OUR

ESSENTIAL

TRADES for Q4

Follow #SaxoStrats on:

FROM FEAR TO
OPPORTUNITY

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Emerging opportunities
Late summer is usually a relatively calm period for financial markets where a low frequency of risk events gives us the space to settle back, examine our strategies and perhaps redefine
our goals. It wasnt like that this year.
First, the protracted Greek drama has the financial community wondering about the viability of the common currency and then China threw an equities curveball as its markets imploded.
Most recently, Europes migrant crisis and the policymakers ham-fisted and querulous responses raises questions about the viability of the European Union itself.
But somehow, weve struggled through. Following a snap election, Greece appears to have some hope of following the course that has been set. The Chinese authorities have taken firm
action to avert a more serious rout and in Europe, the dogged pragmatism of Germanys Angela Merkel might yet force a solution to the biggest upheaval on the continent in decades.
We still have much to contend with. The Volkswagen scandal came out of nowhere and is still unfolding. The plunge in the price of oil and other commodities meanwhile has scores of
emerging markets under severe pressure. And yet, it is this very sector that we see hope.
While the timing of a US interest rate move remains a shadow over such economies, the very volatility that engenders creates its own trading opportunities. In this publication, we put our
team of experts through their paces, asking them to give us their best trading ideas for the months that lie ahead.
We hope youll be inspired!

Kim Fournais
Co-founder and CEO of Saxo Bank

TF

Lars Seier Christensen

Co-founder and CEO of Saxo Bank

TF

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Emerging
opportunities

After
the storm

Light
ahead

Intro

This Quarter

Commodities

by Kim Fournais and

Lars Seier Christensen

by Steen Jakobsen

by Ole S. Hansen

Chief economist

Head of Commodity Strategy

Rate
divergence

Dollar bulls
waiting

Fear
factor

Macro

Forex

Bonds

by Mads Koefoed

by John J. Hardy

by Simon Fasdal

Head of Macro Strategy

Head of FX Strategy

Head of Fixed Income Trading

Dark
horse

Wake-up
call

And it
snowed

Asia-Pacific

Equities

CEE Feature

by Kay Van-Petersen

by Peter Garnry

by Kirill Samyshkin

Asia Macro Strategist

Head of Equity Strategy

Sales Trader, Client Trading Services CEE

Co-Founder and Co-CEO of Saxo Bank

Q4

This Quarter

Commodities

Macro

After
the storm
This Quarter
by Steen Jakobsen
Chief economist

Emerging markets have been battered by a debt-induced perfect

storm, a dizzy US dollar and crumbling commodities prices. But
there is hope and investment
opportunities even though the
pretend-and-extend craziness of
printing money persists.

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Q4

This Quarter

Commodities

Macro

Forex

The seemingly endless cycle of pretend-and-extend is threatened by muddled communication

from central banks, less liquidity and a dramatic increase in volatility across all asset classes.
And the likely policy response to all of this? More of the same, of course! It does seem, however,
that the market is growing increasingly immune to stimulus promises and more alert to the misguided fairy tale projections it has been given by central banks (and governments) throughout this crisis.
The increase in volatility and the selloff in the safe asset of equities now totals more than $7
trillion lost since the peak. This could bring about a new beginning a move back towards reality as opposed to the artificial world of central bank-led credit growth. Dont forget that the weak
growth we have had since the financial crisis erupted in 2008 is almost entirely financed by an ever-increasing debt mountain.
A McKinsey Global Institute report, Debt and (not much) Deleveraging, points out that since
2007, debt has increased by a stunning $57 trillion globally, raising the ratio of global debt to
GDP by17 percentage points.
The biggest issuers of this debt have been China and emerging markets, which together are accountable for more than 50% of the new debt.
All of the EM countries have issued USD debt and converted it into local currencies, but as the dollar
grew ever stronger, this practice engendered a perfect storm for emerging markets.

A predictable outcome
Pretend-and-extend triggered a negative vicious cycle whereby EM-issued, dollar-denominated
debt was converted into local currencies. Then, the stronger dollar increased both the debt burden (as more dollars were needed to repay debt) and lowered commodity prices, a main export
for many of the EM and certainly for the old BRIC countries.
In turn, this meant less demand and less growth for EM.

Bonds

Asia-Pacific

Equities

CEE Feature

Where will the excess returns come from in a world of shrinking profitability (caused by lower
growth and inflation) and less productivity (caused by a focus on paper money returns instead
of real jobs and investments)?
The expected mathematical return year-over-year for both equities and bonds remains close to
or below zero for the next five years. The excess returns of stocks (and bonds) since the financial
crisis will have to be replaced by sub-par returns unless our economic model has changed fundamentally, which, of course, it hasnt.
Pretend-and-extend is the very definition of insanity keep repeating the same experiment
expecting different results
But there is a silver lining the perfect storm raging through emerging markets is also the biggest opportunity in decades. These markets have underperformed not only this year but also
since the commodity cycle peaked in 2011.
Now, valuations on all metrics, top-down and bottom-up, would be a screaming buy if not for
uncertainty about the Federal Reserve, which scored an own goal in September by once again
delaying the much-needed interest rate hike.

Its no wonder that world

growth is falling dramatically
the only surprise is that
policymakers seem surprised!

This happened in a world economy based on fiat money, dollar reserves, dollar-denominated
commodities and debt and a rising USD. Its no wonder that world growth is falling dramatically
the only surprise is that policymakers seem surprised!

TF
Emerging markets are hugely important for the developed worlds growth and exports. In any
given year, EM account for more than 50% of world growth a fact that has global investors
desperately searching for answers.

