Global Weekly Economic Monitor   Time to do nothing With headline inflation high but growth weakening,
major central banks will likely stay on hold for now.  

GLOBAL WEEKLY ECONOMIC MONITOR, 1 AUGUST 2008

GLOBAL LETTER

Of bubbles and speculation

Expectations can play a large part in determining prices in a market such as for oil.

UNITED STATES

The song remains the same

We expect the FOMC to keep holding the funds rate at 2% at next week's meeting.

EUROPE

Time to do nothing

The ECB and the BoE ought to do nothing next week ? which is what we expect.

JAPAN

A gradual downward slope

The economy looks to be in a downturn, but its trajectory is still very gradual.

ASIA EX-JAPAN

China: Widespread weakening

The weakening economy and falling asset prices are reinforcing each other.

EMERGING MARKETS

Global inflation and EM

Inflation picking up relative to the developed world is not so bad for EM credit.

COMMODITIES

A comedy of errors

Short-run inelasticity, market opacity and ?noise? trading can distort energy prices.