For more information, visit http://www.worldbank.org/prospects June 23, 2017 Taking Stock U.S. composite PMI fell to 3-month low in June; weekly jobless claims edged up. The preliminary composite Purchasing Managers’ Index (PMI) for the United States came in at a 3-month low of 53.0 in June, lower than expected and the previous months’ reading of 53.6 (a reading above 50 signals expansion). Business activity in both services and manufacturing sectors slowed, as output and new business growth eased, offsetting stronger contributions from job creation and inventory. Separately, U.S. initial jobless claims for the week ending June 17th rose by 3,000 to 241,000, close to expectations. The less-volatile 4-week moving average of claims rose 1,500 to 244,750, the highest since early April. Euro Area composite PMI eased from a 6-year high in June; consumer confidence rose. The first reading of the composite purchasing managers’ index (PMI) came in at 55.7 in June, down from a 6-year high of 56.8 in April and May (Figure 1). The services PMI slowed to 54.7 in June from 56.3 in May whereas the manufacturing PMI rose to 57.3 from 57.0. The average PMI for Q2 points to continued solid growth in the Euro Area (a reading above 50 signals expansion). The preliminary estimate of Euro Area consumer confidence for June came in at -1.3 from -3.3 in May and sentiment in the broader European Union (EU) rose by 1.1 points to -2.2. Japan posted an unexpected trade deficit in May. Japan’s exports rose 14.9 percent (y/y) in May, less than expected. Meanwhile, import growth unexpectedly rose to 16.8 percent (y/y), up from 15.1 percent in April, driven by import growth in fuels (41.5 percent, y/y) and raw materials (25.7percent, y/y). As a result, Japan’s trade balance turned to a deficit of ¥203.4 billion in May from a surplus of ¥481.1 billion in April. China’s house price growth decelerated further in May. The price of new housing-excluding government subsidized housing- rose in 56 out of 70 cities (m/m) in May, down from 58 cities in April, partly due to government measures to cool the housing market. While average new home price growth remained almost unchanged in first tier cities, it slowed sharply in some, such as Shenzhen. Average new home prices rose the most across smaller or third-tier cities. Crude oil prices continued to decline. U.S. crude oil output was 9.35 million barrels per day for the week ending June 17th, the highest level since August 2015. This raised concerns about rising U.S. shale oil production mitigating OPEC-led output cuts. West Texas Intermediate (WTI), the U.S. benchmark crude, hit a 10-month low of $42.04 per barrel on Wednesday and continues to trade around $43 per barrel (Figure 2). Brent crude, the global benchmark, fell to as low as $44.35 a barrel, the lowest since November. Figure 1 Euro Area composite PMI eased from a 6-year high. Figure 2 Crude oil prices continued to decline. Markit Euro Area composite PMI