1. Highlights

3. Developing - country production growth easing industrial production, ch % (3 mma, saar ) High - income OECD Developing ex China Source : DECPG. World Developing countries

4. OECD developments

5. WEO Update lowers growth outlook for Europe in 2011 200920102011 Difference from April WEO 20102011 World GDP -0.6 4.64.30.4 0.0 Advanced Econ -3.2 2.62.40.3 0.0 Euro Area -4.1 1.01.30.0-0.2 Germany -4.9 1.41.60.2-0.1 Spain -3.6-0.40.60.0-0.3 Japan -5.2 2.41.80.5-0.2 United States -2.4 3.32.90.2 0.3 Source : IMF, WEO Update, July 8, 2010.

6. G -20 agrees to the principle of “ growth friendly ” fiscal consolidation Fiscal balances, %GDPPublic sector financial liabilities, %GDP Source : DECPG staff estimates.

7. Select OECD core CPI moves lower on muted goods prices tied to weaker demand core - CPI : OECD, USA, Euro Area, Spain, Japan and Ireland, ch % (3 m /3 m saar ) Source : Thomson / Datastream and DECPG calculations

8. Progress in reducing U. S. layoffs stalls adding downward pressure on retail sales unemployment claims [ L ] unemployment claims, 4- wk average ‘000 [ L ] ; retail sales ( x - auto ) volume, ch % saar [ R ] Source : U. S. Departments of Commerce and Labor.

9. U. S. investment to pick - up in second quarter with orders, exports and output higher capacity utilization (%) [ L ], growth of orders, production and export volumes ( saar ) [ R ] cap - goods orders [ R ] capacity util [ L ] Source : U. S. Department of Commerce. production [ L ] exports [ R ]

10. U. S. bank lending continues decline hitting business without access to bond markets Source : Federal Reserve of St. Louis. C & I loans [ L ] Commercial & industrial loans ($ billions ) [ L ] ; percentage change ( y / y ) [ R ]

11. German exports surge on weaker euro and foreign demand for capital goods export orders, export volumes and manufacturing output, ch % ( saar ) Source : Eurostat. export s manufacturing output export orders

12. Euro Zone household spending continues in the doldrums retail sales volumes : Euro Area, Germany, France ( mfg gds ), Italy, ch % ( y / y ) Source : Eurostat. Germany Franc e Euro Area Ita ly

13. Japan sees sobering slump in machinery orders, exports and manufacturing output machinery orders, export volumes and manufacturing output, ch % ( saar ) Source : Japan Cabinet Office. export s manufacturing output machinery orders

14. Industrial production

15. Growth in retail sales eases on weak labor markets in high - income countries Retail sales proxy, ch % ( y / y ) Sources : Thomson Datastream and DEC Prospects Group

16. Recovery continues through April / May but may be slowing Industrial production, index August 2008=100 Sources : Thomson Datastream and DEC Prospects Group

17. Sources : U. S. Census Bureau and World Bank DEC Prospects Group Positive contribution to U. S. growth of business inventories may be coming to an end Contribution to total business sales growth ( manufacturing, wholesale and retail ), seasonally adjusted

18. International Trade

20. U. S. and Japanese exports slow as East Asian demand decelerates import and export volumes, ch % (3 mma, saar ) Source : DEC Prospects Group.

21. Source : WTO.

22. Commodity Prices

26. Non-Commodity Prices

30. International Finance

31. Subdued June recovery in cross - border debt flows $ billion 200820092010 H1H1 TotalH1H1 H1H1 AprMayJun Total 18030577253154391217 Bonds 516235124912937 Banks 12924342129631199 Lat. America 386331109491517 E. Europe 841452165481245 Asia 2747144537843 Others 3251123421441

34. Foreign exchange / Inflation

35. yen/U SD USD/Euro (inverse) Euro losses start to dissipate in July yen gains appreciably vs dollar in the month USD per Euro ( inverse ) [ Left ] and Yen per USD [ right ] Source : Thomson / Datastream and DECPG calculations.

36. End of dollar - fix for Chinese RMB yields modest gains vs U. S. unit Index, RMB cross-rates, March 1, 2010=100 USD per RMB, daily: March 1 to July 16 Source : Thomson / Datastream and DECPG calculations. LCU per RMB

37. Net U. S. capital flows show dramatic “ flight to quality ” in the 6 months to March Source : Department of Commerce. net annualized flows in billions U.S. dollars

38. FOCUS