Follow us:

Click to read more from Steen Jakobsen

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

How to play
This Q4 publication is a defensive yet optimistic view on EM as the best-performing asset not only this coming quarter but also throughout 2016. The low-grade performance in the recent past
bodes well for future returns, as its about two standard deviations cheap relative to the long-term trend. For the connoisseur, several markets are dirt cheap even on classic metrics such as price/
earnings. These include Singapore and South Korea where forward P/E is currently trading at 12.1x and 10.9x versus US and European P/E in the mid-teens.
The way to play this will always be to enter FX trades first for reasons of liquidity and access. Many EM are not deep enough to cater for robust equity markets. In addition, academic studies show that
more than 80% of all returns in EM come from FX and not from owning bonds and stocks.
Having said that, we believe EM overall are a buy equities or credit as well as forex. The fact that we are in the midst of a perfect storm should not fool us into believing the sun will never shine
again.
The Feds reluctance to hike rates will probably lead to no hikes in 2015 as the window of opportunity is closing. The market is increasingly pricing the likelihood of the next Fed policy move as likely to be a rate cut as much as a hike.
This means that the long USD trade (which the market consensus loves) is about to be tested. The path of least resistance for higher growth in the world is a weaker dollar (reduces debt burden,
improves commodity prices, restarts recycling of capital from oil producers and China) and thats what we expect the world will get.The only concern is that growth will be so weak that we again
flirt with recession, not only in Europe but also in the US.
We named our Q3 Outlook: One-and-done fully expecting, naively, that the Fed would deliver its telegraphed and promised first rate hike in nine years, fully expecting it to happen under the
constraints of not having a US economy firing on all cylinders.
Now, we see one final round of global easing being implemented by the Bank of Japan, the European Central Bank and the Federal Reserve in Q4/Q1 as the business cycle bottoms. Fortunately,
the market will by that time have weakened the dollar, increased commodity prices and restarted growth from a low level. Economics and markets are finally becoming intertwined again meaning fundamentals matters, and thats just about the best news ever.
Embrace the volatility of the next few months as signs that the market and economies are healing not destructing. Reality has returned and so too, will emerging markets.

The perfect storm raging through emerging markets

is also the biggest opportunity in decades
TF

Click to read more from Steen Jakobsen

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Light
ahead
Commodities
by Ole S. Hansen
Head of Commodity Strategy

We see a ray of hope for commodity

markets if supply can be significantly reduced. But that remains a big
if, and if it fails to happen and demand falters, the pain for commodities could last even longer.

Q4

This Quarter

Commodities

Commodities spent most of September stabilising after several

raw materials, such as industrial metals, hit levels not seen since
the beginning of the millennium. Rising supplies of key commodities from metals to energy and crops continued to play
havoc with those emerging market countries whose prosperity
depends on exports of raw materials.
The extremely dovish September Federal Open Market Committee meeting highlighted worries about emerging markets.
If Federal Reserve chief Janet Yellen worries about the growth
outlook for some of the major drivers of commodity demand,
especially China, we should as well.

No quick rebound
Although we do not expect the selloff in commodities to continue, we are unconvinced of a rebound in prices over the coming months as the excess supply across the commodity spectrum is only slowly being reduced.
As we enter the final quarter of 2015, we see light at the end
of the tunnel for commodities assuming that supply is reduced.
But if demand fails to keep up, the tunnel could grow even
longer, leaving only a glimmer of hope.
The latest spate of weakness was triggered by Chinas decision
on August 10 to allow the yuan to weaken. This re-ignited fear
of a currency war, and many EM currencies already under
pressure from a rising dollar and the prospect of US interest
rates eventually moving higher took another blow.
Brazil and Russia are now both in recession. They can largely blame
the commodity selloff, but internal problems (corruption in Brazil)
and external trouble (sanctions against Russia) weigh as well.

Oversupply woes
Prices tend to recover much more slowly from a supply-driven
downturn than from a demand-induced drop as producers often try to make up for the shortfall in revenue by increasing pro-

Macro

Forex

Bonds

Asia-Pacific

Equities

duction wherever possible. However, producers in EM countries

where currencies have been hit have to a certain extent been
shielded from falling commodity prices.
The current weakness in commodity prices differs from what
was seen during the 2008-09 global financial crises when a
deep, sharp but short-lived recession triggered a collapse in demand which subsequently recovered fairly quickly. The current
weakness has been driven more by rising supply and collapsing
investor confidence than by a downturn in economic activity.

Hedge fund exposure cut

Hedge funds operating in the US commodity futures market
collectively have a near-record low exposure to rising commodity prices. While this lack of confidence has helped drive commodity prices to a multi-year low, it also holds the key to the
eventual recovery.
China is currently being steered in a more market-oriented direction. While this will yield plenty of benefits in the longer
term, it also makes the economy less manageable in the shorter
term. After more than doubling the previous year, the Chinese
stock markets 45% correction since June has raised worries
about the demand outlook for the worlds biggest consumer of
raw materials.
But the re-balancing of the commodity markets has begun. In
energy markets, we are seeing a slowdown in US oil production,
while cheap fuel will help boost global growth and demand. Industrial metals are finding support from producer cutbacks and
lower overhang of inventories.
Crude oil: The current weakness in the oil markets, which began
more than a year ago and became a rout following the November Opec meeting, has yet to establish a base strong enough to
convince market participants that the worst is over.
Global demand growth has recovered strongly in response to
lower prices, but with supply continuing to outstrip demand, the

CEE Feature

Follow us:

road to normalisation is long. The renewed weakness in the

third quarter was driven by an expected pickup in exports
from Iran once sanctions are finally lifted in the first quarter
of 2016.

Prices tend to recover much more slowly

from a supply-driven
downturn than from
a demand-induced
drop.
TF

Click to read more from Ole S. Hansen

Energy
Bull

Bear

Removal of Iranian sanctions trigNon-Opec production, not least US

gers a market share battle within
shale, slows faster than expected
Opec
Geopolitical instability increases in Global storage capacity exhausted
key producing countries
from relentless inventory rise
Demand growth gathers pace as a
result of lower oil prices

Chinese economic slowdown triggers lower demand for oil

Q4

This Quarter

Commodities

#SaxoStrats

on TradingFloor.com
Sugar recovery well supported
Sugar weakness has been prevalent for so long driven
by weakness in the Brazilan real, that weve almost forgotten to look up. But there is evidence for a prospective move in the sweet stuff especially if El Nino comes
out to play.
Read more...

#SaxoStrats
Streaming opportunities from our team of experts.
All trades include entry, stop, target and timing.
Your Next Trade.

FOLLOW

The final quarter of 2015 will be challenging, with refinery

maintenance triggering a seasonal slowdown in demand,
while recent events in China have sparked (so far) unfounded
worries about a slowdown in demand from the worlds biggest importer of crude oil.
US oil production is slowing, and the Energy Information Administration sees non-Opec output falling next year by the
most since 1992. If realised, this will go a long way to stabilise
the market during the second half of 2016 and should help oil
prices gradually recover back to and eventually above
levels seen earlier this year.

