Global leading indicators continue to weaken, suggesting global growth is poised to slow in the short term. However, there are also some signs of stabilisation. In US manufacturing ISM surprisingly improved in June, despite the details not being as strong as the headline. In China there are signs of stabilisation with signs that inventory cuts have run their course. Finally, Japan now appears to be recovering relatively fast in the wake of the earthquake. However, the European debt crisis has added additional uncertainty. We still expect the current weakness to be a temporary soft patch and expect the global economy to start improving in H2.

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