http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/12/17/DATA REVIEW Chinese data for November should further signs that the recovery is gathering traction in Q4. Industrial production rose 10.1% y/y, from 9.6% in October, while retail sales growth also accelerated up 14.9% y/y. Meanwhile fixed urban investment rose 20.7% ytd y/y from 20.5% in September. Against this backdrop consumer price pressures remain modest, with CPI inflation rising 2% y/y in November up from 1.7% in October. We expect GDP to grow 7.9% y/y in Q4, up from 7.4% in Q3.Mon, 17 Dec 2012 05:06:27 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/12/17/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/12/03/DATA REVIEW Indian GDP growth decelerated to 5.3% y/y in Q3, from 5.5% in Q2. Surprisingly, domestic demand accelerated in the quarter, while net exports were a large drag as imports increased sharply (partly reflecting a poor monsoon). Notwithstanding the pick up in investment growth, the sharp deceleration in electricity production in the quarter, following massive power outages in July, highlights the structural problems facing the Indian economy from years of inadequate infrastructureMon, 03 Dec 2012 05:19:45 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/12/03/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/11/19/DATA REVIEW China’s trade balance rose to USD32bn in October on the back of accelerating exports. While exports to more traditional markets, such as the euro area and Japan, were lacklustre, growth to ASEAN countries surged. Meanwhile, although Chinese financial data disappointed, monetary policy is still accommodative. New lending dropped to 505.2bn, from 623.2bn but importantly the share of longer term loans rose suggesting lending is becoming increasingly focused towards investment projectsMon, 19 Nov 2012 05:03:32 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/11/19/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/11/05/DATA REVIEW As expected, the Reserve Bank of India kept the key policy rate unchanged at 8%, but reduced the cash reserve ratio by a further 25bp to 4.25%. While the RBI remains constrained by high inflation and the expectation that it will rise further in the coming quarters, the downgrades to its GDP growth projection are likely to lead to further easing via macroprudential tools in the near term with an interest rate cut not forecast until H1 2013. Hungary’s central bank cut its benchmarkMon, 05 Nov 2012 05:18:47 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/11/05/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/29/DATA REVIEW South African consumer price inflation increased by more than expected in September, rising to a five month high of 5.5% y/y, from 5.0% in August. Recent wage deals and elevated global food prices could see inflation move back above the 3% to 6% target range in the coming quarters. While we are assuming interest rates remain unchanged in November, the next round of production, spending and inflation data could hold the key. A possible spreading of strike action to the public sectorMon, 29 Oct 2012 05:19:00 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/29/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/15/DATA REVIEW In what was a close call, the Brazilian central bank cut the Selic interest rate by 25bp to 7.25%. We believe this marks the end of the easing in rates. An economic recovery is underway supported by a total 500bp decline in rates in a year as well as expansionary fiscal policy. Retail sales accelerated to 10.1% y/y in August its highest annual rate in five months. Although the authorities have signaled that interest rates are likely to stay at current low levels for a prolongedMon, 15 Oct 2012 05:07:14 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/15/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/08/DATA REVIEW The National Bank of Poland surprised markets by leaving the benchmark interest rate unchanged at 4.75%. The decision to keep interest rates on hold was also in contrast to a very dovish accompanying statement. The NBP may have been reluctant to reduce interest rates so soon after May’s hike. However, we believe that given the fragile global environment and weak domestic economic conditions, particularly for households, the NBP is likely to reduce rates by 25bp in November. AfterMon, 08 Oct 2012 05:04:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/08/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/01/DATA REVIEW The Hungarian MPC reduced rates by a further 25bp to 6.0%. The cut was probably once again a close call, relying on the support of external members, who argued that a lower EUR/HUF and solid demand for Hungarian debt supports a reduction. In contrast, internal members have been more focused on the risks to the medium term outlook. We continue to see risks to the HUF due to the lack of progress on a resolution with the IMF and the weak economic outlook. This will limit the scope forMon, 01 Oct 2012 05:04:34 