Macro

Forex

Bonds

Asia-Pacific

While we remain unconvinced that a low in the market has

been established, traders should be hesitant to get too bearish, not least considering the aggressive short-covering rally
witnessed in August. The road to recovery will be long, which
leaves the price upside for the rest of the year capped at $53/
barrel on WTI and $55/b on Brent crude.
Gold: While the headlines about gold and silver have been
predominantly negative all year, these metals nevertheless
remain two of the best-performing commodities on a relative
basis. During the past year, the Bloomberg precious metals index is down by less than 10%, compared with around 50% for
energy and 26% for industrial metals.
The so-called currency war will continue to attract emerging-market investors and central banks into dollar-based assets, not least from India and China. The Indian and Russian
central banks were strong buyers of gold in August, and this
has helped the market stabilise amid continued selling from
hedge funds and exchange-traded products.

Equities

CEE Feature

Follow us:

But having seen two robust recoveries within a short period, we sense a change of sentiment is unfolding. Key to this
would be a move above golds August high at $1,170/oz,
which would confirm a floor has been established. We maintain our year-end target of $1,250/oz and only a break below
$1,080/oz would bring a change to this outlook.

The so-called currency

war will continue to attract emerging-market
investors...

In a producer perspective, the currency moves are likely to

have pushed the marginal cost of production down, leaving
producers additional room to operate. On that basis, the eventual recovery in gold hinges on a change in sentiment among
paper investors, such as money managers and hedge funds.

Click to see
the chart in
full size

Most of the third-quarter rallies were driven by hedge funds covering short positions, first after the Chinese devaluation and second after the dovish FOMC statement on September 17.
The combination of a dovish Fed, uncertainty about Chinas
currency policy and the health of the global economy as well
as low investor involvement may eventually be what triggers
or forces a sentiment change. We have argued that the first
US rate hike could become a buying opportunity as it would
remove the uncertainty that has prevailed for many months.
As we still wait for what potentially could be an elusive rate
hike, some uncertainty will linger.

Precious Metals
Bull
Geopolitical events/worries

Bear
Dollar reverts back to strength

Robust physical demand from cenUniversally low inflation

tral banks
Fed hikes rates and then pauses as
the US economy stalls

Rising real yields raise the opportunity cost of holding precious

metals

Q4

This Quarter

Commodities

Macro

Rate
divergence
Macro
by Mads Koefoed
Head of Macro Strategy

The ultimately fruitless wait for a

Federal Reserve rate hike was perhaps the landmark third-quarter
macro event, creating a dynamic of
policy divergence between the Fed
and the easing policies of the Eurozone. Emerging markets, however,
also remain a factor as the extreme
weakness seen after the late-summer withdrawal of risk appetite may
well prove overdone.

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Q4

This Quarter

Commodities

The impending rate hike from the US Federal Reserve and a third
Greek bailout have continued to dominate headlines this year,
but the health and performance of emerging markets has also received increased attention following the third-quarter, China-driven correction in risky assets.
Chinese and US stock indices are both down for the year while
European stocks are nearly flat (having previously been up more
than 20%). Stocks were not alone in taking a beating, however,
as the outlook for emerging-market economies has also been hit
hard as the Chinese hard-landing camp continues to grow in
size and influence
We have now had below-consensus Chinese growth forecasts
for several years, and so the current GDP growth path is arguably validating our view. Nevertheless, we feel that the rapidly building pessimism about China and emerging markets in
general is overdone.

No love for emerging markets

Over the last two years, Chinese authorities have steered the
worlds second-largest economy in a more market-oriented direction. In the longer term this will doubtlessly provide plenty
of benefits, but in the shorter term it is making the economy
less manageable.
This is the main factor behind the commotion in equity markets and the slowdown in economic growth seen over the
past few quarters.
At present, it is doubtful whether Chinas official 7% expansion
target can be met this year. Credit growth has re-accelerated during the summer months as authorities stepped up their response
to the slowdown, and both the housing market and the services
sector are growing robustly.
Concern about the weak Chinese manufacturing cycle, however, is overshadowing growth in other parts of the economy.
Therefore, we may well see an uptick in growth in the final
stage of 2015 and into 2016 before growth slows further in
line with our forecasts.

Macro

Forex

Bonds

Asia-Pacific

China is not the only emerging-market economy that is lacking

love at the moment. Other prominent emerging economies are
struggling, and Brazil and Russia are now in recession. They can
point accusatory fingers toward the commodity selloff, but other internal (corruption and a lack of reforms in Brazil) and external (sanctions against Russia) factors are contributing to the
overall weakness.
While we do not expect the selloff in commodities to continue,
we also remain unconvinced that any swift rebound in prices is
on the cards as the size of the excess supply across the commodity spectrum is simply too great. In addition, serious fiscal challenges loom for Brazil following the countrys Q3 loss of its investment-grade status from S&P.
The recession is expected to continue into 2016 as both private
spending and investment continue to contract. India, meanwhile,
should continue to post high growth rates in both Q4 and into
next year fuelled by a rebound in sentiment following the last
years election.
It is worth noting, however, that we are still waiting for the largescale reforms that were promised.

Equities

CEE Feature

Follow us:

All of this has come despite strong headwinds from the USD,
which has strengthened by close to 20% since mid-2014.
The currency drag will remain present into 2016 though the
effect will fade over the coming quarters as a result of USD
Index stabilisation this year. A renewed bout of strength is
certainly a possibility, however, as the FOMC starts tightening
and if emerging markets weaken further relative to expectations.
The euro area, on the other hand, is struggling to turn the
support from EUR and oil weakness into sustainable growth.
The short-term economic outlook looks benign, but further
ahead the path looks bumpier as structural reforms have been
put on the backburner in most countries.
Italy and France particularly continue to underwhelm in this regard, which explains our continued sour outlook. Meanwhile,
Spain is set to continue as the star performer in 2016 helped
by a (slowly) recovering housing market, but the 2015 Spanish
election to be held no later than December 20 remains a key
point of uncertainty for European risk sentiment in Q4.

Central banks playing tug-of-war

The Federal Open Market Committee is not far away from its
much-awaited rate hike, although September has ultimately
proved a disappointment for hawks as elevated risk sweeps across
global markets. There is no doubt, however, that the FOMC is getting closer to the first hike in nearly a decade and the December
FOMC meeting remains likely though the chance of a no-hike this
year has increased.

TF

Click to read more from Mads Koefoed

Across the Atlantic, European Central Bank president Mario

Draghi is doing all he can to signal that the current quantitative
easing scheme may be enhanced in either scope or length.
These diverging central bank policies are indicative of the present
performance of the two economies. The US economy is growing
robustly, driven by the re-emergence of the all-important consumer onto the economic scene, a recovering housing market.

