bnp paribas ecoweek_15 28 en

economic-research.bnpparibas.com

/// 24 July 2015 /// 15-28

Once again, the headlines are riveted on Europe. The Greek Parliament approved the second round of measures paving the way for the opening of negotiations on a third bailout plan (see Greece: a busy calendar). The EMS confirmed an agreement in principle and Alexis Tsipras expressed hopes that a definitive agreement could be reached by 20 August. The ECB raised its ceiling on ELA emergency liquidity assistance by EUR 900 m, and Greek banks reopened, although capital controls remain in place. As the Greek crisis becomes less tense, another risk is removed from eurozone growth, which boasts numerous support factors (see Eurozone: consolidating the rally). Short-term prospects are upbeat, but longer-term risks persist. There needs to be more convergence between member countries to foster self-sustaining growth. In this respect, high hopes have been placed on the Juncker Plan, which was definitively launched this week: the European Fund for Strategic Investments (EFSI) will be operational as of early fall. Europe must also work towards greater fiscal integration, which President Hollande confirmed by calling for a eurozone government. Against this backdrop, a powerful voice joined the ongoing debate over the UKs membership in the European Union: none other than President Obama is urging the British to decide to stay in the EU, to preserve its influence on the world stage and its relations with America.

Summary

Eurozone Consolidating the rally Growth prospects continue to look upbeat in the eurozone, with numerous support factors. This cyclical analysis should not be allowed to mask the enormous challenges that persist in the longer term. Page 2

Greece A busy agenda This week the Greek government repaid the ECB and the IMF, and approved the second set of measures demanded by creditors as a precondition for negotiations. Talks can now begin on a third bailout plan. Finding a suitable compromise promises to be tough. Page 4

Economic indicators Page 5

Detailed forecasts Page 6

Market overview Page 7

Also in

Europe, from Athens to London The Greek situation advancesThe Juncker Plan too Obama urges the British to stay in the EU

LIQUIDITY PROVISION TO GREEK BANKS

Liquidity provision from the Eurosystem, EUR bn MRO ; LTRO ; ELA

Source: Bank of Greece

THE WEEK ON THE MARKETS

Source: Thomson Datastream

0

35

70

105

140

2009 2011 2013 2015

Week 20-7 15 > 23-7-15

CAC 40 5 124 } 5 087 -0.7 %

S&P 500 2 127 } 2 102 -1.2 %

Volatility (VIX) 12.0 } 12.6 +0.7 %

Euribor 3M (%) -0.02 } -0.02 +0.0 bp

Libor $ 3M (%) 0.29 } 0.29 +0.1 bp

OAT 10y (%) 1.09 } 1.05 -4.1 bp

Bund 10y (%) 0.74 } 0.70 -3.8 bp

US Tr. 10y (%) 2.35 } 2.28 -7.0 bp

Euro vs dollar 1.09 } 1.10 +1.2 %

Gold (ounce, $) 1 132 } 1 093 -3.5 %

Oil (Brent, $) 56.7 } 56.3 -0.7 %

Thibault Mercier 24 July 2015 15-28

2 economic-research.bnpparibas.com

Eurozone Consolidating the rally

Growth prospects continue to look upbeat in the eurozone, despite the Greek crisis. There are numerous support factors: ECB actions, the rebound in lending, the weak euro and low oil prices.

Risks exist, notably pertaining to the slowdown in growth in the emerging countries, but they are limited since the eurozone recovery is increasingly fuelled by internal fundamentals.

This cyclical analysis should not be allowed to mask the enormous challenges that persist in the longer term. The growing divergences between member states in terms of in activity and employment must be reversed.

Fiscal rigour and structural reforms cannot be the sole responses to the crisis. Europe must deal with all its imbalances, not only its deficits.