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/10/01/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/21/DATA REVIEW The Reserve Bank of India reduced the cash reserve ratio from 4.75% to 4.5% while keeping the repo rate unchanged at 8%. The RBI has preferred to ease liquidity measures instead of cutting interest rates directly and this trend is likely to continue as policy makers remain cautious given sticky price inflation and the risk that WPI inflation accelerates in the coming months. This could see the timing for any interest rate reduction pushed into 2013. • The central bank of Brazil cutFri, 21 Sep 2012 09:36:36 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/21/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/10/DATA REVIEW Negotiations between the Hungarian government and the IMF/EU over a new standard credit line have stalled with the government rejecting the IMF’s conditions. This was not a large surprise as we have been of the view that reaching an agreement would not be smooth sailing. Hungary’s President has stated that they will aim to restart negotiations next week but a short term solution is not on the immediate horizon and could delay further interest rate cuts. As widely expected PolandMon, 10 Sep 2012 06:14:22 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/10/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/03/DATA REVIEW Hungary’s central bank reduced the benchmark interest rate by 25bp to 6.75%. While a cut was on the cards the timing took markets by surprise. Notably, an agreement with the IMF/EU has as yet to be agreed (next meeting is scheduled for September). This may explain rates being cut by only 25bp. With the economy already in recession the next move will down and may be as early as September, although this will depend on market reaction to the recent move. India’s Q2 GDP 2012 growthMon, 03 Sep 2012 05:05:32 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/09/03/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/24/DATA REVIEW Russian data cast a cloud over the economic outlook with both investment and household spending disappointing. In particular, retail sales growth slowed to 5.1% y/y, from 6.9% in June. While the moderation in real wages growth was larger than expected at 10.2% y/y it is still supportive of healthy household spending in H2. The HSBC flash China manufacturing PMI slumped to 47.8 in August from 49.3 in July. There were sharp declines in production and new orders. While the outturnFri, 24 Aug 2012 10:30:40 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/24/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/17/DATA REVIEW Indian wholesale price inflation fell below 7% y/y for the first time since November 2009. The fuel component moderated by more than expected, while food prices were surprisingly stable. However, we do not expect these trends to sustain given the recent increase in global energy prices and poor monsoon. The RBI will continue to err on the side of caution before delivering another interest rate cut later this year as growth concerns eventually win out. The Hungarian economy slippedFri, 17 Aug 2012 12:38:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/17/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/13/DATA REVIEW Weaker than expected Chinese data for July suggest that activity has yet to bottom and poses a downside risk to our Q3 GDP forecast, circa 7.9% y/y. Weak external demand conditions (exports slowed to 1% y/y in July) are likely to be the main driver of the slowdown in industrial production to a three year low (9.2% y/y) and will continue to pose a risk to the outlook for the rest of the year. However, ongoing efforts by the government are expected to see a pick up in investment inMon, 13 Aug 2012 05:46:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/13/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/06/DATA REVIEW As expected the Reserve Bank of India left its refinancing interest rate unchanged at 8%. However, the RBI cut banks’ statutory liquidity requirement by 100bp to 23%. This is aimed at increasing banks’ lending capacity. However given the global economic backdrop and weak investment conditions the impact on kick starting economic growth is likely to be small. The RBI appears reluctant to cut interest rates at the moment, saying it will only exacerbate inflationary pressures ratherMon, 06 Aug 2012 05:06:12 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/08/06/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/30/DATA REVIEW The Bank of Israel(BOI) left its policy rate unchanged at 2.25% this week after cutting rates by 25bp in June. The rational for this was the deterioration in the fiscal position with government spending forecast to be looser than previously thought. The BOI also voiced concerns over the recent depreciation in the ILS. However, the arguments for further interest rate cuts are still strong. Economic growth indicators have deteriorated over the past month, moreover inflation hasMon, 30 Jul 2012 05:11:36 