Brent and WTI crude oil prices Eurozone composite PMI index US$/bbl 57 60 Brent WTI 56 55 55 54 50 53 52 45 51 50 40 Jan-17 May-17 Jun-17 Nov-16 Dec-16 Oct-16 Apr-17 Feb-17 Mar-17 Jun-14 Jun-15 Jun-16 Jun-17 Dec-14 Dec-15 Dec-16 Source: Markit. Source: Bloomberg. Produced by DECPG. Number 352 | June 23, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: June 16, 2017 - June 22, 2017 Upcoming releases: June 23, 2017 - June 30, 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous Austria 6/16/2017 CPI MAY 1.9 % 2 % 2.1 % Poland 6/23/2017 Unemployment Rate MAY 7.7 % Croatia 6/16/2017 CPI MAY 1.1 % 1.4 % Mexico 6/23/2017 Unemployment Rate MAY 3.5 % Eurozone 6/16/2017 CPI MAY 1.4 % 1.4% 1.9 % Luxembourg 6/29/2017 Unemployment Rate MAY 6.0 % Hong Kong 6/20/2017 CPI MAY 2.0 % 2.0 % Malta 6/29/2017 Unemployment Rate Q1 2.3 % Poland 6/20/2017 IP MAY 9.1 % -0.6 % Italy 6/29/2017 CPI JUN 1.4 % Lithuania 6/21/2017 IP MAY 7.4 % 4.0 % Hungary 6/29/2017 Unemployment Rate MAR - MAY 4.6 % Activity and Inflation (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized) 2016 2016 2017 2015 2016 Q1 Q2 Q3 Q4 May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May 1 Industrial Production, sa World 1.9 2.2 1.7 2.4 2.8 5.3 1.9 2.1 1.8 2.4 2.0 2.2 3.3 3.7 3.1 3.5 4.0 3.9 - Advanced Economies 0.2 0.2 0.3 0.4 1.7 3.9 -0.2 -0.2 -0.4 0.6 0.3 0.2 1.9 2.5 1.1 2.2 2.3 2.6 - Emerging Market and Developing Economies 3.5 4.1 3.2 4.3 3.9 6.8 4.0 4.3 4.0 4.2 3.8 4.2 4.6 4.9 5.2 4.8 5.8 5.3 - Commodity-exporting EMDE 0.2 1.2 0.8 0.8 2.8 4.8 0.3 1.6 1.9 1.3 1.0 1.3 2.3 3.3 2.9 2.3 3.0 4.1 - Other EMDE 5.0 5.3 4.1 5.8 4.3 7.7 5.5 5.4 4.8 5.4 4.9 5.2 5.6 5.6 6.1 5.7 6.6 5.6 5.7 East Asia and Pacific 5.8 5.8 4.4 7.3 5.5 6.0 6.0 6.2 6.0 6.3 5.5 5.6 5.9 6.0 6.2 6.1 7.2 6.3 6.2 East Asia excl. China 3.5 4.5 2.1 8.2 3.9 3.1 5.9 6.8 6.8 5.9 2.2 2.5 4.3 6.1 4.8 4.8 5.0 4.7 - Europe and Central Asia 1.5 2.0 1.5 0.7 -2.1 9.8 2.2 2.0 0.2 1.8 0.6 1.5 2.8 2.7 4.4 1.5 4.4 4.3 6.7 Latin America and Caribbean -3.1 -2.9 -3.2 0.1 0.4 -0.9 -4.1 -2.4 -2.3 -2.9 -2.0 -2.8 -0.9 0.9 0.0 0.6 -0.9 -0.3 - Middle East and North Africa 2.8 - 2.8 -2.9 8.3 - 2.4 2.9 3.7 3.1 4.3 6.5 - - - - - - - South Asia 3.5 5.7 7.2 4.9 2.0 4.3 7.2 6.6 5.9 5.4 4.5 5.1 5.7 3.0 3.8 2.4 4.4 3.7 - Sub-Saharan Africa 0.1 0.8 1.5 6.6 -6.1 -3.5 4.0 4.2 1.4 0.1 0.0 -1.1 0.6 -0.9 0.0 -2.8 -2.1 -0.1 - Inflation, sa 2 World 1.4 1.3 1.4 1.6 1.3 1.6 1.7 1.6 1.5 1.3 1.4 1.5 1.6 1.8 2.3 2.4 2.4 2.3 2.1 Advanced Economies 0.1 0.4 0.3 0.2 0.4 0.8 0.1 0.4 0.4 0.4 0.5 0.6 0.7 1.1 1.5 1.8 1.6 1.9 1.6 Emerging Market and Developing Economies 2.5 2.3 2.7 2.9 2.8 2.5 2.8 2.6 2.8 2.7 2.9 2.4 2.4 2.5 2.9 3.4 3.5 3.5 3.2 Commodity-exporting EMDE 3.9 3.5 3.9 3.6 3.3 3.3 3.5 3.7 3.5 3.2 3.1 2.9 3.0 3.1 3.4 3.5 3.6 3.7 3.5 Other EMDE 1.0 1.1 1.0 1.8 1.6 1.7 1.7 1.5 1.8 1.5 1.4 1.5 1.6 1.8 2.6 3.2 3.5 3.1 3.2 East Asia and Pacific 1.3 1.4 1.1 1.6 1.9 2.0 1.6 1.8 1.9 1.6 2.1 1.6 1.8 2.1 2.7 3.2 3.5 3.3 3.2 Europe and Central