Favourable short-term prospects Despite uncertainty over Greece, the Eurozones economic outlook continues to improve. While the July PMI Composite output index fell slightly from June (53.7 versus 54.2), it remained above the first semester average, suggesting a fairly robust rate of expansion. As for the PMI output price index it registered its highest level since March 2012, at 49.9. Q2 GDP figures will be published mid-August, but monthly economic data and survey results suggest that growth will be at least as strong if not slightly stronger than in Q1 (0.4% q/q). The eurozone has numerous support factors, foremost of which is the ECBs actions. Despite higher long-term rates and wider peripheral spreads since the end of April (which narrowed slightly recently), monetary and financing conditions remain extremely accommodative. Furthermore, if conditions were to tighten, the ECBs Governing Council is ready to act. The monetary policy transmission channel towards the real economy is also improving, notably in the countries hit hardest by the crisis. Between January and May 2015, bank lending rates to non-financial companies (NFC) on loans up to EUR 1 mn declined by 40 basis points in Italy, 60bp in Spain and 70bp in Portugal. Year-on-year, they are down 118bp, 133bp and 155bp, respectively. Bank lending surveys also show an easing in credit standards while NFC loans increased 0.1% y/y in May, the first rise in three years. Given the simultaneous turnaround in the outlook for demand, the improvement in financing conditions is likely to support corporate investment. Another major consequence of the ECBs very accommodating policy is the euro depreciation, a trend accentuated by the prospects of US monetary tightening. Since March 2014, the nominal effective

exchange rate of the euro has depreciated by nearly 10%. Although it has regained a little in value recently, the positive effects of its past decline on foreign trade should continue to be felt (and could even strengthen) in the future given the usual time lag between currency depreciation and its impact on exports. In addition to monetary policy, another key support factor for European growth is the low level of oil prices. Brent crude oil prices (in dollars) has begun trending downwards again after falling 60% between end June 2014 and January 2015. Since mid-May, oil prices have fallen 15%. The drop in oil prices supports both household purchasing power and corporate earnings, which in turn should benefit consumption and investment.

Composite PMI Output index ; Output price index; --- Courbe 3

Graphique 1 Source: Markit

Bank interest rate Loans up to EUR 1 mn Spain Italy --- Portugal

Graphique 2 Source: ECB

35

40

45

50

55

60

2007 2009 2011 2013 2015

2

3

4

5

6

7

8

9

2007 2009 2011 2013 2015

Thibault Mercier 24 July 2015 15-28


Lastly, austerity policies are being applied more loosely. Ongoing fiscal consolidation will be achieved mainly through cyclical improvements in public accounts, eliminating an obstacle to the recovery of domestic demand, which is already strained by private deleveraging.

Limited risks Naturally, the recovery scenario has its risks, but they seem to be limited, at least in the short term. One risk is Greece. Even though negotiations have opened on a third European bailout, doubts persist over the countrys political stability. The reforms demanded by creditors will be impossible to pass without the oppositions support. Moreover, everything suggests that the implementation of these measures will only accentuate a recession already exacerbated by capital controls. The sense of a lull created by the positive news flow of recent days (European agreement in principle on ESM financing; raising of the ceiling on the ECBs Emergency Liquidity Assistance; reopening of Greek banks) should not be overestimated. Even so, the Greek risk does not seem to pose an immediate threat to the eurozones recovery, as indicated by the financial markets mild reaction to the recent ups and downs of European negotiations. Once again, the ECBs stabilising power seems to play a vital role. A second risk is linked to the slowdown in emerging countries growth, especially China, which could hurt European exports. Yet, with the raise in domestic demand and the improvement in labour market conditions, the Eurozone recovery is more and more self-sustaining, and therefore less and less vulnerable to external risks.

