barclays research

Research New York Open 15 April 2013

Global Macro Daily

A precious start to the week • Broader risk sentiment was hit by weaker-than-expected China data, with Q1 GDP printing 7.7% y/y (last: 7.9%, Barclays/cf, 8.0%). IP and FAI also surprised to the downside while retail sales printed in line with expectations. In FX, the impact was most significant for AUD/USD and NZD/USD with both crosses trading close to 1% below Friday’s close. Gold prices remain under pressure on the back of concerns of central bank selling and outflows from ETPs (Full Story).

• The broad risk-off sentiment has supported the USD this morning, which has recovered some of its losses from last week. USD weakness was driven by weak US data and investor positioning for capital flows out of Japan, as the BoJ’s easing forces domestic investors out of JGBs. In the near term, such flows should benefit currencies such as AUD and NZD, which offer high yields along with strong fundamentals (Full Story). However, this strength is likely to be limited as positions are likely to be FX hedged (Full story).

• The US reported weak retail sales for March and substantial downward revisions for January and February (Full Story). The weaker report for Q1 is less puzzling than the stronger preliminary reports and causes us to reduce our forecast of Q1 GDP growth from 3.5% to 3.0% (Full Story). A surprisingly large slide in the preliminary April report on US consumer confidence supports our view that weakness will extend into Q2 (Full Story).

• Euro area IP surprised to the upside in February, but the good news was overshadowed by downward revisions for both December and January. On balance, the report points to modest upside risks to our forecast of a -0.1% contraction of real GDP in Q1 (Full Story). Newspaper reports highlight the risk of fiscal slippage in Italy this year. Although we consider the slippage unsurprising and manageable in principle, uncertainty about when a new government will be installed magnifies the risks (Full Story).

• The Japanese monetary policy shock has created some expectation that a ‘wall of money’ may hit global financial markets in the months and years to come, as excess yen liquidity ‘leaks out’ of Japanese markets. We think this is based upon a misconception of how monetary policy shocks are transmitted under floating exchange rates. Global bond markets are likely to be supported by Japanese flows, as investors there seek substitutes for the JGBs that the BoJ plans to take out of the market. But a ‘wall of money’ that supports all asset classes seems unlikely to us (see Focus).

PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 11

Market Insights and Events Global

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Europe

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Asia Pacific

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North America

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EEMEA

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Latin America

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The next 24 hours Europe

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Asia Pacific

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North America

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Barclays | Global Macro Daily

Focus The sceptical economist’s guide to the Japanese ‘wall of money’ Michael Gavin If recent volatility in Japanese bond markets is any indication, investors remain uncertain about how the Japanese monetary policy announcement should be reflected in markets, beyond the unambiguously negative implication for the exchange rate. We think that some of this confusion is created by uncertainty over how the policy will play out and affect fundamental market drivers in the years to come. For example, the BoJ’s decision to purchase long-duration bonds should compress yields by creating scarcity value, but if the more expansionary monetary policy is successful in raising inflation (as inflation breakevens suggest that market participants now consider likely), nominal rates should eventually rise to reflect higher inflation, and this ought to be reflected in the yield curve. The pronounced flattening of the yield curve in recent weeks suggests that investors are now focusing on the direct and reasonably certain effect of BoJ purchases, rather than the indirect and uncertain effect on future inflation and interest rates. Only the passage of time will tell whether this focus will be vindicated. Fundamental uncertainty of this sort is intrinsic to the investment process and unavoidable. But there is no need to pile confusion on top of uncertainty, and we think that a prominent strand of discussion about the global ramifications of the Japanese monetary initiative threatens to do just that. This discussion takes as its starting point a presumption that the yen liquidity created by the BoJ’s intervention in the bond market will eventually ‘leak out’ into global financial markets because the associated decline in Japanese bond yields will create an incentive for Japanese investors to use the all the yen liquidity that is created by the policy to buy foreign assets, thus ‘exporting’ excess yen liquidity and creating a ‘wall of money’ that will support asset prices around the world. This is, we think, based upon an important misconception about how monetary policy is transmitted in a world of floating exchange rates. Let us think for a moment about how the BoJ’s QE should affect financial markets. In the first instance, the central bank buys government bonds from private holders, who owned the bond duration for good reasons of their own. The unsatisfied demand for bond duration will drive bond yields down, which is likely to induce bondholders to replace at least some of the JGBs that they previously owned with foreign assets. But here’s the rub. In order to buy these foreign assets, the local investor needs to get its hands on foreign currency (which we will call ‘dollars’ for brevity, even though it could in principle be any investable currency). In FIGURE 2 The BOJ bought a lot of bonds in 2012

