[ForexNews]

Recent Q1 data suggest the recession is even deeper than we thought, particularly in Europe.

Weak US retail sales data for April are a reminder that any upturn in growth is likely to be slow.

However, the inventory cycle, easy monetary and fiscal policy, and an easing of the capital markets crisis all argue for a second half recovery.

When it comes, the recovery will be slow as consumers and financial firms lick their wounds.

Developed Economies

United States: Accounting change disguises worsening deficit

Euro Area: Extreme weakness

Real GDP fell 2.5% q/q in Q1, pointing to a 4% decline this year.

UK: QE for the long haul

The Inflation Report suggests that the MPC does not envisage hiking rates for a long time.

Japan: Household drag
Private consumption is set to fall sharply in January-March.

Emerging Markets

Emerging Asia: When will Asian central banks shift their focus to inflation from growth?

We do not expect their attention to turn for at least another one to two quarters.

EMEA: Baltic tigers de-clawed

Catastrophically bad GDP numbers in the Baltic States raise questions on the currency pegs and political-social tolerance of the adjustment needed.

Latin America: The rating agency comeback

The change in Mexico 's credit rating outlook by S&P puts LatAm in the spotlight.