Click to see the charts in full size

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

#SaxoStrats

Growth of GDP in % for 2014, 2015* and 2016*

on TradingFloor.com
0.9

7.3

1.5

6.7

1.5

6.2

End of austerity, private spending

growth, and loose monetary policy.
Low energy prices and low euro.

Some fiscal and monetary easing.

Structural reforms still lacking in some

parts of the euro bloc. Geopolitical
tensions.

Concerns about credit growth will see

authorities refrain from large-scale stimulus. Rebalancing towards consumption
will hurt growth.

China on the rise again

With Chinas efforts to move from an investment-led to
a consumer-led model economy hitting choppy water,
you could be forgiven for steering clear, but there is
plenty of reason to expect China to rise again.
Read more...

Homebuilders as proxy for stronger US economy

3.0

2.4

2.5

2.6

2.2

2.8

Stronger consumer, recovering housing market, and low energy prices.

Strong private sector growth. Government policies remain supportive.

The current trajectory of the US economy sems to be

upwards and that ought to be a boon for home construction. S&P Homebuilders is one that could benefit.
Read more...

Housing sector slows materially. Strong

(-er) GBP.

Stronger US dollar.

Were showcasing just a taste of our #SaxoStrats. Link

through to more views from the team.

-0.1

2.5

0.8

2.7

1.2

2.8

More monetary and fiscal stimulus may

be introduced to arrest the economic
slowdown.

Lower energy prices and absence of

austerity in advanced economies.

Structural reforms still lacking.

Geopolitical tension. Larger-than-expected slowdown in China and other EM

economies.

Key
GDP Growth 2014

GDP Growth 2015

GDP Growth 2016

Upsides

Downsides

GDP (gross domestic product) is real, inflation-adjusted, year-on-year changes in percent. 2014 is actual while 2015 and 2016 are forecasts.

#SaxoStrats
Streaming opportunities from our team of experts.
All trades include entry, stop, target and timing.
Your Next Trade.

FOLLOW

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Dollar bulls
waiting
Forex
by John J. Hardy
Head of FX Strategy

Septembers FOMC policy statement saw the Fed recognising that

its monetary policy is global policy,
and particularly so for emerging
markets. For Q4, we look for a thaw
in some emerging market currencies, taking a conservative approach
and finding value in Mexico.

Q4

This Quarter

Commodities

The extremely dovish September Federal Open Market Committee meeting saw chair Janet Yellens Federal Reserve acceding that Fed policy is global and particularly emerging
market monetary policy, not just US monetary policy.
Extreme market volatility in late August and developments in
commodities and Chinese exchange rate policy distracted and
alarmed the Fed sufficiently to ignore very strong US activity
and employment data and tilt their preference to sitting on
their hands for just a little longer.
That most likely means a move to hike rates at the mid-December FOMC meeting, by which we should have a sense of
whether the Fed is risking getting dangerously behind the
curve on starting its withdrawal of accommodation or will it
sit on its hands until well into 2016.
The further delay to the Feds first rate hike together with the
potential for more QE from the ECB could see a significant
bounce in emerging market currency prospects during Q4 and
delay the return of the USD bull market, though we could see
a quarter in which the USD starts weak but finishes strong.
There is a significant risk in Q4 that we see another disorderly
move in risk sentiment whose result would be a spike higher
in the Japanese yen in particular, if not also the euro, as was
seen in the August market meltdown.
Any marked appreciation in the euro or the yen from here,
however, will likely be met with new easing measures from
the European Central Bank and the Bank of Japan, eventually
helping to turn the USD back to the strong side and possibly
also bringing further relief to emerging markets.
The wildcard for Q4 could be the pace that China allows its
currency to devalue after fighting pressure on the currency to
weaken with extensive reserves after its August devaluation
and exchange rate regime change to a managed float (with
double emphasis so far on the managed.)

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Spotlight on emerging market currencies

Emerging market currencies were under massive further strain
in Q3 in an extension of the move lower that started almost
perfectly in synch with the end of the Feds tapering process
in late 2014 until the lead-up to the September FOMC meeting.
In Q3, the renewed commodities meltdown and then the
China devaluation and global market turmoil in late August
provided a further pummelling of already down-and-out exchange rates. The emerging market currencies with the worst
structural setups including the likes of commodity-dependent Brazil and Russia, as well as Turkey and South Africa may
have become so cheap after this latest bout of selling that it
will only take a modest return of market risk willingness to see
a significant bounce in their prospects in Q4, even as significant questions remain on whether (carry-adjusted) lows are in
for the longer haul as these countries continue to face steep
structural challenges from USD-denominated debt.
But rather than focus on the higher beta/higher risk currencies
to pick interesting emerging prospects for Q4, we would prefer a conservative approach of finding the emerging market
currencies that may have been excessively beat down by the
latest across the board pressure and where the structural situation looks healthier. As such, we will shine the spotlight on
the Mexican peso and Polish zloty as our choices for a comeback in Q4.

G-10 rundown for Q4

Currency
USD

EUR

JPY

Q4 Outlook
USD bulls will have to wait though strong US data
could suggest the Fed risks getting behind the curve, so
a mid-quarter revival in the USDs prospects is possible.
Should only thrive if risk sentiment is weak look for
aggressively dovish ECB on any strong resurgence in the
euro and traders may look to trade accordingly (fading
strength)
Could the Bank of Japan return to the QE trough once
again on admission that inflation forecasts have been
hopelessly optimistic and low commodities ease the risks
of a weaker JPY on wages?

GBP

Defaulting to a low beta version of the USD outlook

more downside than upside potential in GBPUSD as the
quarter wears on.

CHF

The Q3 experience proved that CHF is no longer a safe haven expecting further weakness against both EUR and
eventually against the USD.

AUD

Exposure to China likely to remain a focus, so expect a relatively low ceiling for any rally attempts.

CAD

NZD

Canada will hope that the US economic resurgence is

sufficiently strong to keep Canadas recession risk at bay.
Looking for outperformance among the commodity dollars.
More downside risks ahead as rates have pushed to new
lows for the cycle and the previous years of NZD strength
have only been partially unwound.

SEK

Double top in EURSEK as SEK made a comeback from the

lows, but any further SEK strengthening will be leaned on
by the Riksbank, so no fireworks expected.

NOK

Has been excessively beaten down in places especially

against commodity currency peers, but comeback process could prove slow as oil is unlikely to launch a major
new rally unless there is an unanticipated geopolitical
disruption.

