WEEKLY NEWSLETTER Fewer Key Rate Hikes in 2019 #1 BEST OVERALL FORECASTER - CANADA HIGHLIGHTS ff United States: Washington s partial budget standoff interferes with the release of economic indicators. ff United States: Gasoline prices cause consumer prices to fall. ff United States: The ISM non-manufacturing index also drops. ff The Bank of Canada maintains the status quo. ff Canada: Exports were down sharply in November. ff Canada: The number of housing starts remains fairly high. A LOOK AHEAD ff If they are released, U.S. retail sales figures should show modest growth in December. ff Canada: Falling gasoline prices are expected to continue to impact inflation. FINANCIAL MARKETS ff Stock markets are posting considerable gains. ff Central banks cautious tone is weakening bond yields. ff The Canadian dollar rebounded after a difficult year end. CONTENTS Key Statistics of the Week... 2 United States, Canada A Look Ahead... 4 United States, Canada, Overseas Financial Markets... 3 Economic Indicators of the Week... 6 Tables Economic indicators... 8 Major financial indicators...10 François Dupuis, Vice-President and Chief Economist Mathieu D Anjou, Deputy Chief Economist Carine Bergevin-Chammah, Economist Benoit P. Durocher, Senior Economist Francis Généreux, Senior Economist Hendrix Vachon, Senior Economist Desjardins, Economic Studies: 514 281 2336 or 1 866 866 7000, ext. 5552336 desjardins.economics@desjardins.com desjardins.com/economics NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright 2019, Desjardins Group. All rights reserved.
Key Statistics of the Week UNITED STATES CANADA ff In December, the total consumer price index (CPI) saw a monthly decrease of 0.1%, the first since last March. Gasoline prices dropped 7.5%. Fuel oil prices plunged 11.4%. Excluding energy and food (which rose 0.4%), the core CPI advanced, just as it did in the two previous months. Clothing and new motor vehicle prices stagnated. The annual change (December to December) in the CPI slowed, falling from % to %. This is the first time since September 2017 that inflation dropped below 2%. Core inflation, which excludes food and energy, continued to hold at %. The average annual rate of total inflation touched 2.4% in 2018, while the core rate reached %. ff As expected, the Bank of Canada (BoC) has not only maintaining the status quo on its key rates, but it has also revising its economic forecasts downwards for the short term. Given the difficulties in the energy sector, along with the slowdown in the housing market and in consumer spending, the BoC lowered its growth outlook for the fourth quarter of 2018 and the first quarter of 2019. All that remains now is to understand to what extent all these factors will actually affect the Canadian economy. The authorities are continuing to signal their intention to hike key rates. However, there is every indication that the status quo will continue for a few months more while the true extent of the difficulties expected in late 2018/early 2019 is being properly assessed. We believe that the window of opportunity for a new hike may not open again before July 2019. Still, an earlier increase cannot be completely ruled out if the Canadian economy were to perform better than expected. ff After the sharp drop in the ISM manufacturing index in December, the non-manufacturing index also declined, falling from 6 to 57.6. However, this 3.1 point drop is more modest than the 5.2-point decrease recorded by the manufacturing index. December saw the non-manufacturing index post its lowest level since July. The components that declined the most are prices paid, inventories, current production and order backlogs. New orders rose points. Francis Généreux, Senior economist ff The value of merchandise exports declined 2.9% in November due to a major decrease in energy products resulting from the difficulties this industry experienced during the period. That