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/30/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/23/DATA REVIEW The SARB surprised markets by cutting the benchmark interest rate by 50bp to 5%, in what was called a ‘proactive’ move. The decision focused on the increase in the downside risks to the domestic growth outlook, in particular signs that domestic demand is running out of steam. But the recent easing in inflation has also led the SARB to lower their inflation forecast. More cuts cannot be ruled out, particularly as uncertainty over the global economic outlook is likely to remain butMon, 23 Jul 2012 05:04:00 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/23/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/16/DATA REVIEW Bank of Korea surprised markets by reducing its benchmark interest rate by 25bp to 3%, in what the Governor described as a ‘pre-emptive’ move. The long-standing reference to ‘high inflation expectations’ was notably absent from the accompanying statement and with emphasis on the deteriorating outlook we now expect one more 25bp rate cut in Q3. Indian industrial production rose by a stronger than forecast 2.4% y/y, from a downward revised -0.9% y/y in April (previously 0.1%).Mon, 16 Jul 2012 06:27:31 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/16/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/09/DATA REVIEW The Chinese authorities cut interest rates for the second time in just under a month in a bid to stimulate economic growth. The corridor between the prime lending rate and the deposit rate was narrowed with the lending rate to fall by 31bp to 6.0% and the deposit rate by 25bp to 3%. At the same time, the floor to the lending rate that banks can offer was reduced to 30% below the prime lending rate, or effectively market lending rates can be offered as low as 4.2%. This is theMon, 09 Jul 2012 04:57:12 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/07/09/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/29/DATA REVIEW Measures announced by the Reserve Bank of India to stem the depreciation in the INR fell short of expectations and are likely to increase the dependence on debt capital inflows. The fundamental problems facing the Indian economy, including slowing domestic economic activity, persistently large twin deficits and an unfavourable investment environment, notably in infrastructure, remain. As such the pressures that saw INR depreciate by more than 20% against the USD in the past yearFri, 29 Jun 2012 10:42:24 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/29/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/22/DATA REVIEW The HSBC ‘flash’ China manufacturing PMI fell to 48.1 in June, from 48.4 in May and is the lowest reading in seven months. The new export orders index slumped to a three-year low of 45.9, raising concerns about external demand. The Reserve Bank of India (RBI) unexpectedly kept the repo rate at 8% and the CRR steady at 4.75% on Monday. The accompanying Monetary Policy Review (MPR) noted that the RBI had ‘frontloaded’ the policy rate reduction with a 50bp cut in April and felt that aFri, 22 Jun 2012 12:06:47 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/22/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/15/DATA REVIEW Recent Chinese data confirmed that domestic activity was subdued in May. In particular consumer price inflation fell to 3% y/y from 3.4% in April – its slowest rate in two years. Industrial production rose by 9.6% y/y in May, from 9.3% in April, on the back of a modest recovery in capital goods manufacturing. While it is too early to say that this represents a turning point in investment it is nonetheless a positive sign, particularly as new lending growth was stronger thanFri, 15 Jun 2012 10:01:04 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/15/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/08/Although further policy easing by the Chinese authorities was expected, the timing of the announcement does raise the possibility that forthcoming economic data, including industrial production and consumer price inflation (to be released on Saturday) will be particularly weak. The hikes in interest rates in 2011 usually preceded very strong consumer price inflation figures. Indeed, weekly food data suggests that food prices fell in May and we look for consumer price inflation to have eased toFri, 08 Jun 2012 14:11:48 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/08/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/04/LAST WEEK India’s GDP growth slowed to a seven year low of 5.3% y/y in Q1 from 6.1% in Q4 2011 and saw USD/INR reach a new record high of 56.515 in intra-day trading. Manufacturing activity was a key driver behind the slowdown although it appears growth in household spending also eased. However, the Reserve Bank of India is in a difficult position of balancing GDP growth on the one hand against controlling inflation. We still look for the RBI to cut interest rates by 50bp at their next meetingMon, 04 Jun 2012 