[LFX]

Recent industrial production data highlight the stellar performance of Asia, consolidating its role as the world's preferred "factory". By contrast, Europe continues to exhibit only a modest, sub-par recovery, partly reflecting its weak competitiveness. Government borrowing continues at an unprecedented pace and complicates central bank exit strategy.

US: Tight credit conditions only a moderate business headwind - analysts do not expect tight credit conditions to prevent a rebound in business investment spending and hiring.

Euro area: Recovery, but divergent trends - The euro area has embarked upon recovery; a double dip seems unlikely.

UK: Fiscal policy matters, but not yet - The medium-term outlook for UK monetary policy is clouded by uncertainty about fiscal retrenchment, but analysts do not expect this to prevent rate hikes during 2010.

Japan: Main scenario intact ahead of Q3 GDP release - Analysts still expect real annualized growth of 2.0-2.5% through end-2009 but a soft patch in H1 10, when a stimulus gap weighs on consumption and public investment.

China: Currency appreciation to play a role in policy tightening deliberations - October data releases point to continued strong growth. Inflation and the pace of monetary policy tightening represent key risks to the outlook in 2010.

Emerging Asia (ex-China): A decent start to Q4 - Manufacturing sector growth looks to be on a strong footing in India.

EMEA: Only small bounce in EMEA's ste - EMEA growth is still lagging other EM regions, as balance sheets damaged during global recession are delaying a swift recovery. Higher exports are needed to rekindle growth.

Latin America: Is Asia's food price shock heading this way? - A potential upswing in food prices and other supply-side shocks are risks to monitor, as they could spoil the relatively benign outlook for inflation in the region.