Long-term challenges These favourable growth prospects should not be allowed to mask the long-term challenges that lie ahead, as well as the doubts that exist about the political leaders capacity to meet them. As Mr. Draghi recalled recently, the eurozone is imperfect, and because of this imperfection, it is vulnerable and fragile. While there is nothing new about the question of the euros imperfection, it has become an increasingly pressing issue since 2010. Faced with the sovereign debt crisis, European political leaders have seen fiscal irresponsibility and the absence of reforms, as the roots of the imbalances. The authorities responded by strengthening the framework for fiscal policy (introducing the fiscal compact) and by implementing structural reforms, which were supposed to bring into alignment the functioning of the southern economies with those of the north. Financial solidarity was set in place, but remains based on absolute conditionality. In the end, the Eurozones stability depends on fiscal austerity and the elimination of external imbalances. Although necessary, the adjustments made since 2010 are probably not enough to ensure the eurozones long-term stability. The weapons chosen to deal with the crisis ended up widening the economic gaps. Differences in unemployment rates are particularly striking, between nearly full employment in Germany and mass unemployment in southern Europe, notably among youth. Despite the return to growth, there are still numerous and demanding conditions for restoring prosperity. Without a significant improvement

in living standards, the democratic underpinnings of the European project risk being weakened. It is wrong to see the crisis as the consequences solely of the fiscal irresponsibility of certain member states. A monetary union without fiscal union is, in itself, a source of imbalances. The interest rate channel is one of the perpetrators: a single monetary policy has every chance of being too accommodating for some, triggering asset bubbles. This was the case in Spain and Ireland. The effective exchange rate channel is another. The currency has a single external value, but it translates differently from one country to the next: the equilibrium of the whole is not the same as the equilibrium for each country individually. For countries with structural external deficits, sooner or later the single exchange rate will prove to be too high. But the opposite is also true: surplus countries will only see their surpluses accumulate with an undervalued exchange rate. This is Germanys case. Fundamentally, adopting a single currency encourages economies to specialise, increasing their vulnerability to asymmetric shocks. The emphasis placed on permanently balanced public finances weakens the stabilisation role of fiscal policy. Taking better account of the heterogeneity of member countries by pooling together greater resources, might be necessary, not only to increase the resilience of the euro area but also to benefit fully from the expected benefits of monetary union i.e. lower transaction costs and the disappearance of currency risk. Yet, given the current political appetite, it will apparently be a long-term process. In the nearer term, it would be helpful to better synchronise economic policies within the EMU. The European Commission has adopted tools to monitor macroeconomic imbalances. It is regrettable, however, that these imbalances are mainly looked at in terms of deficits, without symmetrical criteria for surpluses1. A surplus can be as much an imbalance as a deficit as it might illustrates an internal deficit of consumption and investment. This is the IMFs conclusion in a recent report on Germanys current account surplus. Eventually, stimulating public and private investment in Germany seems to be just as necessary for Eurozone stability as the modernisation of the Greek economy.

1 Current account deficits are authorised up to a limit of 4% of GDP, vs. 6% for surpluses. For net assets, there is no equivalent to the lower limit on the stock of net liabilities.

Frdrique Cerisier 24 July 2015 15-28


Greece A busy agenda

This week the Greek government repaid the ECB and the IMF, and approved the second set of measures demanded by creditors as a precondition for negotiations.

Talks can now begin on a third bailout plan, estimated at about EUR80bn. Finding a suitable compromise promises to be tough.

On Monday, 20 July, after receiving a European emergency loan of EUR7bn, the Greek government was able to repay the European Central Bank (ECB) EUR4.2bn in principal and interest for securities that had reached maturity, purchased under the now closed Securities Market Program (SMP). It also paid nearly EUR2bn to regularise its situation with the IMF and with the Central Bank of Greece. On the same day, Greek banks reopened, boosting the feeling of a certain lull in the crisis, even though restrictions were maintained on deposits and payments abroad. On Wednesday, 22 July, Mr. Tsipras asked Parliament to approve a second round of reforms demanded by creditors as a precondition for the opening of negotiations on a third bailout plan. After the previous weeks vote on a series of measures, including a VAT increase and the virtually automatic implementation of public spending cuts in case of budget overruns, the prime minister asked his majority to accept reforms that aim to help turn around banking institutions, including accelerated legal procedures for handling non-performing loans and bankruptcies (Bank Resolution and Recovery Directive, or BRRD). An agreement in principle was reached with the European Stability Mechanism (ESM) which paved the way for negotiations to open on the conditionality of reforms (listed in the Memorandum of Understanding presented by the Troika) and on financing issues (Financial assistance Facility Agreement, FFA, prepared by the ESM). Numerous red letter dates lie ahead and the calendar is still dense. Most importantly, major challenges must be overcome before a robust and credible agreement can be reached.