MXN: The Mexican peso is the baby that has been thrown
out with the bathwater among EM currencies. As it is one of
the most liquid EM currencies, it is likely often traded as an EM
proxy has been excessively beaten down among its EM peers,
and is primed for #SaxoStrats.
If we see any comeback in EM in Q4, MXN will likely participate
strongly. Among the positives for Mexico is the structural situation, as the current account has not deteriorated beyond a
modest deficit despite the oil price drop. As well, 67% of

Follow us:

TF

Click to read more from John J. Hardy

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Mexican exports are into the strengthening US economy, Mexican real rates are edging into positive territory as inflation eases despite the weak currency of late, and the central bank may eventually hike rates in line with the Fed to support further MXN strength.

Poland - PLN
The last few years have shown us that the link between CEE currency performance and general
EM performance is far weaker than it used to be, as the world sees the big three among the CEE
currencies PLN, CZK and HUF to one degree or another as a convergence trade with the euro.
Polands economic fundamentals look solid heading into Q4, the country maintains a large and
unthreatened pile of reserves, and Poland offers positive real rates with a 1.50% central bank
rate and slightly negative inflation. EURPLN could return back to the 4.00 level over the next
few months as the euro carry trade makes a comeback after a possible hiccup or two.

trading

looks attractive

EURUSD is trading lower again after

remarks from Fed chair Janet Yellen.
Read more...

Much depends on the Fed of course, but

a three-month view offers a reasonable
expectation that EURUSD will return to
the 1.1000 zone.

Follow us:

So pairing long EM trades against the euro and especially the offshore yuan (CNH) are one way
to trade an emerging market resurgence, though it could be one of relatively short duration.

Most trade flows in MXN are against the USD and most PLN trading is against the euro, so short
USDMXN and short EURPLN are certainly one way to look for MXN and PLN appreciation going
forward. However, there are two possible twists we can add to any long EM trades by pairing
both of these trades against the euro and the Chinese offshore yuan (CNH).

Homing in on long-dated EURUSD

Put ahead of FOMC

CEE Feature

As well, while China has mobilised significant firepower to counter a rapid weakening of the yuan in the wake of its steep devaluation on August 11. That and the move to a theoretical
managed float regime points to a weaker currency that should see Chinas currency mean reverting with its EM peers to a significant degree in coming quarters.

EM against what?

Shorting the EURUSD

Equities

First and foremost, an environment of strengthening emerging markets is likely also a positive
environment for carry trades, with the euro in the crosshairs if risk appetite makes a comeback
in Q4 (as we have the argument that the Fed will remain extremely cautious in withdrawing accommodation, while the ECB will stay the course or even signal more easing if inflation doesnt
pick up soon).

The one risk is a political one in Poland, as a possible new law-and-justice government after the
October 25 general election could force Polish banks to take a loss on remaining CHF-denominated mortgages, though this should prove a one-off, modest adjustment.

EM currencies with a twist:

Asia-Pacific

We will shine the spotlight

on the Mexican peso and Polish
zloty as our choices for
a comeback in Q4.

Long USD calls for

#SaxoStrats

greenback bulls

The USD may have sold off a bit on the

back of the FOMC minutes, but a closer
look suggests its weakness against the
EUR and CHF may be temporary.

Were showcasing just a taste of our

#SaxoStrats. Link through to more views
from the team.

FOLLOW
Read more...

Read more...

Q4

This Quarter

Commodities

Macro

Fear
factor
Bonds
by Simon Fasdal
Head of Fixed Income Trading

As predicted, fear infected the markets during Q3 and remains a force

to be reckoned with as we stand on
the cusp of Q4. But make no mistake, this is also the flux point where
opportunity begins to knock.

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Q4

This Quarter

Commodities

Clearer picture
Our view at the cusp of Q3 was that we could see a buildup of
excessive fear, geopolitical risk factors and less risk appetite,
especially for emerging market bonds. We highlighted that
investors could exploit this excessive fear at a given point
probably after the first US rate hike.
Indeed, markets have entered a mode of fear, igniting a broad
based risk-off sentiment for emerging markets over the last
three months for stocks, bonds and especially currencies.
There is indeed cause for concern; financial imbalances are
present, the many years of a low-yield environment has fed
the most popular acronyms for EM BRICS, MINTS or Next 11
with substantial inbound capital flows, fuelling multi-year
growth parties in most of the these countries.
And then at some point the party is over. The ordinary resumes and for EM one saying is particularly apt: The dimming
of the light makes the picture clearer. Double-digit growth
rates have disappeared and been replaced by the anaemic
growth rates mostly seen in the Eurozone for a decade. The
focus is back on governments, and promises versus reality.

Opportunity knocks
Against this backdrop, it is easy to see why EM have been under severe pressure, and also why the media has made such an
issue of their predicament. Indeed, this media focus has sent
emerging market bond yields into high orbit, way above the
general low-yield environment.

Macro

Forex

Bonds

Asia-Pacific

on the back of substantial quantitative easing to levels where it is

questionable if the risk premium expresses the entire risk.
To view this in a measurable way, a sample of USD-denominated emerging market bonds has a high premium per risk unit
compared to peers. This risk is there for a reason, of course. A
combination of sluggish growth and bad politics hits not only
the government bonds, but a spillover to corporate bonds in
such countries is also typical. In many cases this spillover is unjustified and investors can find opportunities when they pinpoint such discrepancies.
Second, the lack of growth is playing too big a factor. The very
high growth rates we have seen in EM are unsustainable and
gravity defying in the long run. The whole idea with emerging
markets is their emerging into more developed economies.
When these markets eventually do evolve we will see growth
levels more aligned to developed economies. At present, several EM countries are troubled by negative or close to negative growth (Russia and Brazil for instance), but it is not a given
that things stay this way.
Third, the EM fear over lower commodity prices is exaggerated. Besides Russia, Venezuela, and Nigeria, which have government spending hugely dependent on a high oil price, most
EM countries are less vulnerable to oil price drops than the
present fear expresses. These other EM countries are normally
more dependent on other commodity prices (for instance iron
ore in the case of Brazil) that often have a less dramatic impact
on the overall economy than sudden oil price drops.

But we have several reasons to believe that this is where we

believe the road to opportunity begins.

Finally, the EM difficulties are linked to the fear of higher yields

ignited by a quite aggressive series of rate hikes by the US Federal Reserve.

