http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-20.htmlPassé. The deep global recession in conjunction with the free fall in oil prices last year sent inflation plunging and has even seen inflation rates slide into negative territory. The deflationary intermezzo is, however, now over (pages 3-5 & 6-8). EMU. As early as the turn of this year, consumer price inflation should spike again to 1%. But the sole reasons for this are the again rising oil price and the reversal of the once so beneficial base effect of the oil price decline. This doesFri, 20 Nov 2009 13:03:44 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-13.htmlReview. It is now official: In the third quarter, the eurozone emerged from the deepest recession since the Great Depression. With +0.4%, EMUwideGDP posted its first expansion again since the beginning of 2008, although it was slightly below consensus. Germany and Italy led the pack in terms of growth. France disappointed, while the Spanish economy continued to contract. Preview. Even though the momentum still carried over into the fourth quarter, the (pace of the) recovery is not sustainable.Fri, 13 Nov 2009 14:43:39 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-06.htmlExit. A rapid removal of ZIRP by major central banks is not imminent. Factors arguing against this are doubts about the sustainability of the economic recovery, low (core) inflation and stable inflation expectations, as well as the strong headwinds impeding consumption and investment. There are, however, growing signs of a (verbally prepared) gradual scaling back of the more-than-generous liquidity supply measures. Fed. The Federal Open Market Committee probably had an intense discussion ofFri, 06 Nov 2009 12:23:29 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-11-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-30.htmlPressure. The monetary policy debate has started to heat up recently. Robust growth, normalization of financial markets, rising equity and commodity prices and a weaker USD are fueling demands for a rapid removal of the Fed’s ultra-expansionary policy. Even near-term rate hikes are a subject of speculation. Facts. We, however, think such demands are excessive. Most Fed officials harbor doubts – and rightly so – about the sustainability of the current strength of the upswing. Furthermore, aFri, 30 Oct 2009 12:26:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-23.htmlUS. The GDP numbers for the third quarter being released this coming Thursday should show that the US has emerged with gusto from the most severe recession of the post World War II era. We expect growth at an annual rate of 3¾% (pages 5-7). Outlook. This momentum will also carry the US economy into next year. At that time, however, once stockpiles have been replenished and the federal demand programs have expired, growth will slow again to well below trend – without however slipping back intoFri, 23 Oct 2009 12:31:57 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-23.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-16.htmlRecovery. The global economy is recovering, and there is mounting evidence that the third quarter was probably strong. Nevertheless, there are lingering doubts about the sustainability of the upswing. We are sticking to our picture of a W-shaped recovery – without expecting a relapse into recession. Doubts. The reason for our caution is the sluggish private sector. The spark of global trade will not make the jump to consumption and investment activity since households and businesses have toFri, 16 Oct 2009 12:46:00 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-16.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-09.htmlUpward. The global economy is clearly back on a growth path. Real GDP in the US as well as in Germany should even have posted strong growth in the past quarter. But we also expect the rest of Europe to have grown again for the first time since the beginning of 2008. The tangible recovery also looks set to continue in the current quarter. Thereafter, however, the momentum should slow appreciably. We do not, however, expect a renewed slide into recession. US. But in spring 2010, the US economyFri, 09 Oct 2009 13:28:27 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-02.htmlStragglers. While the big two had achieved the economic turnaround as far back as the spring thanks to the earlier & stronger recovery of global trade as well as the massive monetary and fiscal policy stimuli, the remainder of Europe (except for Spain) now appears to be following suit. The recession has now run its course for the European stragglers, too. Italy. That also holds true for the third-largest economy in the euro zone. For the summer quarter, we do, however, expect economicFri, 02 Oct 2009 11:20:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-10-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-25.htmlConcerns. The palpable recovery of the global economy, in conjunction with skyrocketing government debt and ballooning central bank balance sheets as a visible sign of the massive injection of liquidity, is fueling fears among investors of a (later) resurgence of inflation. The argument here is that governments want to unload debt “without paying the piper”. Confidence. We, however, do not share this view. While headline inflation will almost certainly move out of negative territory andFri, 25 Sep 2009 14:22:02 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-25.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-18.htmlRebound. The global economy has clearly returned to a growth path. The expansion could even be pretty robust in the second half of this year. The recession in the US, for example, probably ended in August (see chart below). US. For the current quarter, we expect US growth at an annual rate of 3¾%. But what is still missing for a self-sustaining upswing is the support of private consumption. For that reason, the pace of growth will slow again to a meager ½% by mid-2010 before accelerating againFri, 18 Sep 2009 12:27:33 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-18.