Top Economic Reports
July 03, 2013

By Global Economic Team|

CEEMEA Economics: Macro Monitor (Exposure to Overflow Effects): This week, we take a closer look at some of the smaller CEEMEA economies - Ukraine, Georgia and Belarus -which may be particularly at risk of suffering from what Chairman Bernanke referred to as an "overflow effect" from the Fed's exit strategy in his comments after this week's FOMC meeting. They all have wide or deteriorating current account deficits and face a need for external financing, which means there is a risk that a sharp slowdown in financial inflows could trigger a loss of reserves or a sharp move in the exchange rate. CEEMEA Economics Team

Asia/Pacific Economics: Understanding AXJ's Exposure to Rising Dollar and Real Rates: Understanding AXJ's exposure to rising dollar and real rates: We discussed the implications of a rise in real rates for the AXJ region in our note Asia Pacific Economics: Rise in Real Rates - What Does It Mean for AXJ?, dated May 29, 2013. In this follow-up note, we provide a further look into the exposure of each economy to the trends of a rising US dollar and real rates, analyzing the impact on the region via the balance of payments position, external debt exposure and leverage cycle. Chetan Ahya

US Economics: Business Conditions: Vigor in Headline Consistent with Higher 2H Growth: The Morgan Stanley Business Conditions Index surged 28 points to 71% in June, high since January 2011. That matched the largest one-month gain in the index's history, previously seen when the economy was first coming out of recession in August 2009. Vincent Reinhart

China Economics: Reading the Policy Tea Leaves (6-13): Liquidity to Remain Tight in the Short Term, but There Is a "Plan B". No helping hand from the last resort of borrowing: Liquidity shortages often occur in the interbank market before holidays and toward the ends of quarters. What is unusual about the recent episode is that the PBOC didn't come in to help, despite the visible slowdown in liquidity inflow. Helen Qiao