being said, several other sectors also posted declines during the month, all of which paints a fairly gloomy picture. The value of imports dipped 0.5% in November. As a result, the trade balance went from -$0.85B to -$2.06B. In real terms, exports declined 1.5%, while imports dipped 0.1%. The balance rose $0.58B (2012 dollars), i.e., a deterioration of -$4B (2012 dollars) compared with the previous month. ff The number of housing starts remained fairly high in December, with 213,349 units compared to 224,349 in November. British Columbia, in particular, saw a significant gain during the month. At 50,873 units, the number of housing starts was the highest recorded there since the end of 2017. Benoit P. Durocher, Senior economist 2
Financial Markets Stock Markets Start the Year Off on a Strong Note Stock markets have reversed their year-end downtrend. Good job numbers and wage growth in the United States reassured investors last Friday. The markets also welcomed the cautious remarks of Federal Reserve (Fed) officials signalling fewer interest rate hikes in 2019. Encouraging signs from negotiations between China and the United States are providing another significant boost to the markets. A slight dip appeared Friday morning, but the S&P 500 has nonetheless posted a year-to-date gain of more than 3%. The Canadian stock market, sensitive to the performance of oil prices, saw a slightly higher increase. The price of a WTI (West Texas Intermediate) oil barrel is back to over US$50, aided by Saudi output cuts and lower crude stocks in the United States. Friday morning, the Canadian S&P/TSX stock index rose more than 4% from the start of the year. GRAPH 1 Stock markets Index Index 2,850 15,300 2,775 15,100 2,700 14,900 14,700 2,625 14,500 2,550 14,300 2,475 14,100 2,400 13,900 2,325 13,700 2018/11/29 2018/12/07 2018/12/17 2018/12/25 2019/01/02 2019/01/10 S&P 500 (left) S&P/TSX (right) Sources: Datastream and Desjardins, Economic Studies Despite the return of some risk appetite, Canadian and U.S. bond yields have remained relatively low, near their year-end levels. The weak yields may be the result of the slower pace of monetary tightening signalled by officials at the Fed and the Bank of Canada (BoC). In the United States, the 2 year and 10 year bond yields were around 5% and 2.70%, respectively, at the time of writing. Canadian yields, meanwhile, were around 5% for the 2 year and 5% for the 10 year. A lot of movement has been observed in major currencies at the start of the year. The U.S. dollar took a hit due to lower monetary tightening expectations in the United States and weaker demand for safe-haven assets. Demand for the yen, another safe-haven currency, continues to be quite strong nonetheless, keeping the Japanese exchange rate below the 110/US$ mark. The euro climbed to roughly US$5. Poor industrial production figures in Germany, France and Italy do not appear to have had too great of an impact on the currency, which is benefiting primarily from the weak U.S. dollar. Despite a more cautious BoC, the Canadian dollar has seen a considerable rebound since January 3rd. The loonie is currently hovering around US$55, buoyed by higher oil prices and renewed appetite for risk. Hendrix Vachon, Senior Economist Carine Bergevin-Chammah, Economist GRAPH 2 Bond markets 10-year yield In % points -5 In % 3.2-0 -5 2.4-0.80 2.0-0.85 2018/11/29 2018/12/07 Spread (left) 2018/12/17 2018/12/25 United States (right) 2019/01/02 2019/01/10 Canada (right) Sources: Datastream and Desjardins, Economic Studies GRAPH 3 Currency markets US$/C$ US$/ 60 55 55 50 50 45 45 40 40 35 35 30 29/11/2018 30 07/12/2018 17/12/2018 25/12/2018 Canadian dollar (left) 02/01/2019 10/01/2019 Euro (right) Sources: Datastream and Desjardins, Economic Studies 3