FIGURE 1 A pronounced flattening of the Japanese yield curve

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Dec-11 Source: Bloomberg

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BOJ holdings of govt securities (trillion JPY) Source: Haver Analytics

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Barclays | Global Macro Daily a floating exchange rate regime, the central bank does not provide these dollars; they must come from the market. This means that every yen that the original investor sells to buy the dollars that he needs to buy foreign bonds must ultimately be purchased by a different yenbased investor. But in order to buy these yen, the second investor would have to sell a foreign investment of some sort to raise the required foreign exchange. But this means that every yen of the outflow created by the monetary ‘shock’ has as its counterpart an equal and opposite financial inflow by some yen-based investor. Yen liquidity simply cannot ‘leak out’ of the domestic financial market and create a global ‘wall of money’ unless some central bank (Japanese or other) decides to internationalize the monetary shock by buying some of the excess yen and issuing foreign currency in exchange. To the extent that global bond markets are supported by Japanese flows created by QE, there must be an offsetting flow in some other market. This conclusion does not rely on assumptions about the behavior of investors; it is a matter of international financial arithmetic. This does not mean that the Japanese monetary expansion will have no effect on world financial markets. We can think of three important ways in which it very likely will.

• First, we have suggested that the Japanese monetary shock cannot create a ‘wall of money’ that supports all asset classes around the world. But the fact that Japanese flows cannot support all markets does not mean that specific asset classes may not be strongly supported. In particular, the announced monetary operation will take an enormous amount of bond duration out of the Japanese bond market. This is likely to create Japanese buying of bond duration in other parts of the world. It is very plausible that global bond markets will continue to be supported by flows created by Japanese QE, although at the expense of flows to other asset classes. We think this is best viewed as a decline in the duration risk premium on assets that are reasonably close substitutes for the JGBs that the BoJ plans to take out of the market.

• Second, the yen depreciation that is an obvious implication of the Japanese monetary expansion may have effects on other economies around the world. If, to take an obvious example, the Japanese economy gains export demand at the expense of its competitors, this may slow the pace of recovery and lead to a reduction in interest rates abroad, but for a very different reason than the ‘wall of money’. Alternatively, the strong acceleration of Japanese activity that we expect to be generated by monetary and fiscal policy in H2 13 may generate a sense of optimism and opportunity that supports risk markets around the world. But once again, this would be for reasons quite different than a ‘wall’ of Japanese money.

• Finally, foreign central banks may lean against the wind of Japanese currency depreciation by intervening in currency markets, buying yen and issuing their own currency. To the extent that they do so, they will internationalize the Japanese monetary shock and, at least to some degree, import the excess liquidity associated with Japanese QE. This seems unlikely to be a major factor in the major currency areas, and therefore for the world as a whole, but it may be a country-specific driver where monetary authorities actively manage the exchange rate. We should probably ask whether this discussion would apply to US QE. Although this is not the place for an extended discussion, we think the answer is ‘no’, for a number of reasons, the most salient of which is the degree to which US financial markets are embedded in the international financial structure. The yen is Japan’s currency and JGBs are Japan’s safe haven. To an important degree, the USD is the world’s currency, and US bonds are a safe-haven asset for much of the world, not only for US investors. It seems to us that the Fed’s monetary policy therefore has more immediate and consequential spillover effects on monetary and financial conditions in much of the world than does the BoJ’s. But this is a discussion that will be much more relevant when it is the Fed’s, not Japan’s monetary policy that is in question. 15 April 2013

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Barclays | Global Macro Daily

