CIBC`s Monthly FX Outlook

Monthly FX Outlook
June 18, 2015
Currency Strategy Highlights
• The USD has languished recently despite economic data proving that Q1’s weakness was
Economics
Royce Mendes
ECONOMICS
TORONTO
(416) 594-7354
[email protected]
Andrew Grantham
ECONOMICS
TORONTO
(416) 956-3219
[email protected]
Jeremy Stretch
MACRO STRATEGY
LONDON
+44 (0) 207-234-7232
[email protected]
Patrick Bennett
MACRO STRATEGY
HONG KONG
+852 3907 6351
[email protected]
John H Welch
MACRO STRATEGY
TORONTO
(416) 956-6983
[email protected]
http://research.
cibcwm.com/res/Eco/
EcoResearch.html
largely transitory. Nevertheless, look for the USD to gain strength as the Fed’s first rate
hike approaches in September.
• Over the past month the loonie lost momentum as data disappointed, oil prices took
a breather and the Bank of Canada called out the currency’s appreciation. With no
imminent domestic catalysts for strength, look for CAD to weaken to 1.27 as the USD
regains broad strength ahead of liftoff.
Events
to
Watch
in
Coming Month
• Developments in the Greek saga over the next month are likely to support higher levels
of volatility in the EUR, peripheral spreads and European equities.
• The Minutes of the June FOMC meeting will be published on July 8th. Markets will be
keenly focussed on any discussions about the timing and pace of rate increases.
• The Bank of Canada will be publishing its latest interest rate decision and providing
markets with updated forecasts on July 15th. The Governing Council will have the chance
to publish its assessment of the economy’s recovery after the Q1 disappointment. We’re
interested to see how confident the BoC is in its projected second-half recovery.
Currency Outlook
End of period:
18-Jun-15 2015 III 2015 IV
US$ Rates:
USDCAD
EURUSD
USDJPY
GBPUSD
USDCHF
AUDUSD
USDBRL
USDMXN
USDKRW
USDCNY
USDSGD
USDTWD
USDMYR
USDINR
Other Crosses:
CADJPY
AUDCAD
GBPCAD
EURCAD
EURJPY
EURGBP
EURCHF
EURSEK
EURNOK
2016 I
2016 II 2016 III 2016 IV
1.22
1.14
123
1.59
0.92
0.78
3.05
15.23
1107
6.21
1.33
30.7
3.71
63.7
1.27
1.05
126
1.52
1.00
0.73
3.02
14.93
1130
6.20
1.35
31.0
3.80
64.5
1.26
1.08
126
1.57
0.99
0.75
3.13
14.85
1120
6.20
1.36
31.5
3.75
64.0
1.24
1.12
125
1.61
0.96
0.77
3.18
14.80
1110
6.18
1.34
31.0
3.65
63.5
1.23
1.15
122
1.60
0.94
0.79
3.22
14.79
1100
6.16
1.32
30.0
3.55
63.0
1.22
1.18
120
1.61
0.92
0.82
3.21
14.80
1085
6.14
1.30
29.9
3.45
62.5
1.24
1.21
118
1.61
0.90
0.85
3.21
14.83
1070
6.12
1.28
29.8
3.40
61.5
101
0.95
1.93
1.39
140
0.72
1.04
9.22
8.79
99
0.93
1.93
1.33
132
0.69
1.05
9.35
8.45
100
0.95
1.97
1.36
136
0.69
1.07
9.30
8.35
101
0.95
2.00
1.39
140
0.70
1.08
9.20
8.25
99
0.97
1.96
1.41
140
0.72
1.08
9.10
8.22
98
1.00
1.96
1.44
142
0.74
1.09
9.00
8.20
95
1.05
2.00
1.50
143
0.75
1.09
8.95
8.15
CIBC World Markets Inc. • PO Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 • Bloomberg @ CIBC • (416) 594-7000
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CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
What’s Wrong with the US Dollar?
expect the USD to shrug off some of these more
idiosyncratic factors, and make one more move higher
around the time of the first rate hike.
Economic data has been solid over the past month
and the US recovery looks like it’s back on track.
However the currency is barely treading water against
other majors. So what’s wrong with the USD? It’s
certainly not the domestic economy. Payrolls were way
ahead of consensus, retail sales revealed that the US
consumer was out spending as early as March and the
ISM manufacturing index suggested that new orders
were growing. The headwinds facing the US dollar
have instead come from factors supporting foreign
currencies (and the somewhat dovish interest rate
projections from the Fed), which have outweighed the
effects of strong US data.
