Subject: Global Economic Outlook and Strategy: June 2011
From: "Michael Andrews" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>
Date: Wed, 22 Jun 2011 14:46:06 -0400

I am sending the Citi Global Economic OUtlook and Strategy as a matter  
of information and possible interest.
>
>  	
>
> Global Economic Outlook and Strategy: June 2011
>
> Recent economic data for advanced economies generally have remained  
> soft, and this month we are downgrading our growth forecasts for  
> 2011-12 combined in the US, euro area, UK, Switzerland, Sweden,  
> Australia, Denmark and Canada. Even so, markets may be extrapolating  
> the recent soft patch too far and we expect stronger growth in the  
> US and Japan in Q3 this year. Moreover, despite the modest outlook  
> for advanced economies, we stress that the strong EM growth should  
> keep global growth buoyant, at 3%-4% this year and 2012 — and even  
> higher thereafter — well above the longrun norm of just below 3% YoY  
> (PPP-weighted, we expect growth of 4%-5% YoY). We still expect the  
> ECB to hike at the upcoming July meeting, but have postponed the  
> expected start of Fed hiking to Q3-2012 (Q1-2012 previously) and  
> scaled back our forecasts for tightening by the ECB and UK MPC.
>
>
> For Greece, we expect extra liquidity assistance and some form of  
> semi-coercive rollover to ensure there is no near-term “hard  
> restructuring” (ie haircuts to principal or coupon). Nevertheless,  
> we believe the chance of eventual debt restructuring (with haircuts)  
> is high in Greece, Portugal and Ireland. Spain’s medium-term  
> economic and fiscal prospects are weaker than markets currently  
> price in.
>
>
> Global Economics Essay (see page 14): World trade will both expand  
> markedly and be transformed by 2050. World trade is set to rise from  
> $37trn in 2010 to about $150trn in 2030 (in constant USD) and to  
> about $370trn by 2050. Intra-emerging markets (EM) trade is set to  
> overtake trade within advanced economies (AEs) by 2015 and AE-EM  
> trade by 2030.
>
>
> Against this backdrop, Citi strategists stress near-term  
> uncertainties to a range of risk assets, especially commodities.  
> However, Citi equity strategists expect higher earnings to lift  
> global equities by about 15% by year end, while Citi rate  
> strategists believe government bond yields in the US, core EMU and  
> Japan willall rise in H2.
>
>
> Click here for the document
> Analyst(s)	Willem Buiter (+44-20-7986-5944) , Michael Saunders  
> (+44-20-7986-3299) , Kiichi Murashima (+81-3-6270-4981) , Robert  
> DiClemente (+1-212-816-7942) , David Lubin (+44-20-7986-3302) ,  
> Johanna Chua (+852-2501-2357) , Joaquin Cottani (+1-212-816-2735)
> Sector	Economics
> Region	Global
> Australia/New Zealand
> CEEMEA
> Europe
> Japan
> Latin America
> North America
> Europe
> Asia Pacific
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