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-11.htmlUnity. The major central banks are in agreement: Yes, the economic outlook has improved appreciably of late; but no, this need not necessarily translate into a sustained upswing. The Fed, the ECB, and the BoE already issued statements to this effect recently. The BoJ and the SNB should also adopt this line next week and contradict a quick monetary policy reversal. Criticism. We too still see no reason for excessive optimism, above all concerning the economy next year, when important temporaryFri, 11 Sep 2009 11:41:11 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-04.htmlRebound. Business sentiment around the globe has continued to improve strongly recently, in some cases at a pace comparable to the slump that followed on the heels of the Lehman collapse. The assessment of demand in industry is now clearly expansionary again in most important economies. The new order component of the Manufacturing ISM in the US even jumped to its highest level since the end of 2004! ECB. As a result, the ECB also had to revise up its growth forecasts. It assumes the recessionFri, 04 Sep 2009 13:30:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-09-04.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-08-07.htmlGlobal economy. The global recession is winding down and global GDP is expected to return to growth this quarter. Soft as well as hard data are clearly heading north. The pacesetters are Emerging Asia and there are even promising developments in Japan. The global economic recovery, however, will be rather moderate and bumpy; we expect a W-shaped recovery. US. Real US GDP will likely see robust growth in Q3 with 3¾% on an annualized basis, due to the government stimulus program, theFri, 07 Aug 2009 13:11:16 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-08-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-31.htmlEurope. China and Asian emerging countries have already seen the trend reversal. Germany and the US are now following suit. Both will see positive GDP growth again in the current quarter. The rest of Europe is, however, still lagging behind. But here too, the worst is already behind us. And at the turn of the year, we expect growth again for the whole of Europe. The (global) recovery will, however, be moderate and pretty bumpy. Italy. When the GDP numbers are released this coming Friday, itFri, 31 Jul 2009 12:34:25 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-31.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-24.htmlUpswing. After a long dry patch, the signs again point to recovery – in both the US and Germany. The recovery will, however, be little more than a (technical) rebound. The threat of setbacks is already looming again for the first half of 2010. That is stirring up memories of the doubledip recession at the beginning of the 80s in the US. Double dip? We, however, do not want to go that far. While there are parallels – such as the inventory cycle and the oil price – a less actionist,Fri, 24 Jul 2009 12:52:03 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-17.htmlImprovement. There is mounting evidence to suggest that the global economy is on the road to recovery. China has led the way and achieved the turnaround as far back as spring. According to our calculations, Chinese growth in the more informative qoq comparison was back in double digits. At the end of 2008, the trough was only close to 4%. The US is now following suit. For the current quarter, we expect real GDP to grow by 2½% annualized. Setback. But there are also increasing signs that theFri, 17 Jul 2009 12:05:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-10.htmlConfidence. Hopes for a notable global economic recovery are increasing. China already managed the turnaround, and the US economy will grow again in the current quarter – at least at a rate of 2% annualized. At the same time, the upside risks are increasing further in Germany after this week's sensational bang for new orders and production. Skepticism. But more than a technical recovery should not be expected for the second half of this year. It will be merely a reaction to the previous rapidFri, 10 Jul 2009 13:04:33 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-03.htmlSentiment. Despite some setbacks, most of the leading and sentiment indicators continue to point north. The US manufacturing ISM, for example, jumped to a level now indicating expansion in the overall economy. As a result, the recession probability fell below 50% for the first time since summer 2008 (cf. chart). Hope. The US NBER must, however, wait for more hard data before it can declare the recession to be officially over (pages 4-6). Nevertheless, recent developments support ourFri, 03 Jul 2009 12:08:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-07-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-26.htmlStabilization. Even though the "green shoot" euphoria has been replaced by a greater sense of reality recently, the worst is nonetheless behind us, and the global economy should stabilize in the second half of the year – thanks primarily to the billions in economic stimuli programs. Debt. The flip side of this is ballooning government borrowing. The US budget deficit will probably rise to 13% of GDP this year and also remain in double digits in 2010. The dimensions may be smaller in theFri, 26 Jun 2009 13:07:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-26.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-19.htmlHope. The global economy is still contracting. There are, however, growing signs that global GDP will stabilize in the second half of this year and can return to a growth path in 2010. Hopes of a pronounced, V-shaped recovery are, however, still misplaced. Adjustment. The restructuring in the private sector has, namely, not yet been completed. Debt levels have to be reduced further, even though substantial progress has already been made in, for example, the US. For that reason, households andFri, 19 Jun 2009 12:51:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-19.