05:07:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/06/04/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/28/LAST WEEK The SARB left interest rates unchanged at 5.5%, whilst highlighting the downside risks of the euro area crisis on the South African economy. To date the recovery has been uneven and we expect GDP growth slowed to 1.8% saar in Q1 from 3.2% in Q4 2011. Mining production fell 5.5% in Q1, although this was largely due to strikes. However, retail sales volumes also declined in the quarter. Nonetheless, with inflation forecast to hover above the SARB’s 3-6% target band for most of 2012 weMon, 28 May 2012 05:57:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/28/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/21/LAST WEEK Following April’s weaker than expected data, the People’s Bank of China cut bank reserve ratios by 50bp. The ratio for large banks has been reduced by 150bp since December 2011 and now stands at a thirteen month low. The current low inflation environment provides the scope for further easing and we look for an additional 50bp cut in the reserve ratio in Q3 as well as possible tax incentives to support non-residential investment. India’s wholesale price inflation accelerated to 7.2%Mon, 21 May 2012 07:42:27 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/21/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/11/LAST WEEK The National Bank of Poland surprised markets by raising its benchmark interest rate by 25bp to 4.75%. The timing of the rate hike could be questioned given this month’s weaker domestic economic data coupled with a deterioration in sentiment over the survival of the euro. However, as indicated by the communiqué and press conference following the decision, the authorities are trying to normalise policy as they combat elevated inflation and expectations. Although inflation hasFri, 11 May 2012 13:34:19 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/11/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/07/LAST WEEK China’s official manufacturing PMI index rose to 53.3 in April from 53.1 in March. Although this was slightly weaker than expected, output rose to 57.2 from 55.2 in March - its highest level since April 2011. And although new orders eased back in the month, they remain in positive territory and export orders rose for the third consecutive month. An increase in electricity and gas tariffs in April by 9% and 19% respectively, was the primary driver behind the increase in TurkishMon, 07 May 2012 05:29:34 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/05/07/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/30/LAST WEEK In line with expectations, the South Korean economy expanded 0.9% q/q/ in Q1, accelerating from 0.3% in Q4 2011. The rebound in GDP was broad based with household spending and exports in particular recording solid quarterly growth. We believe that we have passed the worst of the economic slowdown and look for stronger Asian GDP growth to underpin an improvement in exports and investment as the year progresses. We expect GDP to grow by 3.4% in 2012. Meanwhile, the Brazilian COPOMMon, 30 Apr 2012 06:19:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/30/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/23/LAST WEEK The People’s Bank of China (PboC) announced that the trading band for the CNY against the USD would be widened to ±1.0% from ±0.5% previously. The move follows an increase in quotas for foreigners buying stocks and bonds in China as well as the amount of CNY held offshore that can be invested locally. The policy changes show that the authorities are committed to (gradually) moving to a more flexible fx market but we do not think that they are sufficiently large enough to cause anyMon, 23 Apr 2012 07:35:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/23/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/13/LAST WEEK Chinese GDP growth slowed to 8.1% y/y in Q1 2012, from 8.9% in the last three months of 2011. This was the slowest annual rate since Q2 2009. However, this moderation in activity is still consistent with our forecast of 8.5% GDP growth for 2012. Moreover, monthly data for industrial production and retail sales shows that activity accelerated at quarter ennd. Industrial production rose 11.9% y/y in March, compared to 11.4% in January-February. Retail sales also accelerated in March,Fri, 13 Apr 2012 13:10:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/13/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/06/LAST WEEK As expected, the Polish MPC left the benchmark interest rate at 4.5%. We had believed that with economic growth set to slow this year and the euro area sovereign debt crisis far from resolved, the MPC would be reluctant to tighten policy however, the accompanying statement and press conference suggested that an interest rate hike is imminent. While we look for a 25bp rate hike in May, this is likely to be a ‘one off’ and does not represent a significant shift in policy. Turkish GDPFri, 06 Apr 2012 06:00:08 