First of all, the overall rotation away from emerging- market

assets has increased the yield difference between developed
markets and emerging markets significantly. In general, we find
emerging market bonds (both government and corporates)
trading at better risk/rewards than compared to their developed
market counterparts. Especially when considering previous higher-yielding segments of US and Europe, which have contracted

As you read these lines, I think the market is slowly realising

that the Fed would have hiked in September if there were any
reason to hike, and it did not. In our view, every Fed action
from here will be light and shallow, and with a good chance of
postponement way into 2016. In that case the overall emerging market risk premium related to Fed action will have to be
repriced lower.

Equities

CEE Feature

Follow us:

Double-digit
growth rates have
disappeared and
been replaced by
the anaemic growth
rates mostly seen in
the Eurozone for a
decade. The focus
is back on governments, and promises
versus reality..

TF

Click to read more from Simon Fasdal

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

#SaxoStrats

on TradingFloor.com
UPDATE: Staying positive on
Banco do Brasil

Bullish on Europcar sharing programme

Political speculation and a downgrade may have

seen Brazilian bonds take a nasty tumble, but we
think the longer term fundamentals remain strong.

We are launching a new bond trade view on the

new EUROPCAR bond (Europcar 2022). This is a medium-risk play on a positive course following the
companys successful IPO earlier this year.

Read more...

Read more...

#SaxoStrats
Were showcasing just a taste of our #SaxoStrats.
Link through to more views from the team.
Streaming opportunities from our team of experts.
All trades include entry, stop, target and timing.
Your Next Trade.

FOLLOW

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Dark
horse
Asia-Pacific
by Kay Van-Petersen
Asia Macro Strategist

The cheap money that came out of

the Feds quantitative easing, as well
as Chinas massive stimulus during
the financial crisis has inflated assets
heavily. Global growth is decelerating, commodities have yet to find a
floor, and EM assets have yet to catch
up with the continuing deterioration
of macro fundamentals.

Q4

This Quarter

Commodities

Macro

Forex

Bonds

Asia-Pacific

While some respected peers as well as others in the market

feel that the selloff in emerging markets (is overdone and we
have seen the lows, I beg to differ. I think there is a lot more
downside to come, with things set to get worse before we see
light at the end of the tunnel.

The structural EM currency devaluation, continued commodity bear market conditions and the global slowdown are likely to
catch up with EM equities and bonds. At the same time, I believe
developed markets will outperform emerging markets over the
next few quarters, perhaps even for a year down the line.

So, while it may seem crazy to be still bearish at one-year lows,

I feel investors and traders should be looking back to 2008 levels. EM equities and bonds have lagged the clear signs of stress
seen in their currencies, and EM market PMIs are trending lower
with their biggest trading partner, China, needing to enter a
phase of quality yet slower growth, a natural evolution.

So a portfolio that is structurally short EM versus structurally long developed markets on the equity side resonates well
with me. As postulated many times before, I would expect
more easing from the European Central Bank and the Bank of
Japan, with Fed crab walking and befuddlement only increasing the pressure on the Eurozone and Japan.

Although the Federal Reserve did not hike rates, it seems not
only to be in search of a unicorn, but also to have taken on an
additional mandate for global financial stability with oversight
of the EMs and China, and the USD will still be the proverbial
one-eyed emperor in the kingdom of the blind, because the
rest of the world is easing.

Key risks to this view are: Big stimulus from China that leads to
sustainable commodity demand, easing from the Fed, global
growth picking up dramatically, a big USD selloff that supports
commodities and emerging markets through Q4.

My thesis is simple: much of the cheap money that came out

of the Feds three rounds of quantitative easing, as well as
Chinas massive stimulus during the global financial crisis has
inflated assets heavily across the globe. Global growth is decelerating, commodities have yet to find a floor, and EM assets
(bonds and equities) have yet to catch up with the continuing
deterioration of macro fundamentals.
Although not all EMs are created equal, some will outperform
on a relative basis: the Philippines, India and Mexico. I remain
quite bearish on Malaysia the perfect poster child for an EM
meltdown as well as Turkey, South Africa, Indonesia, and
Thailand to name a few.
The best way to express views on these is through US-listed,
USD-denominated exchange-traded funds and through long
put options. These enable investors to limit their downside exposure, manage the volatility in their portfolios and provide a
more prudent type of leverage if things go right.

While it may seem

crazy to be still
bearish at one-year
lows, I feel investors
and traders should
be looking back to
2008 levels.
TF

Click to read more from Kay Van-Petersen

Equities

CEE Feature

Follow us:

From Q4 into 2016, #SaxoStrats

ideas

Structural shorts on EM and related global slowdown

EEM: Main EM ETF for those not wanting to play through long
options. One can go long EUM, which is the inverse of EEM.
EBM: One of the main EM USD-denominated bond ETFs. I expect a lot more downgrades.
EWM (Malaysia): The EM crisis poster child, Malaysia has:
1. heavy USD debt;
2. heavy foreign bond and equity ownership;
3. a position as a net exporter of commodities;
4. China as its second biggest trading partner after Singapore, which is also in a slowdown;
5. gargantuan corruption problems and political tensions
that are set to accelerate; 6) mismanaged government.
EWY (South Korea): Rallied the most since the August selloff.
Korea is in a multi-year structural competitive battle with Japan. Its biggest trading partner, China (more than 25% of exports), is now into structural yuan devaluation, and the Korean
economy is highly sensitive to global growth.
TUR (Turkey): Turkish politics are sliding backwards and the
country is now alienating its US allies.
RSX (Russia): Still subject to sanctions over the crisis in Ukraine.
Prices of Russias oil exports look likely to stay low for longer,
and the political and domestic environment remains dismal.
Structural longs on developed markets and further easing
Long South African equities and bonds as well as Japanese
equities on the back of further expected easing from their respective central banks.

Click to see the charts in full size

Q4

This Quarter

Commodities

Macro

Wake-up
call
Equities
by Peter Garnry
Head of Equity Strategy

The third quarter of 2015 will be remembered as the big wake-up call
as global equities spun into their
most violent period, measured by
the first and second derivative of
volatility, since the 2008 financial
crisis. Developed-market equities
are down 6.2% for the quarter but
emerging-market stocks are brutally down 16.2%.

