OFP Monthly Charts Report
Economic analysis and Assets performance
07/31/2014 - 08/31/2014
August 2014 - Monthly 8
Key elements of the month
Main elements of past month
� The global economy growth rate slows under the weakness of the Euro zone, Japan and the BRIC (Brazil, Russia, India, and China).
� Very significant decrease in long-term interest rates for developed countries (German 10Y under 1%, France 10Y is at 1.25%).
� Rise in international political tensions (Ukraine, Middle East).
Europe
� Inflation slightly down in the Euro Zone 0.3% (against 0.4% in July) with a commodity effect. Slight increase in the underlying inflation at 0.9% against 0.8%.
� Decrease in the IFO business confidence index in Germany, downside risk linked to geopolitical tensions in Ukraine.
� Sharp rise in unemployment in France and deterioration in industry confidence surveys. Slight improvement in services.
North and South America
� NAHB index comes back to 55 and suggests a momentum supported to construction thanks to a general trend of low interest rates (08/18).
� GDP 2nd revision in the United States came out at 4.2% annual rate, upward revision mainly due to investment (08/28).
� In Brazil, no change in the main indicators: Industrial PMI in decline (08/27) and the same for household confidence (08/25).
Asia & Pasific
� Japanese economy in sharp contraction in the 2nd quarter (-6.8% compared to Q1) and very low bounce expected for Q3.
� Concerns on Chinese real estate remain, increasing the probabilities of default from real estate developers.
� South Korea policy rates decrease to cope with the global economic downturn.
Commodities Markets
� Small change in North American grain products, Corn and Wheat remain unchanged despite concerns about the Ukrainian harvest.
� On August, WTI price recorded a significant drop (about $5 per barrel), which is a good sign for oil at the pump.
� At the international level, ocean freight rates (containers) showed a slight increase (Harpex index).
2 OFP Monthly Economic Report - 08/31/2014
Prolog - World
OFP Monthly Economic Report - 08/31/2014 3
Prolog - World
Confidence of Purchasing Managers (1/2)
Significant deceleration in confidence indices. Only American purchaseing leaders see a sharp rebound in confidence and in
activity outlooks, with the long-term interest rates decline and the strong equity
market performance.
Source : Oaks Field Partners, Markit, @TTStanton. Source : Oaks Field Partners, Institute for Supply Management, Markit, @TTStanton.
OFP Monthly Economic Report - 08/31/2014 5
42,3
44,0
45,7
47,5
49,2
51,0
52,7
54,4
56,2
57,9
59,7
08/2011 02/2012 08/2012 02/2013 08/2013 02/2014 08/2014
Eurozone - Manufacturing PMI
UK - Manufacturing PMI
Fig. 1 : Business confidence (Europe)
44,0
45,5
47,0
48,4
49,9
51,3
52,8
54,3
55,7
57,2
58,6
08/2011 02/2012 08/2012 02/2013 08/2013 02/2014 08/2014
US - Manufacturing ISM
Brazil - Manufacturing PMI
Fig. 2 : Business confidence (America)
Prolog - World
Consumer Price Indices
Source : Oaks Field Partners, Bureau of Labor Statistics, European Central Bank, UK Office for
National Statistics, @TTStanton.
Source : Oaks Field Partners, IBGE, National Bureau of Statistics, @TTStanton.
OFP Monthly Economic Report - 08/31/2014 9
- 3,06
- 2,10
- 1,14
- 0,18
0,78
1,74
2,70
3,66
4,62
5,58
6,54
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US- IPC YOY
Euro Zone - Inflation HICP
UK- IPC EU YOY
Fig. 9 : Consumer price indices (Developped countries)
- 3,1
- 1,8
- 0,5
0,8
2,2
3,5
4,8
6,1
7,4
8,8
10,1
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
China - IPC YOY
Brazil - IPC YOY
Fig. 10 : Consumer price indices (Emerging countries)
Euro Area analytics - UK and EMU
Table of contents
Business confidence 17Credit to non-financial companies 19Current account 20Effective exchange rate 21Equity marquet 13Exchange rate 21Harmonised inflation YoY 14Household confidence 17Household saving rate 19Industrial production (IP) 16Long-term money supply 18Monthly fluctuations in employment 15Public deficit (% of GDP) 22Real estate 22Retail sales in volume 16Short and long-term interest rates 13Short-term money supply 18Trade balances 20Unemployment rate 15Wage trends 14
12 OFP Monthly Economic Report - 08/31/2014
Euro Area analytics - UK and EMU
Inflation & Wages growth rate
The decline in commodities prices contribute to the decline in inflation in Europe. Growth without inflation. England surprises for the non-reactivity of wages to
domestic growth.
Source : Oaks Field Partners, German Federal Statistical Office, UK Office for National Statistics,
@TTStanton.
Source : Oaks Field Partners, UK Office for National Statistics, @TTStanton.