A Look Ahead UNITED STATES * Due to the federal government shutdown in the United States, some indicators may not be released as scheduled. WEDNESDAY January 16 - December m/m Desjardins November * Retail sales (December) Up, retail sales in November were slightly stronger than the consensus expected, but it was October s data revised upward that was truly good news. Growth in December is expected to resemble November s. On the one hand, motor vehicle sales should be slightly in the black, if the figures for new vehicle sales released earlier in the month are to be believed. On the other hand, the 10% drop in gasoline prices at the pump is expected to cause service station sales figures to fall. Excluding motor vehicles and gasoline, growth may be a little weaker than the 0.5% recorded in November. Some major retailers posted disappointing sales during the Christmas holidays. Yet the mild weather probably helped the food services sector, which had had a few difficult months. The creation of 23,800 retail jobs was also a positive factor. All in all, total sales are forecast to rise, and sales excluding motor vehicles and gas are expected to gain 0.4%. THURSDAY January 17 - December ann. rate 1,256,000 Desjardins 1,285,000 November 1,256,000 * Housing starts (December) After two consecutive months of declines, housing starts regained some lost ground in November. Another increase is expected in December. With 1,328,000 units in November, the building permit numbers suggest some improvement. In addition, 4,600 jobs were created in residential construction. Nonetheless, builder confidence fell recently (January s data will be released Wednesday), and several housing-market indicators continue to follow a downward trajectory. Housing starts are expected to reach 1,285,000 units in December. FRIDAY January 18-9:15 December Desjardins November Industrial production (December) Industrial production rose % in November, thanks, in large part, to a 3.3% jump in energy production. The milder temperatures in December probably caused energy output to slide. As a result, a drop of nearly 3% is expected on this front, which will weigh heavily on any improvements in industrial production. Once again, the mining sector should see good monthly growth. As for manufacturing, the hours worked are a positive sign, but the 6.3 point drop in the current production component of the ISM manufacturing index casts some doubt on December posting very strong growth. We expect a 0.5% increase in manufacturing. Overall, industrial production should be up. FRIDAY January 18-10:00 January Desjardins December m/m % 96.0 96.0 98.3 University of Michigan consumer confidence index (January preliminary) Surprisingly, the University of Michigan index rose in December while most of the other confidence indicators fell; a continuation of this improvement in January would be surprising. Stock market trends (despite the rebound at the start of the year) and the changes in the other confidence indexes point to a deterioration instead. The partial shutdown of the federal government also threatens to shake Americans confidence. However, lower gasoline prices in recent weeks are a positive factor. All things considered, the University of Michigan index should drop back to 96.0. CANADA FRIDAY January 18 - December m/m -% Desjardins -% November -0.4% Consumer price index (December) For the sixth time in the last seven months, pump readings indicate a drop in the average price of regular gasoline. The index fell 6.3% in December after plunging 9.9% in November. This should cause the monthly change in the total consumer price index (CPI) to decline about for the month. Added to this will be a seasonal adjustment, usually to the tune of approximately -0.5% in December, due to a significant drop in the cost of clothing. Even if the other components are expected to trend upward, December may end with a monthly change in total CPI of roughly -%. The total annual inflation rate could drop from 1.7% to 1.5%. 4
