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Key Data Preview Chart 15: Eurozone M3 & Bank Lending (% y/y) 12.5 10.0 7.5 5.0 2.5 0.0 Private Sector Bank Lending M3 -2.5 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Source: Reuters EcoWin Pro % y/y Dec (f) Nov Oct Sep M3 2.0 1.9 0.9 1.1 M3 (3-mth Avg.) 1.6 1.3 1.0 0.8 Private Sector Loans 2.3 2.0 1.5 1.3 Key Point: Rates of growth in M3 and bank lending are low by past standards but are trending higher. BNP Paribas Forecast: Low But Rising Eurozone: Monetary Developments (December) Release Date: Friday 28 January The y/y growth rate in M3 accelerated to its strongest level in fifteen months in November, rising from 0.9% to 1.9%. This was driven, in part, by base effects. The three-month average y/y rate of growth rose for the seventh successive month but to a less elevated 1.3%. The y/y growth rate in private sector bank lending rose to a 20-month high in November, from 1.5% to 2.0%. The m/m rise of 0.7% was the biggest since before the intensification of the financial crisis (March 2008 to be precise). The y/y rate of change is almost three percentage points above its trough in October 2009 (of -0.8%). Loans to households have been the main driver of the pickup, though the rate of growth has lost some momentum in recent months. The y/y rate of increase slipped to 2.7% in November and has been going sideways for the past three quarters. Lending for mortgages has been robust, rising by over 3% y/y since May 2010, while consumer credit has continued to contract on a y/y basis. Lending to the non-financial corporate sector is lagging that for households, as is typically the case. The rate of decline has moderated, however, to -0.1% y/y in November. Looking beyond special factors, the ECB continues to view M3 and lending growth rates as “low”. Source: Reuters EcoWin Pro Chart 16: US: Final Demand Q4 (a) Q3 Q2 Q1 GDP % q/q AR 2.9 2.6 1.7 3.7 GDP Deflator % q/q AR 1.5 2.1 1.9 1.0 Key Point: The moderate 2.9% q/q saar gain in overall GDP we expect would reflect a 4.4% surge in final demand and a 1.5pp drag from inventories. BNP Paribas Forecast: Strong Final Demand US: GDP (Q3a 2010) Release Date: Friday 29 October GDP is forecast to grow 2.9% q/q saar in Q4, up from 2.6% in Q3. The tone of the report should be much stronger than the headline suggests, however, as inventories are expected to subtract 1.5pp from growth while final demand is forecast to surge 4.4%. The reading would represent the first time since the recovery began that final demand grew at a pace above the economy’s potential (see chart). For the year as a whole, final demand will have risen 1.9%. Trade is expected to contribute 1.7pp to growth after subtracting an average 2.6pp over the prior two quarters. Consumer spending is also expected to surge 3.5%, on strong holiday spending. Meanwhile, government should be subdued as contraction in state and local government spending nearly offsets surging federal outlays on defence. Equipment and software spending is expected to grow at a more moderate pace while both commercial and residential real estate should post modest declines. The GDP deflator is expected to rise 1.5%, which would lead to reasonably healthy nominal GDP growth of 4.4%, similar to the prior quarter. Market Economics 20 January 2011 Market Mover 78 www.GlobalMarkets.bnpparibas.com
Economic Calendar: 31 Jan – 25 Feb 31 January 1 February 2 February 3 February 4 February Japan: IP Dec, Housing Starts Dec Eurozone: HICP (Flash) Jan UK: GfK Consumer Confidence Jan Italy: PPI Dec Spain: HICP (Flash) Jan Norway: Retail Sales Dec US: Personal Income & Spending Dec, Chicago PMI Jan Canada: GDP Nov Market Economics 20 January 2011 Market Mover Australia: RBA Rate Announcement, NAB Business Conditions Dec Eurozone: Labour Dec, Manufacturing PMI (Final) Jan UK: CIPS Manu Jan, Net Consumer Credit Dec, Mortgage Approvals Dec Germany: Labour Dec France: PPI Dec US: Construction Dec, ISM Manufacturing Jan Eurozone: PPI Dec Norway: Labour Nov US: Challenger Job Losses Jan, ADP Labour Jan Australia: Trade Balance Dec Eurozone: ECB Rate Announcement & Press Conference, Retail Sales Dec, Services PMI (Final) Jan UK: CIPS Services (Final) Jan US: Productivity & Costs (Prel) Q4, Factory Orders Dec, ISM Services Jan Italy: CPI (Prel) Feb Spain: Industrial Production Dec US: Labour Jan Canada: Labour Jan During Week: Germany Retail Sales Dec, UK Halifax House Prices Jan 7 February 8 February 9 February 10 February 11 February Australia: Retail Sales Dec Japan: Leading Indicator Dec Germany: Factory Orders Dec Norway: Industrial Production Dec US: Consumer Credit Dec Japan: M2 Jan, Current Account Dec UK: BRC Retail Sales Monitor Jan, RICS House Prices Jan Germany: Industrial Production Dec France: BoF Survey Jan, Trade Balance Dec, Budget Balance Dec Neths: IP Dec US: NFIB Small Business Optimism Jan Australia: Westpac Consumer Confidence Feb UK: Trade Balance Dec Germany: Trade Balance Dec France: Investment Survey Jan Australia: Labour Jan Japan: CGPI Jan, Machinery Orders Dec Eurozone: ECB Bulletin UK: BoE Rate Ann, IP Dec France: IP Dec Italy: IP Dec Sweden: IP Dec Norway: CPI Jan, PPI Jan Neths: CPI Jan Switz: CPI Jan US: Wholesale Inv Dec, Treasury