14 OFP Monthly Economic Report - 08/31/2014
- 1,36
- 0,68
0,00
0,68
1,36
2,04
2,72
3,40
4,08
4,76
5,44
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany - IPC YOY
UK- IPC EU YOY
Fig. 15 : Harmonised inflation YoY
- 4,1
- 2,9
- 1,7
- 0,5
0,7
1,9
3,1
4,3
5,5
6,7
7,9
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UK - Average Weekly Earnings YOY
Fig. 16 : Wage trends
Euro Area analytics - UK and EMU
Monthly change in payrolls & Unemployment Rate
France remains in a significant worsening trend (+26 100 job seekers in July)1.
(1) http://travail-emploi.gouv.fr/etudes-recherches-statistiques-de,76/etudes-et-recherches,77/publications-dares,98/dares-analyses-dares-indicateurs,102/2014-065-demandeurs-d-emploi,17959.html
Source : Oaks Field Partners, Deutsche Bundesbank, French Labor Office, UK Office for National
Statistics, @TTStanton.
Source : Oaks Field Partners, Deutsche Bundesbank, Eurostat, INSEE National Statistics Office,
Istat (Institut national des statistiques italien) , ONS (Office for National Statistics), @TTStanton.
OFP Monthly Economic Report - 08/31/2014 15
- 126
- 97
- 68
- 38
- 9
21
50
80
109
139
168
2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany - Job creation and destruction MoM
France - Job Seekers Total Change MoM
UK - Jobs Creation/Destruction MoM
Fig. 17 : Monthly fluctuations in employment
2,0
4,7
7,4
10,1
12,8
15,5
18,2
20,9
23,6
26,3
29,0
2004 2006 2008 2010 2012 2014
Germany - Unemployment Rate
France - Unemployment Rate
UK - Unemployment Rate
Spain - Unemployment Rate
Italy - Unemployment Rate
Fig. 18 : Unemployment rate
Euro Area analytics - UK and EMU
Trade Balance & Current Account
Source : Oaks Field Partners, Bank of Spain, Deutsche Bundesbank, ISTAT, Ministry of the
Economy (France), UK Office for National Statistics, @TTStanton.
Source : Oaks Field Partners, German Federal Statistical Office, INE, INSEE National Statistics
Office, Istat (Institut national des statistiques italien) , ONS (Office for National Statistics),
@TTStanton.
20 OFP Monthly Economic Report - 08/31/2014
-13 414
-9 835
-6 255
-2 676
903
4 483
8 062
11 641
15 221
18 800
22 379
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany - Trade Balance
France - Trade Balance
UK - Trade Balance
Spain - Trade Balance
Italy - Trade Balance
Fig. 27 : Trade balances
- 12,9
- 10,6
- 8,3
- 6,0
- 3,8
- 1,5
0,8
3,1
5,4
7,7
9,9
2004 2006 2008 2010 2012 2014
Germany - Current Account Balance
France - Current Account Balance
UK - Current Account Balance
Spain - Current Account Balance
Italy- Current Account Balance
Fig. 28 : Current account
Americas analytics - North and South America
Retail Sales & Industrial Production
Brazil confirms its slowdown. Brazilian recession (Negative GDP on Q1 and Q2) will weigh heavily on general
elections results on 5th October, 2014.
Source : Oaks Field Partners, ANTAD, IBGE, STCA - Statistics Canada, U.S. Census Bureau,
@TTStanton.
Source : Oaks Field Partners, Federal Reserve, IBGE, INEGI, STCA - Statistics Canada, @TTStanton.
28 OFP Monthly Economic Report - 08/31/2014
- 14,8
- 11,4
- 8,0
- 4,6
- 1,2
2,2
5,6
9,0
12,4
15,8
19,2
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US - Retail Sales YOY
Canada - Retail Sales YOY
Mexico -Retail Sales YOY
Brazil - Retail Sales YOY
Fig. 39 : Retail sales
- 21,5
- 17,0
- 12,5
- 8,0
- 3,5
1,0
5,5
10,0
14,5
19,0
23,5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US - IP Canada - IP
Mexico - IP Brazil - IP
Fig. 40 : Industrial production
Comments on Financial Assets
Bond Markets
Source : Oaks Field Partners, Bundesbank, European Central Bank, @TTStanton. Source : Oaks Field Partners, BGN, Banca d'Italia, Banque de France, @TTStanton.
OFP Monthly Economic Report - 08/31/2014 49
- 0,68
- 0,08
0,52
1,12
1,72
2,32
2,92
3,52
4,12
4,72
5,32
ECB - Refinancing rate
Germany - Rate 2 Year
Germany - Rate 10 Year
Fig. 73 : ECB interest rates and German interest rates
0,49
1,25
2,01
2,77
3,53
4,29
5,05
5,81
6,57
7,33
8,09
France - Rate 10 Year
Italy - Rate 10 Year
Spain - Rate 10 Year
Fig. 74 : Main European interest rates
Comments on Financial Assets
Energy - Crude Oil (Barrel) & Gasoline per Gallon
Decline in global growth and high inventories take part in the decline in oil prices.