OVERSEAS MONDAY January 14-5:00 November m/m -1.3% October : Industrial production (November) For the first time since the summer of 2017, Euroland s industrial production rose two months in a row. Therefore, another gain in November, after the rise recorded in October, would be surprising. In addition, the data coming out of the major countries is definitely pointing downward. German industrial production fell % in December while France s shrunk 1.3%. Therefore, the data for all of Euroland is also expected to show a contraction. In terms of annual change, production plunged from a high of 5.0% in December 2017 to a low of 1.2% in October 2018 and it risks sliding into negative territory as early as November. Of all the other major indicators released this week in the euro zone, the one to watch on Tuesday will be the trade balance for the month of November. The final version of the consumer price index for December will be released on Thursday. An advance estimate of real GDP growth in Germany in 2018 will also be released on Tuesday. 5
Economic Indicators Week of January 14 to 18, 2019 Day Hour Indicator Period Previous data UNITED STATES * Due to the federal government shutdown in the United States, some indicators may not be released as scheduled. MONDAY 14 TUESDAY 15 Producer price index Total (m/m) Excluding food and energy (m/m) Empire manufacturing index 13:00 Speech of the Kansas City Fed President, E. George WEDNESDAY 16 Export prices (m/m) Import prices (m/m) * Retail sales Total (m/m) Excluding automobiles (m/m) 10:00 NAHB housing market index 10:00 * Business inventories (m/m) 14:00 Release of the Beige Book 16:00 * Net foreign security purchases (US$B) 1 Speech of the Minneapolis Fed President, N. Kashkari THURSDAY 17 Initial unemployment claims * Housing starts (ann. rate) * Building permits (ann. rate) FRIDAY 18 9:05 9:15 9:15 10:00 Speech of the New York Fed President, J. Williams Industrial production (m/m) Production capacity utilization rates Michigan s consumer sentiment index preliminary Jan. % 12.0-1 0.1% % 1 -% -1.3% -0..7% -1.0% -% -1.6% Jan. 0.1% 56 % 0.1% 56 % 31.3 223,000 1,256,000 1,288,000 218,000 1,285,000 1,300,000 216,000 1,256,000 1,328,000 78.5% 96.0 78.5% 96.0 % 78.5% 98.3 -% 1.7% -% -0.4% 1.5% % 2.00-0.4% -% 1.7% 1.7% 3.98 Jan. 7-11 Jan. CANADA MONDAY 14 TUESDAY 15 9:00 --Existing home sales WEDNESDAY 16 THURSDAY 17 FRIDAY 18 Consumer price index Total (m/m) Excluding food and energy (m/m) Total (y/y) Excluding food and energy (y/y) International transactions in securities ($B) Note: Desjardins, Economic Studies are involved every week in the Bloomberg survey for Canada and the United States. Approximately 15 economists are consulted for the Canadian survey and a hundred or so for the United States. The abbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. Following the quarter, the abbreviations f, s and t correspond to first estimate, second estimate and third estimate respectively. The times shown are Eastern Standard Time (GMT - 5 hours). Forecast of Desjardins, Economic Studies of the Desjardins Group. 6
Economic Indicators Week of January 14 to 18, 2019 Country Hour Indicator Period m/m (q/q) y/y Previous data m/m (q/q) y/y OVERSEAS SUNDAY 13 China Trade balance (US$B) 51.60 44.74 MONDAY 14 5:00 Industrial production -1.3% 1.2% TUESDAY 15 France Germany Japan Japan 2:45 4:00 5:00 18:50 23:30 Consumer price index final Real GDP estimate Trade balance ( B) Producer price index Tertiary industry activity index 0.0% 1.6% 0.0% 2018 1.5% 1 1 -% % -% -0.5% % 1.6% % WEDNESDAY 16 Germany United Kingdom United Kingdom 2:00 4:30 4:30 Consumer price index final Consumer price index Producer price index 0.1% 1.7% 2.3% 3.1% THURSDAY 17 Italy Japan Japan 4:00 5:00 5:00 1 23:30 Trade balance ( M) Construction Consumer price index Consumer price index Industrial production final 3,784-1.6% 0.0% 1.6% - % -% % % 0.8% 1.4% FRIDAY 18 Italy United Kingdom 4:00 4:00 4:30 Current account ( B) Current account ( M) Retail sales 3.6% 0.1% 0.0% -% 1.7% % 2.9% -0.8% 3.5% 2 6,081 1.4% 2.3% Note: In contrast to the situation in Canada and the United States, disclosure of overseas economic fi gures is much more approximate. The day of publication is therefore shown for information purposes only. The abbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. The times shown are Eastern Standard Time (GMT - 5 hours). 7