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-12.htmlStress. In the last two weeks, 30Y US mortgage rates have jumped about 75 basis points. The primary catalyst was a renewed upturn in inflation expectations. A continuation of this development would jeopardize the signs of gradual stabilization in the US housing market (pages 3-7). Speculation. In conjunction with the better-than-expected non-farm payroll figure last week, investors are already pricing in rate hikes by the Federal Reserve. The probability of tightening by the end of 2009 isFri, 12 Jun 2009 12:52:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-05.htmlFloor. The ECB held its key interest rate unchanged at a record-low 1.0% at the June meeting. This underscores that the floor – as already previously at other large central banks – has, therefore, probably been reached. In the current (economic) environment, the short-term interest rate level is considered appropriate (page 2). Purchase. The direct purchase of EUR 60 bn in covered bonds, already announced in the previous month, will get under way in July. The central bank is hoping forFri, 05 Jun 2009 11:23:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-06-05.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-29.htmlHope. The severe US recession will most probably end in the second half of the year. Many market observers are betting on a rapid, strong and sustained upswing thereafter. They are drawing support from the renewed strong gains this week in sentiment and leading indicators. Exaggerated. It should not, however, be overlooked that most of these indicators had still posted record lows at the turn of the year. Even after the recent strong gains, current levels imply little more than a moderateFri, 29 May 2009 13:03:26 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-29.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-22.htmlRecession. There is no doubt that the global economy is still mired in recession and that the economic numbers for the first quarter were catastrophic. But that’s now all water under the bridge! The worst is already behind us. The economic contraction is slowing perceptively, and many leading, sentiment & financial market indicators are pointing north. Hope. Some are even rising so strongly that the expectation of a rapid, strong & sustainable recovery appears to be gaining traction.Fri, 22 May 2009 12:45:04 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-22.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-15.htmlLight. The recession in the eurozone worsened further at the beginning of the year. At -2.5%, GDP posted its highest ever q-o-q decline. However, contrary to the chilling view in the rearview mirror, the latest economic indicators now no longer rule out a more rapid and stronger improvement (page 2). Shade. Despite the potential for positive surprises in the short term, we must overall probably expect only a gradual recovery. One of the biggest obstacles to a strong upswing is the laborFri, 15 May 2009 11:21:54 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-15.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-08.htmlEasing. At its May meeting, the ECB lowered its key interest rate to 1.0%. As a result, it has probably reached the low point. Instead, additional unconventional measures are being implemented. Full allocation of Refi operations is, as expected, being extended to 12 months. Moreover, the Governing Council agreed to purchase covered bonds (page 2). Uncertainty. The Fed and the BoE are already pursuing direct purchases of securities (page 8). This week, the BoE more than doubled its program toFri, 08 May 2009 12:51:49 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-05-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-30.htmlTrough. The downward revisions to GDP in the eurozone have continued at a brisk pace recently, since it is now considered a done deal that the recession deepened further in the first quarter – in contrast to the US, where the rate of contraction slowed marginally. The across-the-board improvement in the leading indicators, however, suggests that the pace of the recession will at least slow appreciably in the coming months (pages 5-6). Tension. The situation on the credit markets, however,Thu, 30 Apr 2009 14:49:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-24.htmlRecession. When GDP numbers are released mid next week, it should become evident that the US economy was still mired deep in the recession in Q1 2009. We expect real GDP to have shrunk by 4½% annualized, following the -6.3% in Q4 2008. Destocking. Alongside investment, the rapid inventory rundown was the main drag on growth. We expect real inventories to decline at an annual rate of USD 95 bn or 5½%. That would be the strongest inventory correction in 60 years. But as paradoxical as it mayFri, 24 Apr 2009 13:21:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-17.htmlHope. The silver lining on the economic horizon appears to be getting brighter: Equities succeeded in defending their recent gains, and some forward-looking sentiment and leading indicators are showing initial “signs of life”. That is fueling our expectation that the economy will stabilize in the course of the second half of this year. But this is still nothing more than hope! D isappointment. The hard near-time data continue, however, to tell a different tale: The slump in global industrialFri, 17 Apr 2009 12:49:45 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-10.htmlFalse start. It is difficult to imagine a worse start to the year in Germany: Foreign demand basically collapsed, construction activity plummeted because of both a harsh winter as well as falling investment, and industrial production remains in free fall (pages 3-6 & chart below). Scrapping premium. The situation would have been even worse had it not been for the old car scrapping premium! The German success in terms of economic stimulus ensured private consumption was able to postFri, 10 Apr 2009 14:39:24 