MARKET INSIGHTS AND EVENTS Global Global Economics Weekly: Uneven effects of firmer Chinese growth Piero Ghezzi, Julian Callow, Michael Gavin, Philippe Gudin, Simon Hayes, Christian Keller, Dean Maki, Kyohei Morita Strengthening Chinese imports are helping manufacturers elsewhere, but that benefit is not evenly distributed. Chinese imports from the US have picked up sharply, but those from Europe are still contracting, widening the growth divergence. Similarly, Chinese imports from Korea have picked up, but those from Japan have not, though the yen depreciation may help the latter in the coming months. Inflation trends are mixed in emerging markets; many economies are showing subdued trends but above-target inflation is expected to lead to rate hikes in Brazil. Full Story

Europe Cyprus: Eurogroup approves €10bn bail-out Philippe Gudin The Eurogroup approved the programme, including a €10bn bailout from Europe and the IMF, last Friday in Dublin. However, there have been some rumours and some confusing statements by authorities both from Cyprus and Europe about the need for an extra €6bn to address the needs of the banking sector. As far as we understand, the Cypriot president was misunderstood when he asked Europe to speed-up the payment of structural and cohesion funds to help the country support economic activity, while the joint IMF/EU programme is likely to send the economy into a deep recession. Structural and cohesion funds are paid from the EU Budget (EU27) while the €10bn loan planned as part of the bail-out programme is paid by the ESM (EA17). Moreover, the transfer of cohesion and structural funds is totally independent from decisions made as part of the adjustment programme.

Italy: Election for President of the Republic starts this week Fabio Fois Parliament starts the session vote process this week (Thursday 18th April, 09:00 London Time). There will be two ballots per day. President Napolitano successor's may be voted on as soon as Friday afternoon, but we think it is more likely over the next weekend. According to the Italian constitution, the voting threshold to elect a new President is twothirds in the first three ballots (scheduled to happen by Friday morning) and this drops to 51% from the fourth vote. We think that the new President is likely to be voted next weekend. According to various newspapers (including Il Sole 24 Ore, Il Corriere della Sera, La Repubblica) there is no agreement yet between large political parties (PD, PDL, 5SM) on the name of Mr Napolitano's successor. The next President will have to decide whether to dissolve Parliament and call for new elections or try to form a grand coalition government. Should new elections be called, Il Corriere della Sera reports they could be held as soon as mid July since schools will be taken until end of June for end-year student examination. However, we note that historically they never happened that late in spring/summer (in 1976, ballots were called for by 20 June).

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Barclays | Global Macro Daily

Euro area inflation profile update Francois Cabau We have updated our monthly inflation profiles, taking into account the latest information available from this week's country releases. We have made only very small changes to our euro area March HICP print, as the French HICP release was in right in line with our aboveconsensus expectations. We continue to look for next week's euro area final March HICP to come in unrevised at 1.7% y/y. Full Story

Italy: Risks of fiscal slippage loom this year Fabio Fois According to Il Corriere della Sera, without additional fiscal tightening, Italy may not be able to reach a general government budget deficit target of 2.9% of GDP set for this year after 3.0% of GDP reached in 2012. According to the daily newspaper, Italy needs to find an additional EUR6-8bn due to not-deferrable outlays and potential non-implementation of VAT and waste tax hikes scheduled for H2 this year (we calculate about 0.4pp-0.5pp of GDP). Full Story

Euro area: Industrial production up 0.4% in February Fabrice Montagne Euro area industrial production inched up by 0.4% m/m in February, in line with our aboveconsensus forecast (consensus: 0.2% m/m) and in line with individual country releases this week. The February increase has been partially offset by downward revisions to data for both January (from -0.4% m/m to -0.6% m/m) and December (from 0.9 m/m to 0.7 m/m). Full Story

European Fixed Income Strategy Morning Comment - 15 April 2013 Moyeen Islam While Monday is a quiet day for data, tomorrow will see a raft of inflation data from Europe, the UK and the US while Wednesday sees the latest Riksbank decision and the Minutes of the April MPC meeting. On the supply side, the eurozone sees EUR17.5bn of supply from Germany, Spain and France; however, with redemptions and coupon flows from a variety of countries, some EUR22.85bn net will be returned to the market. Full Story

Asia Pacific China: A closer look at the March IP, FAI, property sector and retail sales data Steven Lingxiu Yang, Jian Chang, Yiping Huang Industrial production growth posted a downside surprises for the second month in a row. Investment goods production declined, in line with softer fixed-asset investment growth. Infrastructure investment remains robust, offsetting slow property and manufacturing growth. Property investment slowed, and faces more headwinds as property starts edged lower. Property sales were strong in March as the public rushed to conclude transactions before new policies take effect. Full Story