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/04/06/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/30/LAST WEEK The Bank of Israel held its benchmark interest rate at 2.5%. However, the tone of the accompanying press statement was notably less dovish reflecting upward revisions to the economic outlook since December 2011.The BOI raised its 2012 GDP forecast to 3.1%, from 2.8% previously, noting the improvement in the global economic backdrop. The 2012 inflation projection was also raised, even with an underlying assumption of interest rates at 2.5% compared to 2.2% previously. The BOI forecastFri, 30 Mar 2012 11:53:33 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/30/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/26/LAST WEEK The HSBC ‘flash’ manufacturing PMI for China fell to 48.1 in March from 49.6 previously, reigniting fears of a ‘hard’ landing. However, we are cautious about placing too much weight on this survey. Not only has the HSBC PMI underperformed the official PMI but orders rose in March according to officials. Nonetheless, as credit growth moderates and consumer price inflation slows we still expect further monetary policy loosening and we forecast another cut in the bank required reserveMon, 26 Mar 2012 05:57:10 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/26/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/12/LAST WEEK After falling 0.1% q/q in Q3, the Brazilian economy experienced a modest recovery in the final quarter of 2011, increasing 0.3% q/q (1.4% y/y). Looking at the details it is clear that the Brazilian economy continues to run at two distinct speeds with service sector growth once again outstripping that of the manufacturing sector. Manufacturing activity contracted for the third consecutive quarter as a strong BRL and rising costs have eroded manufacturing competitiveness. This has ledMon, 12 Mar 2012 05:25:39 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/12/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/05/LAST WEEK The Chinese manufacturing PMI survey rose for the third consecutive month in February to 51.0 from 50.5 in January. The outlook for manufacturing activity improved with new orders increasing to their highest level since September 2011, driven by a surge in export orders. The outcome was broadly expected and we do not believe this will deter the Chinese authorities from continuing to ease monetary policy. As expected, the annual pace of Indian GDP growth slowed for the fourthMon, 05 Mar 2012 05:24:22 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/03/05/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/24/LAST WEEK China cut the required reserve ratio (RRR) for all banks by 50bp, starting from 24 February. This is the second reduction in the last three months. The main reason is to bolster banking sector liquidity and support lending. Further declines in the RRR are expected in the coming months and a cut in policy interest rates later this year cannot be excluded. The Thai economy contracted by a sharper-than-expected 10.7% qoq in Q4 2011. Annual GDP growth slumped to just 0.1% in 2011, fromFri, 24 Feb 2012 10:38:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/24/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/17/LAST WEEK India’s wholesale price inflation fell to 6.55% in January – its lowest annual rate in two years. However forward looking indicators suggest that economic activity should pick up again. Firms are reporting that new orders are showing their strongest improvement since May 2011. Meanwhile manufacturing prices remain elevated, and indications are that manufacturers are attempting to pass on some of their cost rises to buyers. Consequently the argument for an immediate cut in interestFri, 17 Feb 2012 12:06:49 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/17/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/13/LAST WEEK Chinese consumer price inflation surprised on the upside accelerating to 4.5% y/y in January from 4.1% y/y in December. Although the increase, led by food prices, was stronger than expected – it does not alter the picture of moderating underlying inflationary pressures. Excluding fresh vegetables and fruit, inflation eased to 3.9% y/y from 4.5% in December. The higher inflation reading is unlikely to alter the Chinese authorities’ monetary policy decisions. In particular, whileMon, 13 Feb 2012 07:38:39 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/13/http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/06/LAST WEEK China’s official manufacturing PMI index unexpectedly rose in January to 50.5 from 50.3 in December. Although the index remains only slightly above the 50 expansion level, there are some positive signs that the underlying momentum in the manufacturing sector will remain firm in the coming months, supporting our forecast of a moderate slowdown in Q1 GDP growth. In particular, output rose to 53.6 from 53.4 in December - its highest level since April 2011. New orders were also backMon, 06 Feb 2012 06:36:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2012/02/06/