Lower Flight Path for the Loonie
The second half of May saw the loonie reverse course
and depreciate versus the USD. That was primarily
driven by three key factors. The economy suffered a
surprise contraction in the first quarter, the rally in oil
prices stalled, and the Bank of Canada put the currency
on notice.
With Q1 GDP coming in well below expectations and
many 2015 growth forecasts being lowered, the loonie
came under pressure from renewed risks of a rate cut.
Our forecast continues to see the economy take longer
to fully recover from the oil price shock than most
expect, which should restrain the currency moving
forward. However, we don’t believe it will be enough
to cause the BoC to actually cut rates.
In the euro area, economic data has surprised to
the upside to an even greater extent than in the US
(Chart 1). As a result of the positive data and the sharp
normalization of extremely low yields, the EUR has
performed well against the USD.
It’s a similar story for the yen as Japanese data releases
have surprised investors. But the yen also caught a
bid after the Governor of the BoJ made statements
suggesting that he didn’t believe the currency would
depreciate much further against the US dollar.
With regard to oil prices, they ended a two-month
march higher and have since been range-bound,
trading below $62 since mid-May. As a result, volatility
has plummeted (Chart 2, left). Although prices could
move higher next year, the market is still flush with
supply which should restrain them in the near term.
Going forward, we expect markets to change their
tune. With the US recovery on firmer ground, a
September rate hike by the Fed remains our forecast.
That should lift US yields and cause the spread between
Treasuries and Bunds/JGBs to widen again. So we
Finally, in the 40 days between interest rate decisions,
USDCAD averaged 1.21 and hit a low of 1.19 (Chart 2,
right). As a result, the BoC took aim at the currency in
its most recent interest rate announcement saying that
Chart 2 - Oil Prices Have Settled into a Range Around $60 (L),
While CAD Strength Forced Bank to Take Verbal Action (R)
Chart 1 - US Data Releases Have Surprised…Just Not
Enough (L), Causing EUR and JPY to Outperform (R)
Change in Economic
Surprise Index Since June 1
20
4
Currency Movements
Since June 1 (%)
60
3
2
15
1
55
1.30
50
1.25
45
1.20
40
1.15
Canadian Dollar
Days
Between
BoC Rate
Decisions
0
10
-1
-2
5
-3
0
WTI 90 Day Volatility 1.35
US
EZ
Japan
-4
01-Jun
USD Index
EUR
JPY
05-Jun
09-Jun
Source: Bloomberg, CIBC
Source: Bloomberg, CIBC
2
CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
Greek discussions are expected to weigh on the EUR
as the hard deadline for IMF repayments at the end
of the month approaches. And while a compromise
could provide a short-term boost to the currency, we
believe that longer term it will only have provided
better levels to sell into. With the ECB expected to
continue its QE program for the foreseeable future and
UST-Bund spreads—which have normalized recently—
likely having little room to tighten any further, look for
the EUR to ease to 1.05 versus the USD by September
2015 (Chart 3, right). However, 2016 should see the
single currency reverse some of those losses as the
positive effects of QE take hold and lead to consensustopping GDP growth of 2.2%.
it would be monitoring the “net effect” of the stronger
Canadian dollar and higher oil prices. Since then the
loonie has averaged 1.24 versus the greenback.
With the Fed expected to increase rates in September
and the Bank of Canada in favour of a softer loonie,
the path of least resistance seems to be one of more
CAD weakness. Look for USDCAD to drift to 1.27
around the time of the Fed rate hike in September,
before CAD claws back some ground as Yellen & Co.
take a pause in mid-2016.
Euro Softness Projected Regardless of Greek
Outcome
A Not So Sterling Month
There’s a game of tug-o-war currently being played
between economic recovery and political uncertainty—
and the euro is stuck in the middle of it.
There have been encouraging signs on the economic
front. Inflation readings have looked a little firmer and
have alleviated fears of Eurozone-wide deflation, while
growth appears to be continuing at a moderate pace
(even if it has been supported by a markedly weaker
exchange rate and lower gasoline prices).
It hasn’t been a sterling month for those following the
GBP. Fluctuations in cable have generally followed the
highs and lows of the USD more broadly, as investors
assess (and reassess) expectations for Fed tightening.
