Transcript Slide 0
LIIEA Conference May 21, 2015 April 2015 Where Are The World Economies? Key Economic Metrics Source: Bloomberg Source: Bloomberg Although unemployment has improved across the globe since this time last year, there are troubling signs in other key metrics. Inflation is low globally (ex Brazil) and dangerously low in Europe. GDP is holding in there globally, but recent data in the US at least has not been as robust. This could have a potential impact on the fragile state of GDP elsewhere. 11 p.1 22 Where Are The World Economies? p.2 Key Exchange Rates JPY Per USD USD Per Euro MXN Per USD BRL Per USD USD Per GBP Conclusions The USD has been firmer across the board since mid/late 2014. Although it has been slipping the last few months. This should be a slight stimulus to the rest of the world and a slight drain on the US. Source: Bloomberg 33 Where Are The World Economies? p.3 Important Changes From Last Year Oil Oil’s tremendous drop over the past 9 months would normally been hailed in the US. However, the degree that to which the US recent recovery has been due the Shale Boom has tempered the euphoria. Despite on-going tension in the US, Saudi pumping has sent oil plummeting. S&P 500 The S&P 500, and stocks in general, have been virtually unstoppable. US 10 Year Yield Data Source: Bloomberg US long term rates, represented here by the US Government 10 year Bond Yield, have stayed lower, or gone lower, despite the halt of Federal Reserve Bond Purchases. Where Are The World Economies? Key Risk Factors US: Recent data has delayed market expectations of a rate hike this summer, now priced in for September. US: Focus will be on employment, GDP and inflation data for signs of Fed rate hike timing Europe: Greece. Europe: Focus will be on inflation data especially, as well as business confidence. Europe: Geopolitical pressures. (Ukraine) China: Slowing economic activity. China: Geopolitical issues. (South China Sea) China: Financial institution solvency. Japan: Geopolitical issues.(South China Sea) Japan: Trade Deficit. Brazil: Political Issues/Scandal Brazil: Also focus on inflation. Brazil: Increasing focus on preparation for the 2016 Olympics. Brazil: A tightening in the US will put pressure on rates to go higher in Brazil. 44 p.4 p.5 Disclaimer IMPORTANT: This presentation was prepared by Santander and the content herein is strictly confidential. Neither this presentation nor its content can be reproduced, distributed or published by the recipient or used for any purpose whatsoever without the prior written consent of Santander. Although the information contained herein was obtained from sources deemed reliable, Santander cannot guarantee the accuracy and truth thereto and makes no representation or warrant with respect to such information. Santander is not responsible for any direct losses or reduced profits that may result from the use of the information contained herein. This presentation and the opinions presented herein represent those of Santander as of the date hereof and are, therefore, subject to change. No assurance is given that a transaction can be performed in practice on the terms described in this presentation. This presentation does not constitute an offer, proposal, commitment or understanding by Santander or any of its affiliates to lend money or arrange any financing or underwrite or purchase any security, or to otherwise provide financing of any kind. Santander is not acting as your financial or other advisor or fiduciary. You should not regard any proposal, suggestion or other written or oral communication from Santander as advice or a recommendation or otherwise as expressing our view with regard to whether a particular transaction is suitable or appropriate for you or meets your financial or other objectives.