Chinese implied oil demand growth: Moderation in March, expected to pick up over the tail end of Q2 Miswin Mahesh While we expect China's implied oil demand indications to go through a soft patch over March and April (weighed down by refinery maintenance and ample inventories during this period), we expect Chinese crude demand to pick up towards the tail end of Q2 and early 15 April 2013

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Barclays | Global Macro Daily Q3 once the turnaround season is over. Demand for refined oil products, however, will start picking up earlier (from late March), with diesel demand in particular getting support from the start of the spring ploughing season. Full Story

India: Inflation springs another downside surprise; January data revision not a risk Siddhartha Sanyal, Rahul Bajoria WPI inflation moved to a 40-month low, rising just 5.96%, versus market and our expectations of 6.3%. While the upward revision in the January WPI print is large, details indicate that this is not a cause of concern, as the changes are largely reflective of previously administered price hikes. We believe today's WPI print provides ample room for RBI to cut policy rates at the May 3 policy meeting - we continue to expect the repo rate to come down to 7% my mid-2013 (7.5% currently). Full Story

Singapore: An outsized rebound in February retail sales ex-autos Joey Chew Singapore's headline retail sales contracted for the fifth straight month in February, falling 2.7% y/y. However, excluding car sales (which are in a structural decline), retail sales rose 10% y/y. We think the 7.8% m/m sa rebound in looks outsized - it is the largest monthly increase on record apart from the gains in March 1994 and June 2007, which were related to the front-loading of purchases ahead of hikes in the GST. We believe we could see a correction in March retail sales. Full Story

Thailand: Lowering our 2013 inflation forecasts; stay overweight ThaiGBs Rahul Bajoria, Rohit Arora Given the recent fall in global commodity prices, the THB's appreciation and our commodities team's downward revisions to their crude oil price forecasts, we are lowering our inflation forecasts. This year, we now expect headline inflation to be 2.9% (previously 3.6%) and core inflation to be 1.7% (previously 1.9%). For 2014, we reduce our headline inflation forecast lower to 3.2% (previously: 3.8%). The downward revisions are driven mainly by our expectations of lower fuel prices, as well as more benign demand-led price projections. Full Story

Philippines: Remittances take a pause in February Prakriti Sofat, Rahul Bajoria Remittances increased 6.0% y/y in February, below our forecast of 7.5% and 7.4% consensus. The Philippines continues to maintain a solid balance of payments position, a positive ratings trajectory, and a relatively benign inflation backdrop. This, combined with the increasing credibility of government reforms, points to eventual currency strength. With the Philippines likely on track to receive a second investment grade rating in the next six months, we remain constructive on the PHP. Full Story

North America US FI Outlook for April 15: Treasuries rally strongly on weak economic data Ajay Rajadhyaksha, Dean Maki In an environment of weakening economic data and continuing European uncertainty, the Fed is likely to maintain the status quo. With little risk premium priced into the front end, we expect any rally to be led by the longer end. Specifically, beta-weighted 5s10s curve flatteners continue to look attractive. Full Story 15 April 2013

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Barclays | Global Macro Daily

US Q1 GDP tracking: Up two-tenths to 3.0% on gain in retail inventories Peter Newland Business inventories rose 0.1% m/m in February, slightly softer than our forecast (0.2%) and the consensus (0.4%). However, the retail ex-autos component, which feeds into our GDP tracking, was up 0.4%, above our 0.2% forecast. Alongside a small upward revision to January (to 1.4% from 1.3%), this added 0.2pp to our Q1 GDP tracking estimate. Full Story

US real GDP forecast for Q1 13 lowered to 3.0% due to weak retail sales Dean Maki We have lowered our forecast for annualized Q1 2013 real GDP growth to 3.0% from 3.5%. The reason was the March retail sales report, which showed substantial downward revisions to core retail sales in January and February, as well as a decline in March. Consumer spending now looks to have grown about 2.3% in Q1 2013, whereas previous data had suggested 3.0% growth. Full Story