Against the euro, sterling has been trading in a
relatively sideways range—holding onto its previous
gains but failing to gather any further upward
momentum.
But uncertainty regarding Greek debt negotiations
remain. The market’s previous complacency that
policymakers will somehow muddle through has been
replaced by increasing concern that an exit may be on
the horizon. As a result, a positive relationship between
Greek bond prices and EURUSD has re-emerged
(Chart 3, left), which is pulling the euro lower as
economic surprises try to push it higher.
That’s partly because signs of economic improvement
in the UK haven’t been quite as stark as other
countries. True, industrial production growth exceeded
expectations and even the stubbornly wide trade
deficit narrowed more than expected in the latest
month. But the important PMI indexes have pointed
to cooling trends in both the manufacturing and key
services sectors.
If sterling is to emerge from the shadows of other
currencies, we’ll need to see expectations for BoE
tightening being brought forward again. And
that could well happen with markets perhaps too
complacent regarding the possibility of a move in early
2016. Recent comments from one MPC hawk Ian
McCafferty suggest he’s itching to cast a dissenting
vote in favour of an immediate hike again. So while
sterling may lose ground against the USD if the Fed
hikes in September, a building of rate-hike expectations
in the UK as well should see it gain at least modestly
against the euro.
Chart 3 - Correlations with Data & Greek Bond Prices Have
Driven the EUR Recently (L), Spreads Expected to Widen (R)
0.3
0.2
60-Day
Correlation
with EURUSD
2.0
1.00
1.9
1.8
1.05
1.7
0.1
1.6
1.5
0.0
1.4
Forecast
1.10
1.15
1.3
-0.1
Current
YTD
Avg.
2014
Avg.
Economic Surprise Index
Greek 10 Year Bond Prices
Source: Bloomberg, CIBC
1.2
2015
1.20
2016
US-German 10-Year
Spread, LHS (%)
EURUSD (Reverse)
3
CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
Chart 4 - UK Referendum Polls Showing Uncertainty
50
Chart 5 - Japanese Core Inflation is Again Nearing Zero
2.5
UK Referendum Poll (%): Should the UK remain
a member of the EU?
45
Japanese Core Inflation,
year/year (%)
2.0
Target
40
1.5
35
30
1.0
25
20
0.5
15
Avg. Inflation 12 Months Prior to Tax Hike
10
0.0
5
0
Yes
No
-0.5
Jun-13
Unsure
Dec-13
Jun-14
Dec-14
Source: Bloomberg, CIBC
Source: YouGov, CIBC
Despite the upward revision of Q1 GDP, the output gap
remains large. That, coupled with weak inflation, will
keep pressure on the central bank to at least continue
purchasing assets, if not increase the pace of easing.
Furthermore, we still see broad USD strength around
the time of the first Fed hike in September. All told,
look for USDJPY to rise to 126 in Q3.
Nevertheless, later in 2016, GBP could give up those
gains. Fears of a UK exit from the EU, even though
a referendum on the matter is a long way away, has
already led ratings agency S&P to place the UK on
negative watch. With any exit from the EU seen as
threatening growth prospects for the key financial
sector as well as exporters and possibly result in a
downgrade of the UK’s sovereign rating, sterling could
struggle as we get closer to that vote (Chart 4).
Despite Strong Labour Numbers, RBA Might Ease
Again
A Verbal Intervention for the Yen
Earlier this month, the RBA cut its growth forecast
while raising projections for the unemployment rate as
business spending continues to disappoint and demand
from China wanes.
Last week, Governor Kuroda suggested that he
believed the yen was fairly valued at current levels,
and that further depreciation was unlikely. While this
might limit short-term downside in the currency, it’s
not clear that the government is as convinced that the
yen’s slide is over. Given that Economics Minister Amari
tried to downplay the Governor’s comments, it seems
that the Abe administration remains happy fostering a
cheap JPY in an attempt to boost trade and inflation.
Moreover, Governor Kuroda has tried to walk back his
comments as the BoJ is not officially responsible for the
currency and he is not meant to comment directly on
value of the yen.
Nevertheless, May employment data showed
unexpectedly robust job gains and the unemployment
rate dropped to 6.0%, which is the lowest in a year
(Chart 6, left). However, we remain cautious about
extrapolating much in terms of aggregate demand as
employment data in Australia is notoriously volatile
(Chart 6, right).
