Global Market Update and Trend Analysis

36 w/c 2/9/19 Current Trend W1 chart Monday Tuesday Wednesday Thursday Friday Additional US tariffs come into effect, immediate Chinese retaliation; Hurricane Dorian downgraded to cat 4 and stuck on Bahamas Extradition bill withdrawn in Honk Kong 2:27am Thurs - China s Mofcom said US and China to hold talks in Washington in October, consultations mid Sept Events Risk Neutral Neutral Neutral/on On On Themes Equities (sentiment); GBP (Politics), strong USD, weak AUD, NZD Average Hourly Earnings; Non-Farm Employment Unemployment Powell - upbeat ISM Manu PMI; USD At 2 yr + highs Holiday Fed voter Bullard favours 50bp cut EUR Down trend broken JPY At 3 yr high MPs will try to seize control of Parliament today for Bill banning no-deal (vote Wed) - achieved Construction PMI Services PMI; Inflation Report Hearings; Vote on Rebel Bill (passed), Election (failed) Bounce off post- referendum low Big Brexit Week UK Manufacturing PMI GBP Lords approve Rebel Alliance bill Trade Balance; Overnight Rate, Statement No mention on future rate moves CAD 1 yr resistance holding Holiday (Un)employment Retail Sales; Cash Rate, Statement no change as expected, global economy reasonable, nothing said to increase chances of cut at next meeting AUD At 4 yr low GDP Trade Balance NZD At 1 year low CNY Caixin Manu PMI Equities Rangebound Gold Breakout up API Inventories: +0.4m vs -2.5m EIA Inventories: -4.8m vs -2.4m Oil Rangebound

Week 36 Review A solid week of reasonable risk sentiment with most days being neutral to on , aided on Thursday with positive noises on the US/China trade war. Global equities rose and GOLD fell back. WTI remained range-bound. The GBP saw a gain over the week as the markets saw the Brexit shenanigans as being positive for the economy and ignored the three PMI misses. The JPY reflected the risk sentiment by showing weakness. The USD was negatively affected by a poor ISM Manufacturing PMI number and some dovish Fedspeak on Tuesday and a miss on NFP on Friday. The EUR fell without apparent catalyst. The mood buoyed all three commodity currencies, as expected. I traded the GBPUSD long for a gain of 2.4% and the Japan225 long for a gain of 1.77%.

37 w/c 9/9/19 Current Trend W1 chart Monday Tuesday Wednesday Thursday Friday Storm Dorian hits US and now in Canada China ready to buy US goods as sweetener prior to trade talks; Trump fires National Security Advisor Bolton global risk premium declines China announce tariff exemption list, Trump delays tariff increase from 1st to 15th October; UN prep for US/Iran meeting Events Risk On On On On On Themes Sentiment driven equities, Commodity currencies, GBP USD At 2 yr + highs Core and Headline PPI Core and Headline CPI Core and Headline Retail Sales Refinancing Rate, Statement and Press Conference deposit rate cut by 10bp; QE re-introduced EUR20b/mth EUR Down trend broken JPY At 3 yr high Bounce off post- referendum low GDP, GBP Average Earnings Index Manufacturing Production CAD 1 yr resistance holding NAB Business Confidence (1 vs prior 4) sees rate at 0.50% as of Feb 2020 (from 0.75%) AUD At 4 yr low Westpac Consumer Sentiment NZD At 1 year low Business NZ Manufacturing Index CNY CPI Holiday Equities Rangebound Gold Breakout up EIA Inventories -6.9m vs -2.7m; API Inventories: -7.2m vs -2.7m Oil Rangebound OPEC downgrades global growth in oil demand; Production cut compliance at 131%. OPEC/JMMC Meetings

Week 37 Review Week 37 was a pretty solid risk-on week. The first in a long time. A lot of big issues seemed to fade slightly: the US and China seemed to be making positive moves towards each other, National Security Advisor Bolton was sacked and the UN was preparing for a US/Iran meeting. Global equities rose with the Japan225 being the star performer, bolstered by the weak JPY. GOLD moved down on the positive risk sentiment. WTI didn t do much. On currencies, the GBP rose as chances of a no-deal Brexit lessened. AUD was bolstered by the sentiment. The ECB re-introduced QE at the rate of EUR20B/month. This is a bad sign for the Eurozone economy. US 2Y and 1Y bond yields rose, as bond prices fell on the positive sentiment.