US retail sales revisions help solve some of the Q1 consumption puzzle Peter Newland A decline in retail sales in March and downward revisions to January and February go some way in helping to explain the seeming resilience of consumer spending in the face of tax hikes at the start of the year – spending actually was not as strong as it first appeared. Core sales declined by 0.2%, one-tenth below our forecast and three-tenths below consensus. In addition, growth in January and February was revised lower, the former from 0.3% to flat and the latter from 0.4% to 0.3%. Full Story

US consumer confidence slides at the start of Q2 Peter Newland The University of Michigan consumer confidence index declined to 72.3, from 78.6 in the preliminary April release, below our forecast (79.0) and the consensus (78.6). The softer tone is consistent with our view that consumption growth will ease in the coming months in a delayed response to the tax hikes at the start of the year - something that was evident, in our view, in the March retail sales release. Full Story

Falling energy prices push headline US PPI lower in March as core growth remains steady Cooper Howes The headline US producer price index for finished goods fell 0.6% m/m in March, close to our forecast (-0.5%) but below the consensus (-0.2%) and consistent with y/y growth of 1.1%. The decline was driven largely by energy prices, which declined 3.4% m/. Full Story

EEMEA Focus on Romania: Lunch with Cristian Popa, Deputy Governor, National Bank of Romania Christian Keller, Daniel Hewitt Please join Christian Keller (Head of EM Research) and Daniel Hewitt (EEMEA Research) for a luncheon meeting with Cristian Popa, Deputy Governor of the National Bank of Romania on Wednesday, 24 April, 1:15-3:15pm (London time). The meeting will give investors the opportunity to meet with Mr Popa in a small group setting to talk about Romania economic developments and prospects. Mr Popa will begin with an overview followed by an interactive discussion. Full Story 15 April 2013

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Barclays | Global Macro Daily

Investor Trip to Hungary and Romania Daniel Hewitt Please join Barclays senior economist Daniel Hewitt on an investor trip to Hungary and Romania. Meetings in each country will cover economic developments and prospects, growth and inflation, and overall financial markets from the points of view of local officials, the private sector, and economic/political analyst. Full Story

Turkey: MPC preview- stage is set for cuts Christian Keller The BoJ announcements have significantly altered the outlook for capital flows since the last MPC meeting, in our view. Given the still modest activity data, we think the CBT's simple formula will be: worry about growth and QE-related capital inflows now, worry about the C/A deficit and inflation later (while hoping for lower commodity prices). This should set the stage for cuts at the MPC next week. We see a 50bp cut in the borrowing rate to 4.0% and a 25bp cut in the one-week repo rate to 5.25%. Full Story

Latin America Venezuela: Turn out will be the key Alejandro Arreaza, Alejandro Grisanti As we approach Sunday's election, polls (ie, Datanalisis, IVAD) have been reporting a fast and marked closing in the gap between the chavismo candidate, Nicolas Maduro, and the opposition's Henrique Capriles Radonski. After having a large advantage less than two weeks ago, the last poll result (April 4-11) put Maduro out of his comfortable lead. If the trends hold, this could be a very close election, the final result of which could depend on the actual turn out of each side's voters. The market has already been pricing in a Maduro victory; therefore, we reiterate our call to remain long Venezuela because we believe it offers an interesting asymmetric trade opportunity. Full Story

Brazil Copom Preview: Meet the press Marcelo Salomon The next Copom meeting is on April 17. We expect the BCB to send a strong hawkish signal (possibly a split decision) on Wednesday, but to keep rates unchanged at 7.25%. Full Story

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Barclays | Global Macro Daily

THE NEXT 24 HOURS Europe Euro area – Final Inflation: We look for the final euro area March HICP inflation rate to be left unrevised at 1.7% from the preliminary estimate, consistent with a 1.2% m/m rise. Our forecast is very close to the rounding point, so we do not entirely rule out a 1.8% print if the remaining countries to publish their inflation data (Austria, Finland, Slovakia) were to yield significant upside surprises. We project the core inflation rate to accelerate 0.1pp to 1.4% although there are upside risks. Finally, we forecast the HICPx tobacco index to come at 116.95 after 115.55 in February. UK – Inflation: We forecast March CPI inflation to increase to 2.9% y/y (from 2.8% in February). We look for both RPI and RPIx to increase by 3.4% y/y (from 3.2% in February). We expect inflation to persist above the BoE's 2% target in the medium term. UK – PPI: We expect input prices to have increased by 0.5% m/m in March (from 3.2% in February) as a result of sterling weakness and an increase in electricity prices. We forecast output prices to have increased by 0.5% m/m (from 0.8% previously) with higher oil prices contributing to the increase to some extent. We forecast the increase in core output prices to slow to 0.3% m/m.