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Q4

This Quarter

Commodities

In hindsight, it is clear that a correction was due as developed equity markets were becoming decoupled despite many
warning signals from the stunning slowdown in China, recession in Brazil, Brent crude sliding another 25% all leading
indicators pointing down across the world and to higher USD
rates on the horizon.
It was likely a raft of Chinese macro data that suddenly triggered
selling in developed-market equities, hauling them below certain
threshold values and adding just enough volatility to kick start an
unprecedented selloff across all major asset classes. The downward pressure on stock prices was amplified, our research
shows, by extensive deleveraging by risk parity funds, commodity trading advisor and managed funds.
Risk parity funds target annualised volatility of 10%. When
their overweight in fixed-income assets collides with elevated
volatility across all asset classes, the only way to target 10%
volatility is to lower the leverage.
When that happens, chaos reigns for a while until order
emerges again, and risk parity funds have by now covered
around 40% of the 8.8% third-quarter drawdown.

The Federal Reserve: how much, how fast?

Higher USD rates are on the way for the global economy as
the US needs higher interest rates. That is clear from data
showing US job openings at their highest since 2000, unemployment down to 5.1%, signs of wage pressure in various industries, and a positive impulse to household spending from
lower energy costs.
The big questions for equity investors are: how much and how
fast the Federal Reserve will deliver tightening? The answers
to both questions will mould a certain trajectory with implications for equity valuation and performance.
Research shows that equity markets are normally less volatile
after a Fed rate hike, but then again we have never experi-

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

enced a Fed rate rise from near 0%. In its latest economic projections, the Federal Open Market Committee forecasts the
long-run Fed Funds Rate to be around 3.75%, compared with
5.25% in the previous expansion before the financial crisis.
The mid-point forecast for the end of 2017 is 3%.
The expected new normal for the Fed Funds Rate will likely
drive equity valuations to levels above their historical average.
The reason is that, while the new normal reflects lower bond
yields, lower inflation and lower economic growth, relatively
will see investors demand more equities and fewer bonds in
this low-yield environment.
Despite our view that US equities are a bit expensive relative
to stocks the world over, their earnings yield is still impressively 5.8%, against 5.3% in BAA-rated corporate bonds and 2.2%
in US 10-year Treasuries.

Emerging markets a bargain

The global rout in equities has turned certain regions and
countries into bargain plays. German equities are now trading
at 13.1x forward P/E. putting them at a 13% discount to UK
and French stocks. This does not reflect the earnings power of
German companies in relative or absolute terms.
Emerging-market equities trade at 11.6x forward P/E which is
unusually low and, in our view, does not reflect long-run expected earnings growth.
Frontier markets are also trading at large discounts to emerging and developed-market equities which does not reflect
their enormous long-run potential.
Given the current outlook for energy and mining, Canadian
and Australian stocks look expensive. US equities are also on
the dear side, while Japanese equities look cheap largely because of the weak yen. Taking valuations and the recent drops
in equities into consideration, we are betting on emerging
markets to outperform all other markets over the coming year.

Taking valuations
and the recent
drops in equities into
consideration, we
are betting on
emerging markets to
outperform all
other markets over
the coming year.

Q4

This Quarter

Commodities

Many analyses
conclude that the
previous boom in
emerging markets
was only driven by
the super-cycle in
commodities.
TF

Macro

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Emerging markets will recover

How to play equity markets

In classic Wall Street fashion, the plunge in emerging-market

equities and especially Chinas extreme volatility have caused
many global investors to pull out, turning almost everyone into bears.

The #SaxoStrats we send out to clients are not meant only to

provide inspiration but to be part of a real portfolio approach.
All ideas are driven by our views, but they also shape the current portfolio composition, and all positions are added to our
account so we can track performance.

Many analyses conclude that the previous boom in emerging

markets was only driven by the super-cycle in commodities.
So, with commodities now at their lowest levels since 1999,
the outlook for emerging markets is gloomy.
In our view, this underestimates the strong underlying forces
in many emerging markets that are transforming themselves
from pure export-driven and commodity producers into more
balanced economies with more growth coming from domestic
consumption as the middle class grows.
The transition is already happening, and capital will flow back
into emerging markets as soon as there is clarity over the trajectory of US rates.

All positions are set up with trailing stops and no targets. We

never risk more than 1% of our equity on each trade. Because
we have a trailing stop it is rare that we lose all 1%. The portfolio currently has gross exposure of 221% and net exposure of
62%, which we believe is an appropriate level of risk going into
Q4 as volatility is likely to stay higher than in the recent past.
We net short energy (Repsol) and mining (Randgold). For all
other sectors we have a net exposure close to zero or positive. The portfolio is long Apple, BMW, Banco Santander, Biogen, Gilead Sciences, Novo Nordisk, GoPro, MSCI China and US
homebuilders to name a few.
The portfolio has 32 positions. It is also short 3D Systems, Alexion
Pharmaceuticals, Citigroup, E.ON, France, Genmab and Novartis.

Click to read more from Peter Garnry

#SaxoStrats on TradingFloor.com

Click to see the charts in full size

Glencore gloom

Insurance as a fast

is excessive

growing industry

We are reversing our previous stance

on Glencore as the recent decline from
148 to just above 100 is now finally
pricing in a scenario which we find very
unlikely namely asset liquidation and
global recession.
Read more...

Sanlams share price drop is an attractive opportunity to add exposure to the

South African insurance company.
Read more...

#SaxoStrats
Streaming opportunities from our team
of experts.
Were showcasing just a taste of our
#SaxoStrats. Link through to more views
from the team.

FOLLOW

Q4

This Quarter

Commodities

Macro

And it
snowed
CEE Feature
by Kirill Samyshkin
Sales Trader, Client Trading Services CEE

So, the Grand Finale has been postponed. Despite Fed officials have
been repeatedly announcing the
end of the Belle poque of unprecedented cheap money in the 2nd
half of 2015, unexpectedly dovish
rhetoric after Septembers non-hike
decision offered more uncertainty
for market participants than before
the FOMC meeting.

Forex

Bonds

Asia-Pacific

Equities

CEE Feature

Follow us:

Q4

This Quarter

Commodities

So, the Grand Finale has been postponed. Despite Fed officials
have been repeatedly announcing the end of the Belle poque
of unprecedented cheap money in the 2nd half of 2015, unexpectedly dovish rhetoric after Septembers non-hike decision
offered more uncertainty for market participants than before
the FOMC meeting.
But let us focus on Russia and its economy in those rapidly
changing circumstances.