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-03.htmlMissing links. Billions in bailout and economic stimulus programs, zero interest rate policy and quantitative easing – the list of economic policy achievements thus far is impressive. But the final touches needed to revive confidence and return the global economy to a growth path are an end to the meltdown in house prices and a convincing new global financial architecture. G-20 meeting. It is true that banks should be more strictly regulated, oversight improved, and funding for theFri, 03 Apr 2009 12:44:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-04-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-27.htmlAll in. The Fed and the US Treasury are now throwing everything into the battle to eliminate dislocations in the financial system, avert a deflationary spiral, and generate growth again over the medium term. Their reasoning is that the US remains mired in a deep recession.  Initiatives. This week, the US Treasury fleshed out its Financial Stability Plan. The core of the scheme is a Public-Private Partnership Investment Program, now also providing funds and guarantees for “legacy loans".Fri, 27 Mar 2009 14:08:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-20.htmlHouseholds. The US personal savings rate has literally skyrocketed to 5% in recent months. One year ago, it was near zero. The culprits are the despondent labor market, but primarily the gigantic losses of wealth. They are now equivalent to 1½ times annual income. That will drive the savings rate still higher (cf. chart), imparting a continuing drag on consumption (pages 3-5). Companies. Corporate results are also coming under increasing pressure. The earnings erosion in the first year of theFri, 20 Mar 2009 12:46:36 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-13.html■ Wake-up call . Hopes for an economic recovery in the course of the second half of the year disappeared. EMU-wide business climate continues to deteriorate, industrial production is in free fall, the credit crunch is only just starting to have a full impact, and global trade is declining at a rate last seen during the Great Depression. ■ Revision . That hits Europe particularly hard. The EMU-wide recession in the eurozone is, therefore, becoming more pronounced and will also last longer thanFri, 13 Mar 2009 14:14:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-06.html■ Contraction . The depth of the US recession is now also evident in the official growth numbers. The 6.2% contraction of real GDP in the last three months of 2008 was the worst reading in 25 years. And the current quarter is unlikely to be much better with close to -4%. ■ Dry patch . In addition, we do not expect the first quarter of tangible real GDP growth before the end of 2009, once the billions earmarked for the economic programs combined with the ultra-expansionary monetary policy haveFri, 06 Mar 2009 13:53:53 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-03-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-27.htmlDisappointment. The unexpected setback in the purchasing managers indices has dampened hopes of a rapid trend reversal for the euro-zone economy. The miserable state of the economy at the end of the year will continue in the first quarter. GDP will contract strongly again at the beginning of the year (page 17). Hope. In contrast, the second consecutive strong gain in the Ifo expectations component this week has underpinned hopes of an improvement after mid-year. Ifo expectations are the mostFri, 27 Feb 2009 13:40:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-20.html■ Stimulus package. The largest US fiscal program of all time is a done deal. The USD 787 bn American Recovery and Reinvestment Act provides for tax breaks totaling just over USD 200 bn; the remaining threequarters are slated for additional federal expenditures. Furthermore, Obama has spelled out the details of a massive increase in aid for homeowners at risk of foreclosure (pages 5-7). ■ Impulses. We expect the latest fiscal package to create or preserve up to 3½ million jobs and generateFri, 20 Feb 2009 15:09:25 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-13.htmlLayoffs. Labor markets are reacting to the dramatic economic downturn more quickly than during previous cycles. Within the space of just a few months, unemployment around the globe has skyrocketed. As a result, it appears to be losing its character as a lagging indicator. The main reason for this is the deregulation of labor markets. US & EMU. The US unemployment rate, for example, has jumped almost 2 percentage points over the last six months and, therefore, at the fastest pace in theFri, 13 Feb 2009 13:23:16 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-06.htmlSilver lining. This week brought a spark of hope after economists were forced to constantly revise downward their forecasts after economic numbers fell like a stone. Some important economic barometers now turned north – albeit from extremely low levels (cf. chart). Hope. It was, however, only the forward-looking indicators that regained some traction. And the improvements still have to be confirmed in the coming months before the all-clear can be sounded. But even then, this would onlyFri, 06 Feb 2009 13:24:53 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-02-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-01-30.htmlFed . After it already adopted a Zero Interest Rate Policy last December, the FOMC had no alternative this week but to reaffirm its commitment to keep the monetary floodgates wide open – at least as long as the traditional credit channels remain frozen and the recession continues unabated. It even stated its willingness to increasingly buy longer-term Treasuries to improve conditions in private credit markets (pages 3-4). Supporting measures . The Fed balance sheet shows that the US hasFri, 30 Jan 2009 14:12:32 GMThttp://www.fxstreet.com/fundamental/analysis-reports/communication@unicreditgroup.eu (UniCredit Group)http://www.fxstreet.com/fundamental/analysis-reports/friday-notes/2009-01-30.html