Asia Pacific No significant events or releases.

North America US – Empire State: We look for a decline to 7.5 in the April Empire State manufacturing index after a print of 9.2 in March. The index has been in positive territory for the past two months after negative prints during the prior six months, and while we expect this trend to continue, a decline would be consistent with our expectations of a softening in activity growth in Q2 after a strong Q1. US – NAHB housing market index: We look for an unchanged reading of 44 in the April print of the NAHB housing index. While this would still be well above its year-ago level of 24, it would be consistent with a slowdown in the pace of improvement in home builder sentiment.

EEMEA Turkey – Overnight Rates: We think the CBT is likely to cut the repo and borrowing rates in expectation of rising QE-related capital inflows. Poland – Core Inflation: Core inflation will likely continue to decline at an accelerating pace. Ukraine – Retail Trade: Deflation will likely maintain retail sales figures at elevated levels.

Latin America No significant events or releases.

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Barclays | Global Macro Daily

CALENDAR Monday 15 April 09:00 21:30 02:00 02:30 05:00 07:00 08:00 08:30 09:00 10:00 21:30 00:00 05:30 08:50 22:00

Tuesday 16 April 07:00 07:00 07:00 08:00 09:00 09:00 12:00 15:00 17:00 03:00 04:00 04:30 04:30 04:30 04:30 04:30 04:30 05:00 05:00 05:00 05:00 05:00 07:00 08:00 08:30 08:30 08:30 08:30 08:30 09:15 09:15 18:45 20:30 20:30 04:30 05:00 05:30

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Greece: FM Stournaras and IMF Chief Thomson speak on "Overcoming stagnation: re-igniting Greece's potential" in Athens E17: ECB President Draghi speaks at University of Amsterdam Australia: RBA board minutes Apr Peru: Economic activity index, % y/y Feb 6.8 4.3 6.2 Finland: HICP, % m/m (y/y) Mar 0.2 (3.5) 0.0 (2.6) 0.6 (2.5) India: WPI, % y/y Mar 7.31 6.62 6.84 E17: Trade balance sa, € bn Feb 10.0 10.3 8.7 R Israel: CPI, % y/y Mar 1.6 1.5 1.5 Poland: CPI, % y/y Mar 2.4 1.7 1.3 US: Empire State mfg, index Apr -7.8 10.0 9.2 US: Net long-term TIC flows, $ bn Feb 57.0 64.2 25.7 US: NAHB housing market, index Apr 47 46 44 Australia: Vehicle sales, % m/m (y/y) Mar 2.6 (17.2) -2.2 (10.9) 0.0 (9.4) Malaysia: 91d/91d/210d Bills auction Holland: DTB 31Jul2013, New 31Oct2013 France: BTF 18Jul13, 03Oct2013, 03Apr2014 Japan: 5y JGB Auction

Consensus

5.9 5.9 0.6 (2.6) 6.3 5.96 A 12.0 A 1.3 1.4 0.9 1.1 7.5 7.0 40.0 44 45 MYR1.5/1.5/1.0bn € 1-2;1-2 bn € 3.6/4 + 1.6/2 + 1.3/1.7 bn ¥ 2600 bn