As a result, we remain of the view that the recent
employment gains were a blip and the situation is likely
to deteriorate from here. That may cause the RBA to
cut rates again in the not-so-distant future even though
they’re already at record lows. The minutes from the
most recent RBA meeting suggest that the central bank
believes the currency needs to move lower and stay
there for a sustained period to provide a significant
With regards to the economy, as the consumption
tax hike has dropped out of the year-over-year CPI
calculation, it’s exposed the fact that there’s been little
change in underlying Japanese inflation over the past
year (Chart 5). Although core CPI is higher since QE
began, inflation is still far from the BoJ’s target of 2%.
4
CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
Chart 6 - Employment Surprised in May (L),
But the Release is Even More Volatile than in Canada (R)
50
40
Change in Full-Time
Employment (000's)
30
25
30
20
Chart 7 - USDBRL Spot, the SELIC Policy Rate, and Inflation
Standard Deviation of
Monthly Employment
Changes
16%
3.50
14%
3.00
12%
Forecast
10%
20
2.00
8%
10
15
0
-10
-20
4%
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
0
1.00
Target
0.50
2%
5
-30
1.50
6%
10
2.50
0%
0.00
Aug-10 Nov-11 Jan-13 Mar-14 Jun-15 Aug-16 Oct-17
Australia
IPCA inflation (YoY, L)
Inflation target
Canada
Source: Australian Bureau of Statistics, CIBC
SELIC rate (L)
USD/BRL (R)
Source: Banco Central do Brasil, IBGE , CIBC
boost to the economy. Look for the possibility of further
RBA easing to weigh on the AUD in the coming months
and take AUDUSD to 0.73 around the time the Fed
starts raising rates in September.
turned constructive; in fact, they have deteriorated
recently. However, once the relative price shock is over,
tightening monetary and fiscal policies should lead to
better price dynamics in a few months.
According to the IBGE, Q1 2015 real GDP fell by 0.2%
quarter/quarter (-1.6% year/year), better than the
consensus forecast of -0.5% quarter/quarter (or -1.8%
year/year). The “positive” surprise has allowed us to
only modestly lower our 2015 GDP growth forecast to
-1.4% from the prior -0.9%.
Brazilian Prices Continue to Move Higher
The real has been a solid performer versus the US
dollar since June 3rd when the Banco Central decided
to increase the SELIC rate by 50 bps to 13.75%. In
addition, Petrobrás returned to the bond market and
issued a 100-year bond which also contributed to the
strength.
We expect the real to gain some strength from higher
rates in the near term, but for it to lose ground longer
term as the economy continues to falter.
Interestingly, the statement accompanying Banco
Central do Brasil’s interest rate hike did not change
from the previous one, which could be seen as a
signal that another 50-bp increase is in the cards.
Consequently, we have revised our forecast to include
a hike of 50 bps in July to bring the SELIC to 14.25%.
Mexico to Wait Until After the Fed to Raise Rates
After weakening during the second half of May and
early June, USDMXN hit a multi-year high. However,
since then the peso has steadily appreciated with May
inflation data showing that prices had dipped below
Banxico’s 3% target.
May inflation data came in at 0.7% (8.5% year/year),
above the consensus of 0.6% (Chart 7). It now seems
like inflation has not peaked and corrective inflation will
continue. Driven by a new surge in administrative prices
combined with food and beverage price increases,
inflation is now almost 200 bps above the 6.5% ceiling
of the target band.
May inflation came in lower than expected, showing
a 0.5% fall in prices (+2.9% year/year), in line with
consensus forecasts (Chart 8). Electricity led the
declines in prices as they were down 23.3%, indirectly
because of lower petroleum costs. Core inflation also
came in around expectations at 0.1% on lower service
inflation. Given that the deflation pressure could easily
be reversed in the next 12 months (as the market
We expect inflation to stay above 8.0% for most
of 2015 and threaten 9% before starting to slowly
fall in late 2015. Inflation dynamics have not yet
5
CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
CNY & CNH Stability Continues
Chart 8 - USDMXN, Fondeo Rate, Headline and Core
6
5
4
Forecast
16
Chinese economic data continues to suggest that
the economy is losing momentum, however the pace
appears to be decelerating. May trade data was weak
as exports fell (on still weak global demand), but the
17.6% year/year fall in imports was more concerning.