The next steps These negotiations will undoubtedly be long and difficult, and it is impossible to say whether they will be finalised before the next repayment date on 20 August. If an agreement is not reached, another bridge loan or emergency solution will have to be found to cover the ECBs EUR3.2bn in Greek public debt securities that will reach maturity on that date. The European Commission and the IMF have each published documents estimating Greeces financing needs over the next three years. The goal is to take an objective look at the countrys economic and financial situation and to assess the damage caused by the crisis in recent months, and its consequences for the banking system.

The European Commission now estimates that Greek GDP could contract by 2% to 4% this year, and by another 0.5% to 1.75% in

2016, before starting to recover in 2017. In such an environment, fiscal targets would have to be revised substantially downwards. A primary deficit of up to 1% of GDP is expected this year, followed by hopes of a surplus of between 0.5% and 1% in 2016, 2% to 2.25% in 2017 and 3.5% in 2018. Given the economic situation, these targets seem to be very ambitious. Observations are also pessimistic about the expected proceeds from privatisations, especially since recent tensions have only increased investors timidity. Moreover, past observations show how hard it has been for the Greek government to produce any results on this front (only EUR3bn in privatisation proceeds in 5 years). All in all, at the end of June the IMF the esteemed that is would be unreasonable to hope for more than EUR500m in revenues a year from privatisations, while the European Commission expects privatisation proceeds to be as high as EUR2.5bn over the next three years. In both cases, this is a far cry from the EUR50bn in privatisation proceeds planned by the heads of state in their 12 July statement, even though they were using a much longer timeframe. Other key parameters must also be factored in: the banking sector will need to be recapitalised in the months ahead, which the two institutions currently estimate at about EUR25bn; loan repayments to the IMF and ECB will total more than EUR30bn over the next three years; and interest payments will also have to be met (including on its short-term debt). Altogether, financing needs are estimated at roughly EUR82bn to EUR85bn over three years.

In an interview in the German press, Klaus Regling, Managing Director of the ESM, expressed hopes that his institutions participation would be limited to EUR50bn, and pointed out that its operating rules required it to seek IMF participation in financing as much as possible. In Washington, however, the IMF esteems that such a plan would put Greek public debt on an unsustainable trajectory (more than 200 points of GDP over the next 2 years) unless the institutions and other European member states were to provide debt relief, in one form or another.

Financial Assistance to Greece

Plan I Plan II Plan III

2010-13 2012-14 2015-18

Total paid Approved

Paid out

Apprvd. Paid out

Apprvd. Paid out

EMU states via: 191.06

Bilateral loans 80 52.9

EFSF 144.6 131

EFSM 7.16 7.16

ESM 50 to 85?

IMF 30 20.1 28 12 ? 32.1

Total 110 73 172.6 143 ? 7.16 223.16

Table 1 Sources: IMF, EC, EFSF, BNP

OECD Team 24 July 2015 15-28


To watch from 27 to 31 July 2015

Monday 27 July 2015 GERMANY: IFO (July)

The IFO survey has been falling for three consecutive months. In July it should continue to do so mirroring the nervousness of German corporates in the midst of the Greek crisis.

Tuesday 28 July 2015 UNITED KINGDOM: GDP (Q2 2015)

After softer-than expected growth in Q1 (0.4% q/q), we expect a rebound occurred in Q2, with growth at +0.7%. The service sector probably was the main contributor to this come back in line of UK growth.

Thursday 30 July 2015 UNITED STATES: GDP (Q2 2015)

We expect GDP growth at 3% q/q, saar. Consumption will likely have been the largest contributor. Annual revisions to GDP will also be released. These include revisions to the seasonal adjustment methodology.

JAPAN: Industrial production (June)

Production has been softening in recent months, due, in large part, to the weakness in external demand. The drop in domestic car sales after the tax hike on mini vehicles in April is another factor. A modest rebound is expected for June.