Asia 1.9 0.4 0.7 0.3 0.5 1.0 0.3 0.4 1.2 0.5 0.5 0.9 0.9 1.5 2.4 2.5 2.7 2.6 2.2 Latin America and Caribbean 2.7 2.4 2.7 3.5 3.0 3.1 3.4 3.3 2.9 3.1 3.1 2.9 3.2 3.2 3.1 3.3 3.2 3.6 3.1 Middle East and North Africa 1.9 2.2 2.5 2.3 2.3 1.9 2.2 2.4 2.3 2.1 2.5 1.9 2.0 1.8 2.2 2.5 2.9 2.0 1.9 South Asia 4.5 4.9 3.8 5.3 5.3 3.9 5.2 5.7 5.7 5.2 5.0 4.2 3.7 3.7 3.7 4.2 5.0 3.9 3.6 Sub-Saharan Africa 3.7 5.3 5.2 5.2 5.7 5.9 4.8 5.6 5.5 5.9 5.9 5.7 6.2 6.5 6.7 6.7 6.8 6.7 6.5 1 Industrial production is total production (may exclude construction). When data are unavailable, "industral production, manufacturing" and "industrial production, manufacturing, non-durable manufacturing, petroleum and coal products, crude petrolem products" are used as proxies 2 Median inflation rate for each grouping. Trade and Finance (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period) 2016 2016 2017 2015 2016 Q1 Q2 Q3 Q4 May June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Exports, Nominal, US$, sa World -11.5 -3.0 -12.9 15.5 -0.8 7.9 -3.2 -4.1 -6.9 2.8 -0.8 -3.3 4.9 4.1 10.4 7.1 12.3 4.0 - Advanced Economies -11.3 -0.8 -5.4 16.6 -1.1 4.4 -0.5 -2.3 -5.5 5.4 1.4 -1.8 6.1 5.7 9.3 7.3 9.5 1.0 - Emerging Market and Developing Economies -12.0 -6.6 -24.3 13.6 -0.3 14.9 -7.5 -7.1 -9.1 -1.7 -4.4 -5.6 3.0 1.5 12.7 6.8 17.6 9.8 - Commodity-exporting EMDE -24.2 -9.3 -27.7 16.2 5.4 28.1 -12.7 -13.5 -15.1 -1.9 -1.7 -5.6 7.6 7.8 26.7 19.5 24.7 - - Other EMDE -3.8 -4.6 -21.6 12.6 -2.3 10.2 -4.4 -3.1 -5.6 -0.9 -4.9 -5.0 1.8 -0.5 7.8 2.4 15.1 7.9 - East Asia and Pacific -3.5 -6.1 -25.5 13.4 -2.4 11.1 -6.0 -5.4 -6.9 -1.6 -6.9 -6.0 1.7 -2.2 9.1 2.4 16.2 9.6 10.6 Europe and Central Asia -20.7 -6.1 -20.3 21.6 -2.1 20.8 -10.6 -4.2 -8.9 0.5 -1.1 -3.6 6.5 7.7 22.2 12.6 21.2 6.8 - Latin America and Caribbean -11.9 -2.4 -7.2 9.3 6.6 14.3 -1.9 -8.0 -7.6 2.6 2.9 -4.4 10.2 10.9 14.7 12.4 16.9 8.9 - Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - - South Asia -4.8 1.6 7.3 4.1 -18.3 31.5 -0.1 5.1 -4.0 5.8 -3.2 10.6 3.3 0.2 2.9 -0.1 7.6 5.2 - Sub-Saharan Africa -26.8 -14.8 -40.0 21.4 -2.8 29.0 -17.9 -18.6 -22.3 -12.7 -2.7 -9.8 0.5 2.9 23.0 26.2 - - - Imports, Nominal, US$, sa World -6.8 -5.2 -24.5 19.6 -17.8 21.0 -4.1 -4.4 -10.9 -6.8 -5.6 -9.6 3.6 -1.7 11.5 5.4 10.3 -5.9 - Advanced Economies -12.5 -3.4 -10.0 10.0 -3.0 2.1 -2.0 -4.6 -8.2 1.7 -1.9 -5.0 2.4 1.2 9.4 3.1 8.6 2.7 - Emerging Market and Developing Economies -3.3 -6.3 -31.6 25.7 -25.5 34.0 -5.4 -4.2 -12.4 -11.6 -7.8 -12.1 4.4 -3.2 12.8 6.8 11.3 -10.4 - Commodity-exporting EMDE -0.9 -7.1 -34.1 28.0 -31.8 38.5 -6.7 -3.9 -12.7 -15.5 -9.8 -14.9 4.2 -5.2 12.0 2.3 8.9 - - Other EMDE -11.5 -3.3 -21.2 17.7 1.2 19.8 -0.4 -5.7 -11.3 3.5 -0.2 -0.3 5.3 3.8 15.3 23.2 19.8 11.0 - East Asia and Pacific -13.1 -3.6 -24.9 21.4 4.0 21.8 0.9 -6.6 -10.8 5.7 0.0 -0.7 6.0 5.6 17.1 33.5 20.7 12.6 17.8 Europe and Central Asia -20.7 -1.3 1.4 13.3 -3.8 7.1 -0.8 0.3 -9.7 8.8 1.5 0.8 5.8 6.4 21.6 8.2 14.1 7.2 - Latin America and