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Turkey: Benchmark repo rate, % Apr 5.50 Turkey: Overnight lending rate, % Apr 8.75 Turkey: Overnight borrowing rate, % Apr 4.75 US: New York Fed President Dudley (FOMC voter) speaks in New York E17: ECB President Draghi speaks at a debate in the European Parliament in Strasbourg US: Chicago Fed President Evans (FOMC voter) speaks in Illinois US: Fed Governor Duke (FOMC voter) speaks in Washington US: Fed Vice Chair Yellen (FOMC voter) speaks in Washington US: Minneapolis Fed President Kocherlakota (FOMC non-voter) speaks in Minnesota Slovakia: HICP, % m/m ( y/y) Mar -0.1 (3.4) Austria: HICP, % m/m (y/y) Mar 0.2 (2.9) UK: CPI, % m/m (y/y) Mar 0.5 (2.7) UK: RPI, % m/m (y/y) Mar 0.5 (3.1) UK: RPIx, % m/m (y/y) Mar 0.4 (3.0) UK: Input prices, % m/m (y/y) Mar 0.1 (0.6) UK: Output prices, % m/m (y/y) Mar -0.1 (2.2) UK: Core output prices, % m/m (y/y) Mar 0.0 (1.5) E17: Final HICP, % m/m (y/y) Mar -1.0 (2.0) E17: 'Eurostat' core (HICP x fd, alc, tob, ene), % m/m (y/y) Mar 0.5 (1.5) E17: HICP ex tobacco, index (2005 = 100) Mar 116.39 E17: ZEW economic sentiment index Apr 31.2 Germany: ZEW economic expectations index Apr 31.5 Brazil: IGP-10 inflation, % m/m Apr 0.42 Poland: Core inflation, % y/y Mar 1.4 US: CPI, % m/m (y/y) Mar 0.0 (1.7) US: Core CPI, % m/m (y/y) Mar 0.1 (1.9) US: CPI, NSA index Mar 229.601 US: Housing starts, k saar Mar 982 US: Building permits, k saar Mar 909 US: Industrial production, % m/m Mar 0.1 US: Capacity utilization, % Mar 77.8 New Zealand: CPI, % q/q Q1 0.3 Australia: Leading index, % m/m Feb 0.4 Singapore: Non-oil domestic exports, % y/y Mar -16.3 Malaysia: 10.5y Bonds auction (to 30/04) Spain : 6m (18Oct2013) & 12m Letras (16Apr2014) Greece: 13-week bill

5.50 8.50 4.50

5.50 7.50 4.50

5.25 7.50 4.00

5.25 7.25 4.00

0.7 (2.5) -0.6 (2.8) -0.5 (2.7) -0.4 (3.3) -0.4 (3.3) 1.3 (1.9) 0.2 (2.1) 0.3 (1.4) 0.4 (1.8) -1.8 (1.3) 115.13 42.4 48.2 0.29 1.4 0.0 (1.6) 0.3 (1.9) 230.280 910 904 0.2 77.8 0.3 0.3 0.4

0.0 (2.2) 0.3 (2.6) 0.7 (2.8) 0.7 (3.2) 0.7 (3.2) 3.2 (2.5) 0.8 (2.3) 0.3 (1.3) ...(1.7) P 0.3 (1.3) 115.55 33.4 48.5 0.22 1.1 0.7 (2.0) 0.2 (2.0) 232.166 917 939 0.8 78.3 -0.2 0.3 -30.6

0.0 (1.9) 0.7 (2.1) 0.4 (2.9) 0.6 (3.4) 0.6 (3.4) 0.5 (1.4) 0.5 (2.1) 0.3 (1.5) 1.2 (1.7) 1.7 (1.4) 116.95 0.9 -0.1 (1.6) 0.2 (2.0) 233.0 940 0.3 78.5 0.6 -7.0

(2.2) 0.3 (2.8) 0.4 (3.3) 0.4 (3.2) -0.2 (0.7) 0.3 (2.0) 0.2 (1.4) 1.2 (1.7) (1.4) 41.0 0.30 1.0 0.0 (1.6) 0.2 (2.0) 232.943 930 943 0.2 78.4 0.5 -5.3 € 4 bn € 1.25 bn € 4 bn

Belgium: TC 18Jul13, 17Apr13

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Forecast

Note: All times are New York time. Sources: Reuters, Market News, Bloomberg, Barclays Research

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Barclays | Global Macro Daily

RESEARCH CONTACTS Larry Kantor Head of Research +1 212 412 1458 [email protected] Stu Linde Head of Equity Research +1 212 526 4009 [email protected]

Jeff Meli Co-Head of FICC Research +1 212 412 2127 [email protected]

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US

Anshul Pradhan Fixed Income Strategy +1 212 412 3681 [email protected]

Europe

Asia Pacific

15 April 2013

11

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