EUROZONE: Economic sentiment

In line with the evolution of the PMIs flash estimates, we expect economic sentiment to have slightly decreased in July, although remaining at levels consistent with relatively robust GDP growth in Q3.

Friday 31 July 2015 JAPAN: Consumer prices (June, Tokyo: July)

CPI inflation should be hovering around 0.3% through the summer, as upward pressures on food prices from yen depreciation will continue to be offset by falling prices for energy.

JAPAN: Employment Report (June)

As production is growing faster than potential, conditions on the labour market should remain very tight. The low unemployment rate, at around 3.3%, is exerting upward pressure on wage settlements.

EUROZONE: Inflation (flash)

The fall in energy prices is likely to have put further downward pressure to inflation, that may have come close to 0.1% in July after 0,2% in June. Core inflation is likely to have stabilized around 0.8%.

FRANCE: Retail sales (June)

A sharp pick-up in retail sales is possible in June, supported by the jump in car registrations, the end of the payback effect of the last previous months and the uptrend in consumer confidence and purchasing power gains.

Detailed forecasts 24 July 2015 15-28


Economic forecasts

En % 2014 2015 e 2016 e 2014 2015 e 2016 e 2014 2015 e 2016 e 2014 2015 e 2016 e

Advanced 1.8 1.9 2.3 1.4 0.5 1.9

United States 2.4 2.4 2.8 1.6 0.2 2.2 -2.2 -2.5 -2.8 -2.8 -2.8 -2.4

Japan -0.1 0.8 0.9 2.7 0.9 1.5 0.5 2.8 2.7 -5.5 -4.3 -3.9

United Kingdom 2.8 2.3 2.0 1.5 0.3 1.7 -5.5 -4.6 -3.5 -5.0 -3.9 -2.7

Euro Area 0.9 1.6 1.9 0.4 0.1 1.4 2.1 3.1 3.1 -2.4 -2.0 -1.5

Germany 1.6 1.8 2.3 0.8 0.3 1.7 7.8 8.1 8.1 0.7 0.8 1.0

France 0.2 1.2 1.8 0.6 0.4 1.5 -1.0 0.0 -0.0 -4.0 -3.7 -3.3

Italy -0.4 0.8 1.3 0.2 0.2 1.1 1.9 2.0 2.3 -3.0 -2.6 -2.2

Spain 1.4 3.2 2.9 -0.2 -0.2 1.1 0.8 0.8 1.0 -5.8 -4.4 -2.9

Netherlands 0.9 2.1 2.3 0.3 0.1 1.3 10.4 10.0 10.0 -2.8 -1.8 -1.6

Belgium 1.1 1.5 1.7 0.5 0.2 1.7 1.4 1.7 1.9 -3.2 -2.8 -2.4

Portugal 0.9 1.7 1.8 -0.2 0.7 1.4 0.6 1.3 1.5 -4.6 -3.1 -2.8

Emerging 4.5 4.0 5.3 5.6 6.2 6.2

China 7.4 7.1 7.3 2.0 1.2 1.7 2.1 4.0 4.0 -2.1 -2.4 -2.8

India 7.1 7.1 7.5 6.7 5.4 7.2 -1.7 -1.3 -1.4 -4.4 -4.1 -3.9

Brazil 0.1 -2.5 -0.5 6.3 8.7 6.1 -4.6 -4.0 -3.3 -6.2 -6.8 -6.9

Russia 0.6 -2.5 1.5 7.8 13.0 6.2 3.2 2.9 3.0 -0.5 -3.6 -1.6

World 3.3 3.1 3.9 3.7 3.6 4.3

Source : BNP Paribas Group Economic Research / GlobalMarkets (e: Estimations, prv isions)

GDP Growth Inflation Curr. account / GDP Fiscal balances / GDP

Financial forecasts Interest rates ######## ######## ########

End period Q1 Q2 Q3e Q4e Q1e Q2e Q3e Q4e 2014 2015e 2016e

US Fed Funds 0.25 0.25 0-0.25 0.25-0.50 0.5-0.75 0.75-1 1-1.25 1.5-1.75 0.25 0.25-0.50 1.5-1.75

