inflation Expected Nominal Return US Japan UK Europe ex UK World Optimistic World *Calculated as of 24 March 2010 Goldman Sachs Global Economics, Commodities and Strategy Research

47 Trend in Forward P/Es mth forward PE United States China Japan India Europe Russia 25 Brazil Goldman Sachs Global Economics, Commodities and Strategy Research

48 Interest Rate Forecasts 3-month horizon 6-month horizon 12-month horizon Current* Forward Forecast Forward Forecast Forward Forecast US 3M Y Canada 3M Y Australia 3M Y Japan 3M Y Euroland 3M Y UK 3M Y Sweden 3M Y Switzerland 3M Y Close 24 March 10 Goldman Sachs Global Economics, Commodities and Strategy Research

49 Foreign Exchange Forecasts 3-months 6-months 12-months Current* Forward Forecast Forward Forecast Forward Forecast EUR/$ $/ EUR/ EUR/CHF CHF/ $/CHF EUR/ /$ / /CHF EUR/NOK EUR/SEK A$/$ NZ$/$ $/C$ $/CNY * Close 24 March 10 Goldman Sachs Global Economics, Commodities and Strategy Research

50 Top Trades for 2010 Trade Entry Level Target 1. Short S&P 500 Dec10/Dec11 Forward Starting Variance Swap Long Russian Equities (RDXUSD) Long GBP/NZD Pay UK Rates vs. Receiving AUD Rates via 1-yr Forward 2-yr Swaps bp -150bp 5. Pay 2y Rates in Turkey 8.77% 12.00% 6. Long Credit Protection on Spain, Short Credit Protection on Ireland 70.2bp 20bp 7. Long 'Growth' FX Current Long PLN/JPY Goldman Sachs Global Economics, Commodities and Strategy Research

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