Source : Oaks Field Partners, ICE, NYM, @TTStanton. Source : Oaks Field Partners, American Automobile Association, NYM, @TTStanton.
OFP Monthly Economic Report - 08/31/2014 59
14
29
43
58
73
87
102
116
131
145
160
Crude Oil WTI Index
Brent Index
Fig. 89 : Oil (WTI: Texas & Brent: North Sea)
1,31
1,63
1,95
2,27
2,59
2,91
3,23
3,55
3,87
4,19
4,51
20
34
48
62
76
90
104
118
131
145
159
Crude Oil WTI Index (L. Scale)
Gasoline - National average (R. Scale)
Fig. 90 : Oil and gas (USA)
Performances of Main Asset Classes
Table of contents - Equity Markets
TS 1 month 3 months 6 months 1 year 2014 2 years Value
WorldMSCI AC WORLD VALUE - 0,38% + 1,97% + 5,73% + 17,82% + 6,00% + 33,45% 204,79
Developped MarketsMSCI Daily Net TR World Euro + 2,22% + 6,05% + 10,73% + 21,22% + 12,17% + 35,07% 179,78
S&P 500 Total Return + 1,52% + 4,68% + 8,84% + 25,25% + 10,32% + 48,28% 3643,3
Canada S&P/TSX 60 Total Return Index + 1,05% + 8,14% + 12,05% + 27,19% + 16,94% + 38,91% 2188,8
Germany DAX Index - 1,80% - 4,76% - 2,29% + 16,87% - 1,24% + 35,08% 9470,2
France CAC 40 Total Return + 1,17% - 2,54% + 2,03% + 15,10% + 5,17% + 37,67% 10042
Italy FTSE MIB Net Total Return - 2,91% - 5,11% + 1,68% + 25,33% + 9,66% + 43,70% 30233
Spain IBEX 35 Net Return - 1,44% + 0,30% + 8,13% + 34,14% + 11,09% + 58,35% 22146
United Kingdom FTSE 100 Tot. Return + 1,13% + 0,67% + 2,44% + 10,13% + 3,85% + 27,65% 5110,8
Nikkei Total Return Index - 0,15% + 5,62% + 4,89% + 17,11% - 3,72% + 76,31% 22539
Australia S&P/ASX 200 Net Tot Ret + 1,50% + 3,38% + 6,20% + 14,10% + 8,63% + 40,20% 46536
New Zealand Portfolio Index + 0,97% + 0,88% + 5,67% + 15,33% + 10,04% + 46,12% 3168,3
Emerging MarketsMSCI Emerging Markets + 3,07% + 10,85% + 20,07% + 20,11% + 16,31% + 14,06% 323,68
Bovespa + 6,00% + 19,61% + 30,14% + 22,55% + 19,55% + 6,83% 61288
Mexico IPC 35 Total Return + 2,80% + 10,31% + 17,65% + 15,56% + 6,72% + 14,33% 45628
Poland WIG 20 Total Return + 0,69% + 1,20% - 1,89% + 5,55% + 2,77% + 16,76% 3768,7
MICEX Index + 0,89% - 2,19% - 3,05% + 2,64% - 6,30% - 2,53% 1400,7
CSI 300 Total Return Index + 3,69% + 10,94% + 10,20% + 3,90% + 4,25% + 11,28% 2690,7
India National Stock Exchange + 2,28% + 10,80% + 27,87% + 47,21% + 27,25% + 54,13% 10457
Jakarta Composite Index + 0,94% + 4,96% + 11,18% + 22,45% + 21,93% + 25,50% 5136,9
Stock Exchange of Thailand SET + 1,73% + 10,48% + 18,97% + 22,22% + 21,51% + 33,38% 8646,1
62 OFP Monthly Economic Report - 08/31/2014
Next Month
Europe
� Monthly ECB meeting, details on the ABS purchase plan, but no implementation in September (09/04).
� France, announcements of the new government, what reforms will be waited for the beginning of September?
� Geopolitical tensions development in Ukraine.
North and South America
� Retail sales in August in the United States will be released on 09/12 in a falling oil price context.
� Housing starts (new homes) in the USA on 09/18 will allow seeing the first effects of lower interest rates after the very good Architecture Billing Index.
� In Brazil, the central bank meeting (COPOM on 09/03) will have to be followed in a cycle of easing credit conditions (lower RRR 07/28).
Asia & Pacific
� BoJ (Japan) meeting on September 4th an precisions from Shinzo Abe about the possibility to extend the Japanese bond purchase program.
� Monetary dynamics in China (10-15 September), with government help to avoid a sudden growth deceleration.
� Monetary policy meeting of the New Zealand central bank (maintenance or recovery rate hike cycle) (11th September).
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