3-month Libor $ 0.27 0.28 0.50 0.75 1.00 1.30 1.55 1.85 0.26 0.75 1.85

10-y ear T-notes 1.93 2.33 2.45 2.75 2.80 2.85 2.90 3.00 2.18 2.75 3.00

EMU Refinancing rate 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

3-month Euribor 0.02 -0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.00 0.00

10-y ear Bund 0.18 0.77 0.55 0.70 0.80 0.95 1.10 1.25 0.54 0.70 1.25

10-y ear OAT 0.42 1.20 0.85 0.95 1.05 1.20 1.35 1.55 0.84 0.95 1.55

10-y ear BTP 1.29 2.31 1.65 1.60 1.75 1.95 2.15 2.35 1.88 1.60 2.35

UK Base rate 0.50 0.50 0.50 0.50 0.75 0.75 1.00 1.25 0.50 0.50 1.25

3-month Libor 0.57 0.58 0.75 0.75 1.00 1.00 1.25 1.50 0.56 0.75 1.50

10-y ear Gilt 1.58 2.03 2.10 2.25 2.35 2.40 2.50 2.60 1.76 2.25 2.60

Japan Ov ernight call rate 0.02 0.01 0.10 0.10 0.10 0.10 0.10 0.10 0.07 0.10 0.10

3-month JPY Libor 0.17 0.17 0.16 0.16 0.16 0.17 0.18 0.20 0.18 0.16 0.20

10-y ear JGB 0.40 0.44 0.55 0.60 0.70 0.80 1.00 1.00 0.33 0.60 1.00

Exchange rates

End period Q1 Q2 Q3e Q4e Q1e Q2e Q3e Q4e 2014 2015e 2016e

USD EUR / USD 1.07 1.11 1.04 1.02 1.00 1.00 1.02 1.04 1.21 1.02 1.04

USD / JPY 120 122 127 130 132 132 134 136 120 130 136

GBP / USD 1.48 1.57 1.51 1.50 1.47 1.45 1.48 1.49 1.56 1.50 1.49

USD/CHF 0.97 0.93 1.04 1.08 1.10 1.10 1.08 1.06 0.99 1.08 1.06

EUR EUR / GBP 0.72 0.71 0.69 0.68 0.68 0.69 0.69 0.70 0.78 0.68 0.70

EUR / CHF 1.04 1.04 1.08 1.10 1.10 1.10 1.10 1.10 1.20 1.10 1.10

EUR/JPY 129 136 132 133 132 132 137 141 145 133 141

Source : BNP Paribas Group Economic Research / GlobalMarkets (e: Estimates & forecasts)