38 w/c 16/9/19 Current Trend W1 chart Monday Tuesday Wednesday Thursday Friday Drone attack on Saudi refineries (over weekend); US blaming Iran Fed makes two interventions into repo market showing unusual lack of liquidity in banking system Trump prefers sanctions to military action re Iran 3rd repo intervention Powell seems relaxed Events Risk Neutral Neutral Neutral Off Off Themes Equities (watch sentiment), GOLD, USD (Fed), GBP (Super Thursday, Brexit - newsflow), AUD USD Pulling back from high Fed Funds Rate etc EUR Rallying from low DE ZEW Economic Sentiment Sentiment-driven pull back Monetary Policy Statement; Rate no drama JPY Holiday Bounce off post- referendum low UK PM meets EC Pres Juncker - shambles Retail Sales; GBP CPI Super Thursday no drama CAD Pulling back from high CPI Core Retail Sales Monetary Policy Mtg Minutes little change from previous AUD Rallying from 4 yr low (Un)employment Rallying from 1 year low NZD GDP Fixed Asset Investment; Industrial production CNY Equities 3 weeks of gains Sentiment-driven pullback Gold Saudis say oil supply fully back online API Inventories: +0.6m vs -2.5m Energy Intel say Saudi outage 40% restored with remainder due on stream by month end 13% spike drone attack EIA Inventories: +1.1m vs -2.1m Oil

Week 38 Review The week starts badly with a drone-strike on Saudi oil facilities. Iran is blamed. Oil spikes 13% but gives half of that back as Aramco say they are fully back on line. The Fed makes multiple interventions into the overnight repo market, causing concern at the structure of the global banking system. The Fed reduces interest rates by 25bp as expected and is seen as hawkish. Neither that BoJ nor the BoE cause any drama in their rate-setting meetings. Equity indices show little movement. The GOLD dip comes to a halt on the relatively poor sentiment compared to prior week, week 37. The USD rises after a fortnight of pulling back. The EUR hits a two-year low. The JPY rises on worsening sentiment. The GBP moves sideways on a lack of catalysts. AUD and NZD drop as sentiment sours. CAD rises on the oil price. US 10Y and 2Y bond yields drop, reflecting the sentiment.

39 w/c 23/9/19 Current Trend W1 chart Monday Tuesday Wednesday Thursday Friday US grant tariff exemptions to China; China state media say deputy-level talks constructive; NY Fed to conduct overnight repo every day until 10th Oct Trump impeachment proceedings begin in the US; Trump hawkish on China at UN Trump says trade deal with China could happen sooner than you think . Reaches first stage trade agreement with Japan. Chinese Foreign Minister - China keen to buy more US products; US-China Principal-level talks to take place 10, 11th Oct, Washington DC Events Risk Neutral Off On Off Off Themes Gauge sentiment EURO50, GOLD, GBP (skewed to upside), EUR weakness Core Durable Goods; Core PCE Price Index USD Pulling back from high CB Consumer Confidence Final GDP DE, FR Manufacturing and Services PMI; ECB President Draghi growth momentum slowed markedly EUR At 2 year low Sentiment-driven pull back over JPY Holiday Tokyo Core CPI Bounce off post- referendum low Prorogation verdict expected Gov lose GBP Parliament re-starts CAD Pulling back from high Down trend near 4 yr low RBA Gov Lowe optimistic, lowering rate cut expectation AUD Rate and Statement no change, new info did not warrant change to policy NZD Approaching 4 year low CNY Equities 3 weeks of gains Sentiment-driven pull back over Gold Benefitting from drone attack Saudi Aramco backpedal on repairs now many months API Inventories: +1.4m vs -0.2m EIA Inventories: +2.4m vs -0.3m Oil

Week 39 Review Week 39 was characterised by low volatility making trading difficult. Noises on the US/China trade front were uniformly positive, but sentiment was soured by the beginnings of impeachment proceedings against US President Trump and the continuation of repo operations in the US banking sector. On Friday, the Fed s chosen measure of inflation, PCE, missed expectations. In the UK, the Supreme Court ruled the prorogation of parliament to be unlawful. In the Eurozone, ECB President Draghi said growth momentum had slowed markedly and there were poor PMI reports for both Services and Manufacturing in Germany and France. Equities fell from highs. Oil almost completed the retracement of the gap-up caused by the drone strike on Saudi oil facilities. On currencies, the USD rose to a 2 -year high; the EUR broke a 2 -year low; both the AUD and NZD are at 4-year lows; the GBP s rally from lows stalled and the JPY s pullback from highs stalled.

40 w/c 30/9/19 Current Trend W1 chart Monday Tuesday Wednesday Thursday Friday Events Risk Themes Equities, GOLD, weak EUR, GBP (with care), AUD weak (vs USD, JPY) Average Hourly Earnings; NFP; Unemployment USD ISM Manufacturing PMI ISM Non-Manufacturing PMI At 2 -year high EUR CPI Flash Estimate DE Holiday Breaking 2 -year low JPY Pullback from high stalling Current Account; Opposition leaders to meet to plan to force PM to seek earlier extension (currently 19th Oct); Brexit plan expected after Tory Conf GBP Manufacturing PMI Construction PMI Services PMI Rally from low stalling CAD GDP Trade Balance Approaching recent highs Cash Rate and Statement; Lowe Retail Sales; AUD Choppy at 4 yr low RBA Financial Stability Review ANZ Business Confidence; NZIER Business Confidence NZD Approaching 4 year low Manufacturing PMI; Caixin Manufacturing PMI CNY Holiday Holiday Holiday Holiday Equities Falling from highs Gold Consolidating Retracing after drone attack Oil API Inventories EIA Inventories