The credit function of national reserves

The deficit in the foreign borrowing and deadlines for corporates
foreign debts pushed Central Bank of Russia into offering widescale weekly to yearly foreign currency repos. Thereby, domestic
borrowing circuit has been locked up on national reserves.
The national currency offered at high rates and foreign currencies offered via repos at low rates created a circle, in which artificial demand for rubles from banks and exporters kept RUB exchange rate from further devaluation. At the mean time Central
Bank was buying dollars and euros from the market, replenishing its reserves, and overall making it a Russian version of global
extend-and-pretend game.
In substance, domestic entities were given renewable source of
liquidity, renewable but not endless. The limit was set at USD
50b, so by June, when currency repos peaked to USD 35b - CBR
had to suspend yearly repos maintaining only short-term auctions. Considering Q4 will bring another set of deadlines for
foreign debts payouts, totaling to nearly USD 35.5b, and in particular - USD 22b in December, demand for foreign currency is
expected to rise, so the limit remains a concern.

Correlation restored?

Macro

Forex

Bonds

Asia-Pacific

already in place, will most likely react as it did before. Repetition is the mother of learning says the Russian proverb.
The combination of old examined measures - key interest
rate hike and currency repos offering, will keep RUB from
drastic depreciation. This may not break the correlation, but
certainly decrease the Delta.
Scenario 2.: Oil prices remain flat. Ruble is flat.
Scenario 3.: Oil prices go up. National currency will naturally start to revaluate, but neither the regulator, facing the
budget deficit, especially in regions, nor exporters, gaining
from cheaper internal expenses, would be interested in Ruble gaining the strength. CBR will most likely use the opportunity to refill its foreign currency reserves, buying dollars
and euros from the open market. The correlation again may
not be broken, but Delta will be lowered.

In substance,
domestic entities
were given
renewable source of
liquidity, renewable
but not endless.

Equities

CEE Feature

Follow us:

Earning on the constanta

Shall the hypothesis be correct, the formula above contains one
Variable Crude Oil prices, and one Constanta or at least lesser
Variable RUB.
Long RUB positions against USD are subject of positive tom/
next financing, due to the essential differential in respective interbank interest rates.
Given the historic swap points above, only 2 weeks of USDRUB
Short position would bring us 26.2 kopecks per dollar in the
swaps, which is circa 9,5% per annum, not taking into effect the
compounding. To arbitrage the income from such financing, we
would require a hedge with the negative exposure to oil.
According to my calculations, the existing USDRUB to Crude Oil
delta during the year from Q4.14 to Q4.15 was roughly equal to
0.7 in average. Concerning we expect delta to decrease from the
Regulators actions, we may assume taking 0.5 notional amount
of short USDRUB short position as negative exposure to oil.

The strategy in proportion

Sell 1 LCOF6 at current level (49.6)
Sell 100k USDRUB at current level (65.6)
Time Horizon:
Future expiry - 16-Dec-2015
Parameters:
We expect to gain around 1.4 Rubles to our opening price in
the swap with USD upside risks hedged by the short exposure
in LCO Contract.
Management and risk description:
The risk here is rollover costs for unrealized losses on USDRUB
position (if any) exceeding the Tom/Next. We close positions,
should LCOc1/USDRUB Ratio decline from current 0.723 to 0.5.

Speaking of RUB crosses, despite geopolitical premium is still of

a decent influence, the correlation of ruble vs oil prices looks restored. But how long will it last?
There are 3 basic scenarios in the model I am going to propose
onwards, based on the dynamics of oil prices: down, flat or up.
Scenario 1.: Oil prices continue to slide. Ruble will naturally
start to decrease in value, but CBR, considering devaluation

TF
Click to see the charts in full size

Click to read more from Kirill Samyshkin

NON-INDEPENDENT INVESTMENT RESEARCH DISCLAIMER

This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research.
Further it is not subject to any prohibition on dealing ahead of the dissemination of investment
research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold
long or short positions in, or otherwise be interested in the investments (including derivatives),
of any issuer mentioned herein. None of the information contained herein constitutes an offer
(or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make
any investment, or to participate in any particular trading strategy.
This material is produced for marketing and/or informational purposes only and Saxo Bank
A/S and its owners, subsidiaries and affiliates whether acting directly or through branch offices
(Saxo Bank) make no representation or warranty, and assume no liability, for the accuracy or
completeness of the information provided herein.
In providing this material Saxo Bank has not taken into account any particular recipients investment objectives, special investment goals, financial situation, and specific needs and demands
and nothing herein is intended as a recommendation for any recipient to invest or divest in a
particular manner and Saxo Bank assumes no liability for any recipient sustaining a loss from
trading in accordance with a perceived recommendation.
All investments entail a risk and may result in both profits and losses. In particular investments
in leveraged products, such as but not limited to foreign exchange, derivates and commodities
can be very speculative and profits and losses may fluctuate both violently and rapidly.
Speculative trading is not suitable for all investors and all recipients should carefully consider their financial situation and consult financial advisor(s) in order to understand the risks involved and ensure
the suitability of the situation prior to making any investment, divestment or entering into any transaction. Any mentioning herein, if any, of any risk may not be, and should not be considered to
be, neither a comprehensive disclosure or risks nor a comprehensive description such risks.

Any expression of opinion may be personal to the author and may not reflect the opinion of Saxo
Bank and all expressions of opinion are subject to change without notice (neither prior nor subsequent).
This communication refers to past performance. Past performance is not a reliable indicator of
future performance. Indications of past performance displayed on this communication will not
necessarily be repeated in the future.
No representation is being made that any investment will or is likely to achieve profits or losses
similar to those achieved in the past, or that significant losses will be avoided.
Statements contained on this communication that are not historical facts and which may be simulated past performance or future performance data are based on current expectations, estimates, projections, opinions and beliefs of the Saxo Bank Group. Such statements involve known
and unknown risks, uncertainties and other factors, and undue reliance should not be placed
thereon.
Additionally, this communication may contain forward-looking statements. Actual events or
results or actual performance may differ materially from those reflected or contemplated in such
forward-looking statements. This material is confidential and should not be copied, distributed,
published or reproduced in whole or in part or disclosed by recipients to any other person.
Any information or opinions in this material are not intended for distribution to, or use by, any
person in any jurisdiction or country where such distribution or use would be unlawful. The information in this document is not directed at or intended for US Persons within the meaning of
the United States Securities Act of 1993, as amended and the United States Securities Exchange
Act of 1934, as amended.

This disclaimer is subject to Saxo Banks Full Disclaimer available at www.saxobank.com/disclaimer

Saxo Bank A/S Philip Heymans All 15 2900 Hellerup Denmark Telephone: +45 39 77 40 00 www.saxobank.com
Saxo Bank A/S CEE Agias Fylaxeos 1, 1st Floor, 3025 Limassol, Cyprus cy.saxobank.com