Caribbean -9.8 -7.4 -17.1 7.7 2.0 5.6 -6.1 -8.8 -15.5 1.5 -3.3 -8.4 1.7 3.9 11.3 5.3 13.8 -1.7 - Middle East and North Africa 1.5 - - - - - - - - - - - - - - - - - - South Asia -13.2 -5.3 -25.5 3.3 10.4 59.7 -8.6 -6.4 -14.9 -9.4 0.4 9.5 12.0 2.8 14.8 21.5 40.5 41.3 - Sub-Saharan Africa -7.6 - - - - - - - - - - - - - - - - - - International Reserves, US$ 1 World -5.9 -1.1 0.7 0.8 0.4 -3.3 -0.7 0.8 0.3 -0.1 0.2 -1.1 -1.7 -0.6 0.7 0.3 0.7 0.6 - Advanced Economies 0.6 4.4 3.7 1.7 1.4 -2.5 -0.6 1.4 0.5 0.1 0.9 -0.7 -1.5 -0.2 1.5 0.4 1.5 0.9 - Emerging Market and Developing Economies -9.9 -4.8 -1.2 0.2 -0.2 -3.9 -0.8 0.5 0.2 -0.2 -0.2 -1.4 -1.8 -0.9 0.1 0.2 0.1 0.5 - Commodity-exporting EMDE -11.1 - -1.0 -0.7 -0.2 - -0.9 0.0 0.4 -0.5 -0.1 -1.7 -1.1 - - - - - - Other EMDE -9.1 -5.7 -1.2 0.7 -0.3 -4.5 -0.8 0.7 0.1 -0.1 -0.2 -1.2 -2.1 -1.2 0.0 0.2 0.3 0.6 0.8 East Asia and Pacific -11.3 -7.3 -1.8 0.3 -0.7 -4.9 -1.0 0.9 0.0 -0.3 -0.4 -1.3 -2.4 -1.2 -0.1 0.4 0.1 0.8 0.8 Europe and Central Asia -6.3 4.4 4.1 2.7 1.2 -3.8 -0.2 1.4 0.5 0.5 0.3 -0.8 -1.7 -1.4 2.1 0.4 0.2 0.0 1.2 Latin America and Caribbean -5.3 1.1 0.1 0.7 1.6 -0.9 -0.2 0.1 1.6 0.0 -0.1 -0.6 -0.6 0.1 0.5 0.4 0.0 1.0 0.1 Middle East and North Africa -17.1 - -3.6 -2.6 -2.0 - -0.8 -1.3 -0.7 -0.8 -0.5 -2.6 - - - - - - - South Asia 11.6 3.5 1.0 2.0 3.3 -2.8 -0.8 0.8 1.4 0.6 1.4 -1.0 -0.9 -0.9 -0.1 0.5 1.3 0.6 1.4 Sub-Saharan Africa -12.0 - -2.0 -1.9 - - -1.7 - - - - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 352 | June 23, 2017 Financial Markets 2016 2017 2016 2017 MRV 1 2015 2016 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.37 0.39 0.45 0.70 0.38 0.39 0.40 0.40 0.41 0.41 0.55 0.66 0.66 0.79 0.91 0.90 1.16 ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ LIBOR 3-months 0.32 0.74 0.64 0.79 0.92 1.07 0.65 0.70 0.81 0.85 0.88 0.91 0.98 1.03 1.04 1.13 1.16 1.19 1.29 EURIBOR 3-months -0.02 -0.26 -0.26 -0.30 -0.31 -0.33 -0.27 -0.29 -0.30 -0.30 -0.31 -0.31 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 US 10-yr Treasury yield 2.12 1.84 1.75 1.56 2.12 2.44 1.64 1.48 1.56 1.63 1.74 2.12 2.50 2.44 2.42 2.47 2.29 2.29 2.16 German Bund, 10 yr 0.54 0.14 0.12 -0.07 0.18 0.35 0.01 -0.09 -0.07 -0.05 0.03 0.22 0.30 0.34 0.32 0.39 0.25 0.36 0.27 Spreads (basis points) JP Morgan Emerging Markets 415 410 419 372 369 340 418 387 367 361 357 380 370 354 338 329 331 320 322 Asia 224 221 227 197 197 175 233 210 190 191 192 201 198 185 173 166 173 167 167 Europe 348 302 305 282 283 261 303 290 282 273 274 294 282 272 258 253 250 237 237 Latin America & Caribbean 540 537 551 477 475 445 541 496 473 463 453 491 481 463 442 431 431 420 425 Middle East 456 517 538 508 467 396 545 540 492 493 487 475 438 416 396 377 350 353 380 Africa 415 518 548 461 436 389 546 494 448 440 441 444 422 401 387 380 400 376 379 Stock Indices (end of period) Global (MSCI) 399 424 399 418 424 449 399 414 417 418 413 413 424 433 445 449 455 464 466 Advanced Economies ($ Index) 1663 1761 1653 1726 1761 