2015 2016

2015 2016

OECD Team - Statistics 24 July 2015 15-28


Markets overview

The essentials Week 20-7 15 > 23-7-15

CAC 40 5 124 } 5 087 -0.7 %

S&P 500 2 127 } 2 102 -1.2 %

Volatility (VIX) 12.0 } 12.6 +0.7 %

Euribor 3M (%) -0.02 } -0.02 +0.0 bp

Libor $ 3M (%) 0.29 } 0.29 +0.1 bp

OAT 10y (%) 1.09 } 1.05 -4.1 bp

Bund 10y (%) 0.74 } 0.70 -3.8 bp

US Tr. 10y (%) 2.35 } 2.28 -7.0 bp

Euro vs dollar 1.09 } 1.10 +1.2 %

Gold (ounce, $) 1 132 } 1 093 -3.5 %

Oil (Brent, $) 56.7 } 56.3 -0.7 %

10 y bond yield, OAT vs Bund Euro-dollar CAC 40

1.05

0.70

0.00

0.50

1.00

1.50

2.00

2.50

2013 2014 201523 Jul

1.10

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

2013 2014 201523 Jul

3 400

3 600

3 800

4 000

4 200

4 400

4 600

4 800

5 000

5 200 5 400

5 087

2013 2014 201523 Jul

Bunds OAT

Money & Bond Markets Interest Rates

ECB 0.05 0.05 at 01/01 0.05 at 01/01

Eonia -0.12 0.14 at 01/01 -0.14 at 14/05

Euribor 3M -0.02 0.08 at 01/01 -0.02 at 13/07

Euribor 12M 0.17 0.33 at 01/01 0.16 at 02/06

$ FED 0.25 0.25 at 01/01 0.25 at 01/01

Libor 3M 0.29 0.30 at 20/07 0.25 at 06/01

Libor 12M 0.80 0.81 at 21/07 0.61 at 16/01

BoE 0.50 0.50 at 01/01 0.50 at 01/01

Libor 3M 0.58 0.58 at 16/07 0.56 at 11/03

Libor 12M 1.08 1.08 at 17/07 0.95 at 16/01

At 23-7-15

highest' 15 lowest' 15

Yield (%)

AVG 5-7y 0.62 0.91 at 16/06 0.24 at 12/03

Bund 2y -0.23 -0.08 at 01/01 -0.29 at 07/07

Bund 10y 0.70 0.99 at 10/06 0.08 at 20/04

OAT 10y 1.05 1.33 at 10/06 0.36 at 15/04

Corp. BBB 1.96 2.22 at 10/07 1.29 at 10/03

$ Treas. 2y 0.70 0.72 at 06/03 0.44 at 15/01

Treas. 10y 2.28 2.48 at 10/06 1.67 at 02/02

Corp. BBB 4.00 4.03 at 20/07 3.41 at 30/01

Treas. 2y 0.64 0.68 at 26/06 0.39 at 23/03

Treas. 10y 2.01 2.19 at 26/06 1.36 at 30/01

At 23-7-15


10y bond yield & spreads

11.85% Greece 1114 pb

2.58% Portugal 188 pb

1.95% Spain 125 pb

1.91% Italy 120 pb

1.21% Ireland 51 pb

1.07% Belgium 36 pb

1.05% France 34 pb

1.02% Austria 31 pb

0.93% Netherlands22 pb

0.88% Finland 17 pb

0.70% Germany

Commodities Spot price in dollars 2015()

Oil, Brent 56 46 at 13/01 +11.2%

Gold (ounce) 1 093 1 093 at 22/07 +1.5%

Metals, LMEX 2 529 2 455 at 07/07 -4.4%

Copper (ton) 5 254 5 254 at 23/07 -9.1%

CRB Foods 366 344 at 17/03 +9.2%

wheat (ton) 177 170 at 05/05 -10.7%

Corn (ton) 149 132 at 15/06 +11.8%

At 23-7-15 Variations

lowest' 15

Oil (Brent, $) Gold (Ounce, $) CRB Foods

40

50

60

70

80

90

100

110 120

56

2013 2014 201523 Jul

1 080

1 170

1 260

1 350

1 440

1 530

1 620

1 710

1 093

2013 2014 201523 Jul

340

360

380

400

420

440

460

366

2013 2014 201523 Jul

Exchange Rates Equity indices 1 = 2015

USD 1.10 1.21 at 01/01 1.05 at 13/03 -9.3%

GBP 0.71 0.79 at 06/01 0.69 at 17/07 -8.9%

CHF 1.05 1.20 at 01/01 0.98 at 16/01 -12.4%

JPY 136.17 145.08 at 01/01 126.57 at 15/04 -6.1%

AUD 1.49 1.51 at 10/07 1.37 at 28/04 +0.7%

CNY 6.82 7.51 at 01/01 6.57 at 13/04 -9.2%

BRL 3.61 3.61 at 23/07 2.91 at 23/01 +12.2%

RUB 63.12 79.36 at 30/01 53.47 at 16/04 -13.1%

INR 70.03 76.38 at 01/01 66.07 at 13/04 -8.3%



Index 2015 2015()

