Link para a apresentação de US: http://bit.ly/us-outlook-apr16

* As anticipated in our last outlook report the Fed decided to pause to watch: impact of tightening financial conditions, dollar and oil/commodity prices, drop in inflation expectations, path of actual inflation, ISM and manufacturing data, credit data, inventory adjustment.

* But the Fed also opted to emphasize risks to the global economy and the asymmetric risks facing the normalization of policy rates.

* Fed stopped short of supporting a period of inflation overshoot to offset the below target prints.

* Soft-patch in consumption in 1Q (despite incipient manufacturing rebound) keeps pushing forward the next rate increase.

* Risks abound, but my guess is that the economy will remain in the current path, global worries would not escalate and, by mid 2016, the Fed would be ready to signal rate hikes would resume. Two hikes in the second half of 2016 continues to be a reasonable base case (July or Sept for the next one).

* Intermediary inflation swaps (5-year swap, 2 years forward) appear too low.

* Inflation in the last five years was 1.4%/year, even after the large drop in energy prices !!

* If oil prices stabilize, inflation would increase to 2.0%-2.5%.

* Recall the Fed story of asymmetric risks favor a pickup in inflation.

* But wasn't this pick-up in inflation the story of 2015? Yes, but China and oil changed the picture. Would it happen again?

* Recall that, a year later, the economy is even closer to NAIRU. Is the Phillips curve really dead?

World trade prices (exports and imports) dropped materially since mid-2014, in tandem with oil prices. Trade prices fell by 45 % for advanced economies (AE), 60% for emerging economies, while oil prices dropped 120% in the same period ! (welcome to log % changes !!)

This has confused some pundits that often mention the collapse in global trade growth looking only at nominal (or current US$) trade performance. Looking at trade volumes one reaches a different conclusion (more on this below).

The overall drop in trade prices for both emerging and advanced economies masks an important difference: the regions faced opposite terms of trade shocks in recent years. Advanced economies are facing improving terms of trade, while EM economies are facing a declining terms of trade (but with a tentative sign of a rebound, see charts).

Looking at trade volumes, one can see that demand (imports) from advanced economies picked up late 2013 and is growing at a healthy 3.5% pace, but might have slowed a bit more recently.

Emerging economies show a completely different picture. Both export and import volumes have been relatively flat since mid-2014. More recently, imports are tentatively rebounding, but exports remain lackluster.

The consolidated world trade statistics show a puzzling divergence: consolidated imports (of which EM account for one-third) is growing at a healthy pace, while consolidated exports (of which EM account for 40%) are roughly flat. Growth of average trade volume is at 1% yoy, with imports growing at 2%yoy and exports flat.

Real non-petroleum exports are down 2% in Oct/Nov vs Q3 and imports are down 0.6% in the same comparison. Excluding petroleum, exports volume contracted by 1.6% and imports by 0.4%.

Trade results for October/November, if repeated in December, would lead to another negative contribution of external trade to growth of around 0.4pp. But negative contribution from external trade to growth, per se, does not imply overall GDP growth will be weak (see for instance the negative contributions from net exports to growth in the 1997-2005 period)

The charts below show the volumes of non-petroleum exports and imports. Exports volume is flat while imports volume is growing at around 5%.

The jump in import growth precedes the stronger USD and coincides with an upturns in job creation and consumption that happened in 2014 -- therefore not likely to be a strong consequence of the currency strength and import substitution (although it may play some role).

The slowdown in exports, however, happened at the turn of the year, and therefore could potentially be a quick response to the strenghtening of the dollar that started in mid-2014.

However, the chart below shows that US exports are moving roughly in tandem with world exports. US exports relative to world exports dropped since the start of 2015, but the size of the adjustment does not suggest that the dollar strengthening is playing a major role for weak US exports.

Of course it could be just a matter of time for US exports to shrink relative to world exports, but the recent weak performance seems more likely a result of sluggish world trade rather than dollar strength.

Meanwhile, the ISM export orders improved a bit but still do not suggest upside in the near term.

Trade results for October, if repeated in the next couple of months, would lead to a material drag in Q4 growth again. Note, however, that periods of consistent drag from net exports were also observed in the 1997-2005 period -- see chart.

Imports are growing at a strong pace and exports collapsed in the turn of the year and remained roughly flat since then.

The jump in import growth precedes the stronger USD and coincides with an upturns in job creation and consumption that happened in 2014 -- therefore not likely to be a strong consequence of the currency strength and import substitution (although it may play some role).

The slowdown in exports, however, happened at the turn of the year, and therefore could potentially be a quick response to the strenghtening of the dollar that started in mid-2014.

However, the chart below shows that US exports are moving roughly in tandem with world exports...yes US exports relative to world exports dropped since the start of 2015, but the relative level is only 1.5% below the trend since the crisis. This means that the recent strengthening of the dollar is not causing a loss of US market share in world (volume) exports.

Of course it could be just a matter of time for US exports to shrink relative to world exports, but the recent weak performance seems more likely a result of sluggish world trade rather than dollar strength.

Meanwhile, the ISM export orders do not suggest any upside in the near term.