UNITED STATES Quarterly economic indicators REF. QUART. Gross domestic product (2009 $B) Consumption (2009 $B) Government spending (2009 $B) Residential investment (2009 $B) Non-residential investment (2009 $B) Business inventory change (2009 $B)1 Exports (2009 $B) Imports (2009 $B) Final domestic demand (2009 $B) GDP deflator (2009 = 100) Labor productivity (2009 = 100) Unit labor cost (2009 = 100) Employment cost index ( 2005 = 100) Current account balance ($B)1 1 VARIATION (%) LEVEL ANNUAL VARIATION (%) Quart. ann. 1 year 2017 2016 2015 3.4 3.5-3.6 4.9 9.3 2.9 2.3 2.9 2.3 0.5 6.8 --3.5 5.8 3.2 2.3 1.3 3.3 5.3 2 4.6-449.1 1.6 2.7 1.4 6.5 0.5 23.4 2.3 0.1-432.9 2.9 3.7 10.1 129.0 5.5 3.3 1.0 1.3 1.7-407.8 18,665 12,953 3,192 607.7 2,727 89.8 2,542 3,492 19,472 11 105.7 109.0 134.3-124.8 Statistics representing the level during the period; * New statistic in comparison with last week. UNITED STATES Monthly economic indicators REF. MONTH Leading indicator (2010 = 100) ISM manufacturing index1 ISM non-manufacturing index1 Cons. confidence Conference Board (1985 = 100)1 Personal consumption expenditure (2009 $B) Disposable personal income (2009 $B) Consumer credit ($B) Retail sales ($M) Excluding automobiles ($M) Industrial production (2007 = 100) Production capacity utilization rate (%)1 New machinery orders ($M) New durable good orders ($M) Business inventories ($B) Housing starts (k)1 Building permits (k)1 New home sales (k)1 Existing home sales (k)1 Commercial surplus ($M)1 Nonfarm employment (k)2 Unemployment rate (%)1 Consumer price (1982 1984 = 100) Excluding food and energy Personal cons. expenditure deflator (2009 = 100) Excluding food and energy Producer price (2009 = 100) Export prices (2000 = 100) Import prices (2000 = 100) 1 VARIATION (%) LEVEL -1 month -3 months -6 months -1 year * * * * * * 11 54.1 57.6 128.1 13,083 14,461 3,979 513,531 59.3 6 136.4 0.5 59.8 61.6 135.3 1.4 6 59.1 127.1 1.3 5.2 59.3 56.0 123.1 4.3 4.2 409,827 1.0 4.9 * * * * 109.4 78.5 502,677 250,827 1,982 1,256 1,328 544.0 5,320-55,488 150,263 3.9 252.7 78.1-0.8 1,217 1,265 597.0 5,220-54,555 312.0 3.7 78.5 0.8-3.6 1.6 1,280 1,249 606.0 5,330-50,416 762.0 3.7 2.4 77.5 1.3 2.7 1,329 1,301 63 5,410-45,698 1,332 4.0 3.9 77.1 6.9 5.3 5.2 1,303 1,323 618.0 5,720-46,986 2,638 4.1 * 260.0 * 108.9 0.1 0.4 * 11 0.1 0.4 117.3 126.8 126.2 0.1 - -1.6-0.4-1.0-0.8-1.6 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week. 8
CANADA Quarterly economic indicators REF. QUART. Gross domestic product (2007 $M) Household consumption (2007 $M) Government consumption (2007 $M) Residential investment (2007 $M) Non-residential investment (2007 $M) VARIATION (%) LEVEL ANNUAL VARIATION (%) Quart. ann. 1 year 2017 2016 2015 Current account balance ($M)1 2,059,104 1,161,382 417,220 139,442 191,268 6,608 659,560 658,581 2,048,427 108.9 105.7 105.6-10,343 2.0 1.2-5.9-7.1 -- -7.8-3.4 --5.4 2.4 1.0 1.5 3.6 2.4 17,582 4.2 3.1-60,130 3.5-9.9 2,291 1.3 0.0-1.6-64,882 1.4 3.8-11.3 2,532 3.4-1.0-0.8-70,537 Production capacity utilization rate (%)1 Disposable personal income ($M) Corporate net operating surplus (2007 $M) 8 1,230,932 302,352 -- 19.0 --3.3 8.8 81.6 4.6 20.1 79.2 6.4 80.4 4.5-24.0 Business inventory change (2007 $M)1 Exports (2007 $M) Imports (2007 $M) Final domestic demand (2007 $M) GDP deflator (2007 = 100) Labour productivity (2007 = 100) Unit labour cost (2007 = 100) 1 Statistics representing the level during the period; * New statistic in comparison with last