Statement Jan UK: PPI Jan Germany: HICP Jan France: Current Account Dec, Non-Farm Payrolls (Prel) Q4, Wages (Prel) Q4 Spain: GDP (Flash) Q4 Sweden: AMV Labour Jan US: Trade Balance Dec, UoM Sentiment (Prel) Feb During Week: Germany WPI Jan 14 February 15 February 16 February 17 February 18 February Eurozone: Industrial Production Dec Australia: NAB Business Conditions Jan Eurozone: GDP (Flash) Q4, Trade Balance Dec UK: DCLG House Prices Dec, CPI Jan Germany: GDP (Flash) Q4, ZEW Survey Feb France: GDP (Prel) Q4 Italy: Trade Balance Dec Spain: HICP Jan Sweden: Rate Ann Neths: GDP (Prel) Q4, Retail Sales Dec US: Empire State Survey Feb, Retail Sales Jan, Import Prices Jan, TICS Data Dec, Business Inventories Dec, NAHB Housing Market Feb UK: Labour Dec, BoE Inflation Report Spain: GDP (Final) Q4 Belgium: GDP (Flash) Q4 US: New Home Starts Jan, PPI Jan, Industrial Production Jan, FOMC Minutes Eurozone: Current Account Dec, ECB Governing Council Meeting (No Rate Announcement) Sweden: CPI Jan, Labour Jan Norway: GDP Q4 Neths: Labour Jan US: CPI Jan, Philly Fed Feb, Leading Indicators Jan UK: Retail Sales Jan Germany: PPI Jan Italy: Non-EU Trade Balance Jan Belgium: Consumer Confidence Feb Neths: Consumer Confidence Feb Canada: CPI Jan 21 February 22 February 23 February 24 February 25 February UK: Rightmove House Prices Feb, PSNB Jan, PSNCR Jan Eurozone: PMIs (Flash) Feb Germany: Ifo Survey Jan Neths: Producer Confidence Feb US: Public Holiday Japan: BoJ Monetary Policy Meeting Minutes France: Housing Starts Jan, Industry Survey Feb Belgium: Business Confidence Feb US: S&P/Case-Shiller House Prices Dec, Consumer Confidence Feb Japan: Trade Balance Jan Australia: Wage Cost Index Q4 Eurozone: Industrial Orders Dec UK: BoE Minutes France: CPI Jan Italy: CPI Jan Norway: Labour Dec US: Existing Home Sales Jan During Week: Germany Import Price Index Jan, GfK Consumer Confidence Mar Source: BNP Paribas Eurozone: Business & Consumer Survey Feb Germany: GDP (Final) Q4 France: Consumer Confidence Feb, Job Seekers Jan Italy: Retail Sales Dec Sweden: Consumer Confidence Feb US: Durable Goods Orders Jan, FHFA House Prices Dec, New Home Sales Jan Release dates as at c.o.b. prior to the date of this publication. See our Daily Spotlight for any revisions 79 Japan: CPI Tokyo Feb, CPI National Jan Eurozone: Monetary Developments Jan, Eurocoin Feb UK: GDP (Prel) Q4 Germany: HICP (Prel) Feb France: Retail Sales Jan Spain: PPI Jan Belgium: CPI Feb Switz: KOF Leading Indicator Feb US: GDP (2 nd Est) Q4, UoM Sentiment (Final) Feb www.GlobalMarkets.bnpparibas.com
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Market Economics | Interest Rate St
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The obvious focal point is the Summ
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such shocks at the moment, such as
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US monetary conditions, because the
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Chart 9: Asia- Ifo Expected Inflati
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President Bullard was generally sup
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Canada: Betting on Investment and E
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Eurozone Inflation: Forecast Revisi
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optimism on Germany, in last week
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On the basis of the relationship be
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The nominal policy rate and nominal
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households. Furthermore, the statis
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Norway: Norges Bank Preview • We
Page 27 and 28: Japan: New Cabinet and Policy Outlo
Page 29 and 30: Japan: Capex Outlook • Core machi
Page 31 and 32: US/EUR Spreads: Further Tightening
Page 33 and 34: US: Could the Short End Have a Puls
Page 35 and 36: Trades with higher hit ratio and Sh
Page 37 and 38: ange bound, as we expect, given tha
Page 39 and 40: EUR: Liquidity is No Stress • The
Page 41 and 42: EMU Debt Monitor: Trade Ideas • K
Page 43 and 44: EMU Debt Monitor: CDS Analysis Char
Page 45 and 46: EMU Debt Monitor: Redemptions • O
Page 47 and 48: EUR: Buy 3m5y Straddle vs 3m10y Str
Page 49 and 50: Global Inflation Watch Eurozone HIC
Page 51 and 52: Table 2: BNP Paribas' Inflation For
Page 53 and 54: Inflation: With Supply Comes Opport
Page 55 and 56: Pricing Date Repo Rate Sett. Date T
Page 57 and 58: Germany 10y: MT 61.8% (3.12) break
Page 59 and 60: Travelling Asia • Inflation has e
Page 61 and 62: Capitalism requires business cycles
Page 63 and 64: EURUSD Rally Eyes 1.3750-1.3950 •
Page 65 and 66: Currency Spot Trade Recommendations
Page 67 and 68: than an unrelenting rise in prices
Page 69 and 70: Economic Calendar: 21 - 28 January
Page 71 and 72: Key Data Preview 120 115 110 105 10
Page 73 and 74: Key Data Preview Chart 5: French Sa
Page 75 and 76: Key Data Preview 10 5 0 -5 -10 -15
Page 77: Key Data Preview 3 2 1 0 -1 Chart 1
Page 81 and 82: Next Week's T-Bills Supply Date Cou
Page 83 and 84: Economic Forecasts GDP Year 2010 20
Page 85 and 86: Market Coverage Market Economics Pa
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