Although some of the fall can be attributed to lower
commodity prices, demand still seems inconsistent with
growth anywhere near 7%. Nevertheless, CNY & CNH
have remained stable versus the USD and are actually
gaining on many trade-weighted measures. We still
favour stability in the time before the upcoming IMF
SDR decision in October. Stimulus—fiscal and monetary
—remain rational responses to slower growth and soft
inflation. And, as a result, we expect further easing
this year, especially via monetary policy. As broad USD
strength may reappear, look for stability in USDCNY
and USDCNH to dominate as we approach the IMF
SDR decision.
14
12
3
2
1
10
8
0
6
Aug-10 Nov-11 Jan-13 Mar-14 Jun-15 Aug-16 Oct-17
CPI inflation (y/y %, Left)
Core inflation (y/y %, Left)
Fondeo rate (Left)
USD/MXN (Right)
Source: Banxico, Bloomberg, CIBC
expects), we do not expect these numbers to materially
affect Banxico’s policy decisions.
Banxico decided to keep the overnight rate at 3.0%
at its June 4th meeting. The policy announcement
was similar to the most recent inflation report. With
inflation almost at the central bank’s 3.0% target,
Banxico does not anticipate any inflationary pressures
from aggregate demand and projects inflation to
remain slightly below 3% for the remainder of 2015.
Despite Challenges, KRW Still Firm on Portfolio
Flows
The BoK cut its policy rate on June 11th, taking the
7-day repo rate to a record low 1.50%. The easing
was in response to a number of economic challenges,
especially weak external demand (in particular China) as
May exports contracted 10.9% year/year. An outbreak
of MERS in the country is also concerning policymakers.
President Park has called on the government to
respond to both export and MERS concerns. Through
the challenges, KRW has been somewhat shielded by
continued strong portfolio inflows (Chart 9). Overall,
the economy is doing okay, but not spectacularly, with
Q1 GDP at 2.5% year/year, while the latest monetary
easing should provide some measure of support for the
economy. As USD gains may broaden in the coming
months, stable portfolio inflows should see the KRW
only gain on a trade-weighted basis but lose ground
against the greenback. Nevertheless, look for ongoing
strength in KRW versus the JPY.
The balance of inflation risk remained unchanged from
the previous rate announcement and continues to be
tilted to the downside and, although Banxico revised
down its 2015 GDP forecast, policy still remains very
dependent on the Fed. The minutes point to Banxico
reacting after the Fed since “moving before would
incur more costs than benefits.” Hence, we expect
the central bank to raise the overnight rate late in
2015 Q3, in tandem with any US Fed rate action, and
to end 2015 at 3.5%. That should allow the peso to
moderately strengthen versus the USD.
Of note, June interim congressional elections brought
few changes in Lower House representation. A
government coalition of PRI, PVEM and Nueva Alianza
will have 42.3% of the votes corresponding to between
246 and 263 representatives in a Lower House of 500.
To know if the ruling coalition will have an absolute
majority, the final computation of the 300-majority
district and the assignment of 200 representative
deputies is needed. The calculation began this week,
but in all likelihood the ruling coalition has at least 251
representatives.
6
CIBC World Markets Inc.
Monthly FX Outlook - June 18, 2015
Chart 9 - South Korean Portfolio Inflows Remains Strong
60000
50000
$mln
$mln
$mln
$mln
ytd
ytd
ytd
ytd
Chart 10 - Widening of Asian CDS Pressuring IDR and MYR
200
2012
2013
2014
2015
180
160
40000
140
30000
120
100
20000
80
60
10000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Indonesia 5yr CDS
-10000
Malaysia 5yr CDS
Source: Bloomberg, CIBC
Source: Bloomberg, CIBC
INR Pressured on Higher Global Yields
sentiment. As a result, Malaysian 5-year CDS are
now at their highest level since January (Chart 10),
while foreign ownership hedging and the unwinding
of Malaysian bond positions has contributed to the
MYR underperformance. Looking ahead, these factors
remain key watch points. However, a recovery in
commodity prices and global demand would see MYR
regaining some lost ground.
