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2009 RATES CONFERENCE

Global Economic and Market OutlookLarry KantorManaging Director, Head of Research, Barclays Capital

June 19, 2009

PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING ON SLIDE 8.

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2009 RATES CONFERENCEOrders Point toManufacturing Rebound

Source: Barclays Capital.Notes: New orders-inventories series is normalized; constructed using sub-components of country PMIs.

-35

-30

-25

-20

-15-10

-5

0

5

10

15

98 00 02 04 06 08

-6

-5

-4

-3

-2

-1

0

1

2

Global manufacturing output, % 3m/3m ann. (lhs) Global new orders less inventories (rhs)

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2009 RATES CONFERENCE

-30

-25

-20

-15

-10-5

0

5

10

15

20

98 99 01 03 05 07 09

Manufacturing Production (3mth % chg, saar) Real Consumption of Goods (3mth % chg, saar)

US Consumption Has Stabilized, butProduction Is Still Falling Sharply

Source: BEA, Federal Reserve Board, Haver Analytics, Barclays Capital.

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2009 RATES CONFERENCE

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

60 65 70 75 80 85 90 95 00 05

Change in Real Private Inventories as a % of Real GDP

Q2 f/c

US Inventories SignalRecession Bottom

Source: BEA, Haver Analytics, Barclays Capital.Notes: Shading indicates recession as defined by the NBER.

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2009 RATES CONFERENCE

20

30

40

50

60

70

80

60 65 70 75 80 85 90 95 00 05

ISM Manufacturing New Orders Index

And So Do USManufacturing Orders

Source: ISM, Haver Analytics.Notes: Shading indicates recession as defined by the NBER.

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2009 RATES CONFERENCEJobless Claims and IndustrialProduction Are Reliable Signals

Industrial Production, Indexed to Trough Initial Jobless Claims, Indexed to Peak

Source: Federal Reserve Board, Department of Labor, Haver Analytics.

40

50

60

70

80

90

100

110

-16 -12 -8 -4 0 4 8 12 16

Months from peak

Oct 70Mar 75May 80Sep 82

Mar 91Oct 01Mar 09

95

100

105

110

115

120

-16 -12 -8 -4 0 4 8 12 16Months from trough

Nov 70

May 75Jul 80Dec 82

Mar 91Dec 01May 09forecast

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2009 RATES CONFERENCE