1854 1653 1713 1720 1726 1697 1712 1761 1792 1839 1854 1878 1912 1922 United States (S&P 500) 2044 2258 2099 2168 2258 2363 2099 2170 2171 2168 2139 2199 2258 2279 2364 2363 2384 2421 2435 Europe (S&P Euro 350) 1474 1475 1339 1388 1475 1547 1339 1376 1390 1388 1377 1388 1475 1463 1501 1547 1564 1576 1571 Japan (Nikkei 225) 18817 19302 15576 16450 19302 18909 15576 16556 16887 16450 17050 18604 19302 19035 19342 18909 19197 19836 20098 Emerging Market and Developing Economies (MSCI) 794 861 834 903 861 958 834 879 894 903 908 863 861 909 936 958 978 1005 1009 EM Asia 404 419 407 448 419 474 407 431 442 448 444 426 419 443 459 474 484 505 513 EM Europe 244 295 265 273 295 301 265 264 269 273 274 273 295 302 296 301 313 308 298 EM Europe & Middle East 211 248 225 233 248 252 225 227 232 233 232 230 248 253 249 252 259 255 247 EM Latin America & Caribbean 1830 2341 2269 2381 2341 2611 2269 2359 2402 2381 2608 2330 2341 2516 2600 2611 2601 2532 2485 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.89 0.90 0.93 0.94 0.89 0.90 0.89 0.89 0.91 0.93 0.95 0.94 0.94 0.94 0.93 0.91 0.90 Japan 121.00 108.80 107.96 102.36 109.63 113.63 105.34 104.09 101.31 101.69 103.72 108.90 116.28 115.03 112.96 112.91 110.02 112.36 111.25 Emerging and Developing Economies Brazil 3.33 3.49 3.51 3.25 3.28 3.14 3.42 3.28 3.21 3.25 3.18 3.33 3.35 3.20 3.10 3.13 3.14 3.20 3.34 China 6.29 6.65 6.53 6.67 6.84 6.89 6.59 6.68 6.65 6.67 6.74 6.85 6.92 6.89 6.87 6.90 6.89 6.88 6.83 Egypt 7.70 10.12 8.87 8.87 14.71 17.82 8.87 8.87 8.87 8.88 9.25 16.34 18.56 18.68 17.01 17.76 18.09 18.10 18.17 India 64.14 67.19 66.91 66.94 67.39 66.97 67.29 67.18 66.91 66.74 66.73 67.60 67.86 68.06 67.01 65.83 64.52 64.46 64.52 Russia 61.34 67.06 65.84 64.61 62.95 58.67 65.01 64.43 64.93 64.48 62.57 64.25 62.03 59.76 58.42 57.83 56.53 56.88 60.12 South Africa 12.77 14.71 15.01 14.07 13.92 13.24 15.05 14.40 13.79 14.01 13.92 13.96 13.88 13.60 13.17 12.95 13.46 13.25 13.07 Memo: U.S. nominal effective rate (index) 114.7 119.7 117.5 118.4 122.5 123.4 118.2 118.9 117.8 118.6 119.7 122.9 124.9 124.8 123.0 122.5 121.6 121.0 120.0 1 MRV = Most Recent Value. Commodity Prices 1 2016 2017 2016 2017 MRV 2015 2016 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Energy 2 65 55 56 57 64 68 59 57 58 58 64 59 68 69 69 65 67 64 64 Non-energy 2 82 80 81 82 83 86 83 82 82 81 81 83 84 85 87 85 83 83 83 2 Agriculture 89 89 91 91 90 91 94 92 91 90 90 90 89 91 91 89 88 89 89 2 Metals and minerals 68 64 62 64 71 78 61 64 65 64 65 73 75 76 79 79 75 73 72 Memo items: Crude oil, average ($/bbl) 51 43 45 45 49 53 48 44 45 45 49 45 53 54 54 51 52 50 44 Gold ($/toz) 1161 1249 1260 1334 1221 1219 1276 1337 1340 1327 1267 1238 1157 1192 1234 1231 1267 … 1246 Baltic Dry Index 711 676 613 736 994 938 608 707 675 826 870 1080 1031 913 760 1142 1229 979 847 Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg 1 MRV = Most Recent Value. 2 Indexes, 2010 = 100. Produced by DECPG. Number 352 | June 23, 2017