USDINR is threatening to breakout above its recent
trading range of 61.30–64.30 that has held since early
January. Portfolio inflows that began the year in positive
territory have recently tapered off and the withdrawal
and/or hedging of those flows has put pressure on the
INR. In addition, the RBI cut rates for the third time in
early June. We see risks of EURINR depreciating further
in the coming weeks as global bond yields remain
firm. With the RBI having room to ease further and a
renewal of threats from the external environment, INR
is also vulnerable to losses on weakened sentiment and
portfolio outflow over the coming months. Uncertainty
around the external environment (yields and demand)
and how it might be impacted by the Fed’s rate hikes
leaves INR on the defensive, but potentially offering
value in the high 60s range versus the USD.
IDR Weighed Down by Uncertainty
The rupiah has been Asia’s weakest currency year-todate. It has given up 7.4% versus the USD and moved
to levels not seen since 1998. Disappointing economic
data and the fact that economic reform has not
proceeded as hoped following the presidential election
have weighed on sentiment. While higher global bond
yields and the withdrawal of portfolio flows are driving
the depreciation in the IDR. That weakness may have
restrained the Bank of Indonesia at its meeting this
week from delivering monetary easing to help the
economy since it would likely have worsened the
currency’s slide.
MYR Correction Not Sustained
The MYR saw a brief period of recovery against
the USD and regional peers, however it is once
again depreciating as a result of negative domestic
sentiment, higher global bond yields and equity
caution—all of which have also been reflected in
weaker portfolio inflows. Our previous expectation
that this underperformance against the USD and
regional peers would correct has not come to fruition.
April trade data was weak and IP for the same month
was soft in tandem. Despite that, fundamentals of
the Malaysian economy (GDP growth of 6.0% in
2014 and 5.0-5.5% expected for 2015) look solid
enough, but have been overshadowed by domestic
political and policy uncertainty and negative investor
The government is dragging its feet on reforms and
needs to deliver stimulus this year and not next year
as the finance minister recently suggested. There is
ample room in the budget with the fiscal deficit target
less than 2%. The BI also needs to work with the
government and provide monetary easing.
Unless the rise in global bond yields is arrested,
Indonesia could witness further pressures akin to
those during the ‘taper tantrum’. Credit default swaps
are already at year-to-date highs.
7
CIBC World Markets Inc.
Interest Rate
and
Monthly FX Outlook - June 18, 2015
Economic Outlook
End of period:
2015 III 2015 IV 2016 I 2016 II 2016 III
0.75
0.75
0.75
1.00
Canada Overnight target rate 0.75
2-Year Gov't Bond
0.70
0.90
1.20
1.35
1.50
10-Year Gov't Bond
1.90
2.10
2.00
2.15
2.55
Federal Funds Rate
0.38
0.63
0.88
0.88
0.88
US
2-Year Gov't Note
1.00
1.05
1.30
1.40
1.50
10-Year Gov't Note
2.60
2.85
2.70
2.75
2.95
0.05
0.05
0.05
0.05
0.05
Eurozone Refin.operations rate
2-Year Gov't Bunds
-0.15 -0.10
0.00
0.05
0.05
10-Year Gov't Bunds
0.50
0.55
0.60
0.70
0.70
Bank rate
0.50
0.50
0.75
1.00
1.25
UK
2-Year Gilts
0.65
0.85
1.10
1.35
1.70
10-Year Gilts
2.10
2.20
2.35
2.45
2.60
Overnight rate
0.10
0.10
0.10
0.10
0.10
Japan
2-Year Gov't Bond
0.05
0.10
0.10
0.10
0.10
10-Year Gov't Bond
0.40
0.45
0.50
0.50
0.55
Canada
US
Eurozone
UK
Japan
Real GDP growth (%)
Unemployment rate (%)
CPI (%)
Real GDP growth (%)
Unemployment rate (%)
CPI (%)
Real GDP growth (%)
Unemployment rate (%)
CPI (%)
Real GDP growth (%)
Unemployment rate (%)
CPI (%)
Real GDP growth (%)
Unemployment rate (%)
CPI (%)
2014
2.4
6.9
1.9
2.4
6.2
1.6
0.9
11.6
0.4
2.8
6.3
1.5
-0.1
3.6
2.7
2015
1.4
6.8
0.9
2.4
5.3
0.6
1.7
11.1
0.0
2.0
5.4
0.5
1.0
3.5
0.9
2016
2.7
6.6
2.2
2.5
5.0
2.7
2.2
10.5
1.6
2.4
5.1
1.9
1.2
3.4
1.3
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