CAC 40 5 087 5 269 at 27/04 4 084 at 06/01 +19.1% +19.1%

S&P500 2 102 2 131 at 21/05 1 993 at 15/01 +2.1% +12.5%

DAX 11 512 12 375 at 10/04 9 470 at 06/01 +17.4% +17.4%

Nikkei 20 684 20 868 at 24/06 16 796 at 14/01 +18.5% +26.3%

China* 70 85 at 27/04 63 at 08/07 +5.6% +16.4%

India* 514 553 at 03/03 473 at 12/06 +4.6% +14.1%

Brazil* 1 464 1 886 at 22/01 1 446 at 13/03 -1.2% -11.9%

Russia* 486 587 at 18/05 402 at 30/01 +15.9% +32.2%



* MSCI Indices

24 July 2015 15-28


Most recent articles

JULY 17 July 15-27 Greece: ECB takes a first step United States: Sometime this year hopefully Emerging Markets: A rough spell

10 July 15-26 United States: Christine and the Queen Eurozone: The ECB can do a lot, but not everything Spain: Rise in support for new parties

03 July 15-25 Greece: A referendum sounding like a ultimatum United States: Published on a Thursday France: Household consumption: idling growth engine

JUNE 26 June 15-24 United States: Noflation is still an issue Eurozone: A rather pleasant spring France: Reversal of the unemployment curve: such a long wait Greece: Greek banks under pressure

19 June 15-23 United States: Repeat after her Eurozone: The ECB, ELA and Greece

12 June 15-22 United States: Time for optimism? Turkey: A leap into the unknown

05 June 15-21 United States: Relatively better Eurozone: While waiting for Greece

MAY 29 May 15-20 United States: A rebound in investment? United Kingdom: Yes Please

22 May 15-19 United States: Finally, some good news! Eurozone: Better than in the US!

07 May 15-18 United States: Tomorrow will be better France: Investment ready to recover

APRIL 30 April 15-17 United States: Winter came Eurozone: Public finances: still wide variations France: Still no improvement on the labour front

24 April 15-16 United States: Methodological skepticism France: Recovery lurking in the details

17 April 15-15 United States: April will be key Eurozone: QE useful, but no panacea

10 April 15-14 United States: Patiently waiting for a sign Eurozone: Target 2 positions: better but

03 April 15-13 Eurozone-United States: A new kind of divide United States: Another string of bad news

MARCH 27 March 15-12 United States: One quarter does not make a trend Eurozone: Positive pieces of news in Q1 2015

20 March 15-11 United States: Normalising policy if not (yet) rates Eurozone: Labour update

13 March 15-10 United States: The wage mystery Eurozone: The first week of QE

6 March 15-09 United States: Good things come to those who wait Eurozone: Good start, before the QE starts

FEBRUARY 27 February 15-08 France: Doubts about recovery Greece: Reality check

20 February 15-07 Eurozone: Doing better Germany: Europes biggest destination for migrants

13 February 15-06 France: Slightly brighter economic prospects Greece: The high stakes of negotiation

GROUP ECONOMIC RESEARCH

EMERGING ECONOMIES AND COUNTRY RISK

ADVANCED ECONOMIES AND STATISTICS

BANKING ECONOMICS

CONJONCTURE

Structural or in the news flow, two issues analysed in depth

EMERGING

Analyses and forecasts for a selection of emerging economies

PERSPECTIVES

Analyses and forecasts for the main countries, emerging or

developed

ECOFLASH

Data releases, major economic events. Our detailed views

ECOWEEK

Weekly economic news and much more

ECOTV

In this monthly webTV, our economists make sense of economic

news

ECOTV WEEK

What is the main event this week? The answer is in your two

minutes of economy

You can read and watch our analyses

on Eco news, our iPad and Android application

http://economic-research.bnpparibas.com

OUR PUBLICATIONS

EW.1eP.EN.15.28EW.ZE.01.ENG.15.28EW.GR.01.EN.15.28Calendrier To watch from 27 to 31 July 2015EW.Forecasts.ENMarketwach _ENEcoweek EN Dernires publications 2015back_ecoweekEN

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