Two statements are particularly noteworthy this week. The first results from an article by Olivier Blanchard, chief economist at the IMF published in the September of the journal "Finance and Development." He said the economic recovery has begun "global, but the recovery will not be easy." The second emanates from the President of the Central American Bank, Ben Bernanke. He said last Friday that the United States had "avoided the worst and has relied on an economic recovery in the short term but it will be slow to restart. After four consecutive quarters of declining gross domestic product, many economists expect the recovery in U.S. economy will reach the end of September if it is

already underway. In Europe, the situation seems to be improving even faster. The France and Germany have announced a growth of 0.3% of GDP in the second quarter. Japan has done better by posting a growth estimate of 0.9% over the same period. Moreover, since last July, the OECD noted that the compounds developed indicators for the month of June 2009, showed more signs of sustained improvement in economic prospects compared to those published last month. For the OECD area, the composite leading index rose 1.2 points in June but remaining below 5 points from its level in June 2008, pre-recession period. The beginning of the recovery in stock markets around the world began in late March, early April (see our article in the May 27 "The markets are betting on economic recovery"). Investor sentiment was then directed to a stop or a gradual reduction of degradation of economic statistics in the coming quarters, thereby stabilizing or improving fundamentals in late 2009 or during 2010. It is precisely the scenario that was done, which has only confirmed throughout these past weeks. All these factors largely explain the stock market rally which we attended in late summer. A major uncertainty remains: what will be the extent of economic recovery in light of constraints on its strength and its ability to extend beyond the "technical" aspects (recovery of business after a rapid and massive movement destocking in the fourth quarter of 2008 and continued during the first quarter 2009). The importance of recovery plans of public policy as the premium in case the car is expensive and can be extended indefinitely. The massive increase in public spending has translated around the world by an explosion of deficits increasingly unsustainable without higher taxes. The second factor likely to weigh on the strength of the recovery is the sharp rise in unemployment, firms have decided quickly to adjust their workforce to their declining orders and lower their production. The support of private domestic demand likely to slow even when questioning the impetus generated by public spending. Weak growth in wage income and the uncertainty associated with rising unemployment and job insecurity may represent handicaps to the continued consumption remained far more resistant. The weakness of domestic demand should probably not allow, in particular France, a revival of business investment, they slumped in recent months. The only sources of growth can then come only from outside. It's still on the engine that account for Germany out of recession, its order books for export having replenished in recent weeks in particular those intended, emerging countries, growth remains relatively strong in particularly in China. The competitiveness of exports should in the coming months to remain a leading solutions to the recovery of economies. Competitiveness should be exercised through an appropriate specialization of exports but also competitive prices due to the ability to maintain weak currencies (depreciation of the remainder more than ever a strategic tool for business competitiveness). Monetary policies in particular U.S. should remain broadly accommodative and the dollar at a low level in the coming months. In that environment out of recession, recovery almost total savings should be quite sluggish, especially in Europe and the United States, the risk of strong rebound in prices remained fairly low, competitive pressures and globalization continues to exert deflationary effects despite a rise in raw materials. (see our article of February 18 last "From the board to note and inflation risks"). The evolution of 10-year government bonds on both sides of the Atlantic seem to attest. We recall here that in early June, while signs of economic recovery are beginning to multiply, the rate of OAT 10 years continues its rise to 4.05% after reaching a low of 3.30% in late December 2008 following the bankruptcy of Lehman Brothers (systemic risk to global financial crisis). It initiates from a drop that lowers its level last August 20 at 3.45% down 60 basis points compared to 05 last June. It seems that many investors continue to be cautious, promote safety and do not believe for an early resumption of inflation. Nevertheless the importance of public debt should lead to demand risk premiums more important (likely increase in long rates) or to migrate to riskier financial assets but more profitable, the company shares eg, this which explains the low volumes of transactions being recorded on the stock markets but also the sharp rise in prices this week.