week. CANADA Monthly economic indicators REF. MONTH Gross domestic product (2007 $M) Industrial production (2007 $M) Manufacturing sales ($M) Housing starts (k)1 Building permits ($M) Retail sales ($M) Excluding automobiles ($M) Wholesale trade sales ($M) Commercial surplus ($M)1 Exports ($M) Imports ($M) Employment (k)2 1 Unemployment rate (%) Average weekly earnings ($) Number of salaried employees (k)2 Consumer price (2002 = 100) Excluding food and energy Excluding 8 volatile items Industrial product price (2002 = 100) Raw materials price (2002 = 100) Money supply M1+ ($M) 1 VARIATION (%) LEVEL -1 month -3 months -6 months -1 year * * * * * 1,945,864 403,639 58,247 213.4 8,294 51,012 224.3 - -0.5 19 3.2 0.4 2.9 245.6-0.4 3.8 8.0 212.7 6.6 * 37,222 0.0-0.4 2.0 * 63,833-2,060 1.0-85 -623.6 1.4-2,951 2.7-2,942 * * 48,329 50,390-2.9-0.5-4.3-1.4 - -2.4 4.4 2.4 * 18,808 9.3 38.2 30.1 13.6 * 5.6 1,009 16,749 133.5 5.6 4-0.4 5.9 38.7-0.5 6.0 1.5 34.4 0.1 5.8 31.7 1.7 128.4 13 - - 0.5 1.7 1.5 * * * 118.1 94.8 1,001,740-0.8-11.7 0.8-0.5-14.7 1.5 - -17.6-9.9 4.7 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week. 9
UNITED STATES, CANADA, OVERSEAS Major financial indicators PREVIOUS DATA ACTUAL LAST 52 WEEKS IN % (EXPECTED IF INDICATED) Jan. 11 Jan. 4-1 month -3 months -6 months -1 year Higher Average Lower United States Federal funds target Treasury bill 3 months Treasury bonds 2 years Treasury bonds 5 years Treasury bonds 10 years Treasury bonds 30 years S&P 500 index (level) DJIA index (level) Gold price (US$/ounce) CRB index (level) WTI oil (US$/barrel) 0 2.42 4 2 9 2 2,585 23,885 1,290 178.48 55 0 2.37 2.49 2.49 6 2.97 2,532 23,433 1,283 173.36 47.76 5 2.37 2.73 2.73 9 3.14 2,600 24,101 1,239 181 51.26 5 3 6 2 3.17 3.34 2,767 25,340 1,219 197.94 71.41 2.00 4 8 2.72 3 2.93 2,801 25,019 1,242 193.73 71.03 1.50 1.41 2.01 2.35 5 5 2,786 25,803 1,331 196.06 64.22 0 2.42 2.97 9 3.23 3.45 2,931 26,828 1,359 206.38 77.41 4 7 5 2.76 2.92 3.12 2,737 24,978 1,268 196 64.49 1.50 1.39 2.01 2.35 5 4 2,351 21,792 1,179 168.36 44.48 Canada Overnight target Treasury bill 3 months Treasury bonds 2 years Treasury bonds 5 years Treasury bonds 10 years Treasury bonds 30 years 1.75 1.62 8 9 5 6 1.75 1.62 4 4 2 3 1.75 1.64 2.02 2.04 0 8 1.50 1.54 7 2.38 2.49 0 1.50 1.42 2 2.05 4 9 1.00 5 1.76 7 8 2.37 1.75 1.73 2.36 2.48 0 8 1.43 1.39 9 5 7 2.35 1.00 1.06 1.75 1.76 3 2.07 Spread with the U.S. rate (% points) Overnight target -5 Treasury bill 3 months -0.80 Treasury bonds 2 years -5 Treasury bonds 5 years -3 Treasury bonds 10 years -4 Treasury bonds 30 years -0.87-5 -5-5 -5-4 -0.84-0.50-3 -1-9 -9-0.86-5 -9-0.59-4 -8-0.84-0.50-0.52-6 -7-9 -4-0.50-6 -5-8 -7-0.48-5 9-4 -6-6 -0.48-0.51-0.58-0.55-1 -5-7 -5-0.80-7 -9-0.82-4 S&P/TSX index (level) Exchange rate (C$/US$) Exchange rate (C$/ ) 14,898 1.3257 1.5212 14,427 1.3374 1.5240 14,595 1.3384 1.5137 15,414 1.3023 1.5058 16,561 1.3161 1.5379 16,308 1.2457 1.5181 16,567 1.3639 1.6130 15,675 1.2993 1.5308 13,780 1.2268 1.4771 Overseas ECB Refinancing rate Exchange rate (US$/ ) 474 395 310 563 686 1.2187 1.2510 788 218 United Kingdom BoE Base rate Bonds 10 years FTSE index (level) Exchange rate (US$/ ) 5 1.29 6,915 1.2827 5 1.27 6,837 1.2728 5 1.24 6,845 1.2584 5 1.64 6,996 1.3156 0.50 1.33 7,662 1.3235 0.50 1.38 7,779 1.3730 5 1.72 7,877 1.4338 1 1.42 7,327 1.3321 0.50 8 6,585 1.2486 Germany Bonds 10 years DAX index (level) 4 10,887 1 10,768 5 10,866 0.50 11,524 8 12,541 0.53 13,245 2 13,560 0.44 12,162 0.15 10,382 Japan BoJ Main policy rate Nikkei index (level) Exchange rate (US$/ ) 20,360 108.35 19,562 108.53 21,375 113.39 22,695 111 22,597 112.38 23,654 111.04 24,271 114.54 22,193 113 19,156 104.74 CRB: Commodity Research Bureau; WTI: West Texas Intermediate; ECB: European Central Bank; BoE: Bank of England; BoJ: Bank of Japan Note: Data taken at markets closing, with the exeption of the current day where they were taken at 11:00 a.m. 10