db house view

Research Deutsche Bank

17 March 2014

DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013.

Deutsche Bank Research The House View

Deutsche Bank Research Research The House View – 17 March 2014, [email protected], +44 207 545 8465

The House View – 17 March 2014

Three factors have clouded the outlook for the global economy in recent weeks: a run of mixed global

economic data, renewed concern over fragilities in China’s financial system, and a sharp rise in geopolitical

tensions between the West and Russia over Ukraine. All have weighed on risk assets

Mixed global economic data was in part down to one-off factors such as the Chinese New Year and extremely

cold US weather. While this has led to a modest reduction in our global growth outlook, the underlying

momentum of the world economy remains strong and an acceleration can be expected over the coming months

In China, weaker data and the country’s first ever onshore domestic bond default have spurred growing fears

that the rapid rise of credit in recent years will turn into a full-blown financial crisis. We think these concerns are

overdone and that China has sufficient policy flexibility and control over credit flow to prevent an economic

‘hard landing’

In Ukraine we see little chance of a military confrontation but expect prolonged diplomatic maneuvering that

could drag on for years. Tit-for-tat economic sanctions between the West and Russia are a risk, but not our

base case, and we expect the market impact to remain mostly concentrated on Russia and Ukraine assets.

Beyond these, EM assets should continue to see differentiation based on fundamentals

The evolution of the three above factors will be closely tracked by markets. Beyond any near-term volatility, we

maintain our long-term views. Equities remain attractive, bonds look expensive and the US recovery will see

earlier and faster rate hikes than the market currently expects, supporting dollar strength

David Folkerts-Landau, Group Chief Economist

The views in this publication are informed by Deutsche Bank’s Global Strategy Group, which advises management and

clients on broad market risks and global economic and financial developments. The views and forecasts of the group, which

consists of senior research staff, may occasionally differ from those disseminated by their research colleagues

Editors: Raj Hindocha, Marcos

Arana, Wolf von Rotberg, Sahil

Mahtani, Erin Urquhart

2


We continue to expect growth to accelerate throughout 2014. Mixed data in the US and China is temporary in our view

Fed: gradual taper and end of QE by end-2014; do not

expect deviation from taper path despite mixed data.

Expect policy shift in H2 with signal of faster rate hikes

ECB: on hold as inflation is bottoming. Further easing

(e.g., QE) possible if inflation stays low, growth is weak,

euro strengthens further

BoJ: further easing in H2 only if warranted by data

BoE: on hold, no rate hikes even if u/e continues to fall

PBoC: on hold. No tightening, given inflation is low

EM: mostly on hold, with tightening bias to respond to

FX pressure if needed

Disorderly market sell-off : repricing of monetary policy

expectations stokes market volatility

China crisis: financial crisis / hard landing as China

attempts to rebalance its economy

Geopolitical risk: West / Russia escalation, e.g., tit-for-

tat economic sanctions

Crisis in EM: increase in capital outflows amid

continued turmoil or China slowdown hurts EM growth

Deflation risk: slowdown in US or Eurozone growth,

China RMB devaluation results in import disinflation

Bullish view on global growth of 3.5% in 2014, 3.9% in

2015 – with growth accelerating from 2.8% in 2013

US growth of 3.2% in 2014, 3.8% in 2015. View above

consensus on labour market recovery, lower fiscal

drag, stronger capex and residential investment growth

Eurozone growth of 1.1% in 2014, 1.4% in 2015, as

consensus. Recovery on track, with growth supported

by domestic demand, export traction, lower fiscal drag

EM growth of 5.1% in 2014 and 5.4% in 2015. Expect

cyclical recovery to be supported by exports to DM as

US, Europe economies accelerate

US, China data have been mixed, not weak in recent months. We expect this to be temporary, with growth accelerating in the coming quarters

Monetary policy to remain broadly supportive. Major CBs to add nearly USD 1tn extra liquidity in 2014. More policy differentiation with Fed ending QE as first step towards rate hikes while ECB, BoJ on hold / easing

No crisis in EM despite tensions in Ukraine and other well-known weak countries. No material spillover, markets to differentiate between ‘good EM’ & ‘bad EM’

Views on key themes

Economic outlook Central bank watch

Key risks to our view

3 Note: H / M / L indicates estimated probability of risk (High, Medium, Low).

M

L

M

M

M


Downside risks

Disorderly market sell-off : stronger growth prompts pricing of

earlier / faster rate hikes and stokes market volatility

China crisis: financial crisis / hard landing as China attempts to

rebalance its economy

Geopolitical risk: West / Russia escalation, e.g., tit-for-tat economic

sanctions

Crisis in EM: increase in capital outflows amid continued turmoil or

China slowdown hurts EM growth

Deflation risk: slowdown in US or Eurozone growth, China RMB

devaluation results in import disinflation

Crisis returns to Europe: slowing reform momentum undermines

potential growth, AQR impedes credit provision to the real

economy; rise of fringe parties in the May European elections

Upside risks

Global growth upside surprise: lower fiscal drag in the US and

Europe, incident-free elections across EM, effective policy stimulus

in Japan support faster-than-expected global growth

Lower oil price boosts growth: geopolitical calm and stronger

supply see oil prices stabilise ~10-15% lower than current prices

Tail risks

Geopolitical tensions escalate and push up oil prices and /or slow

economic activity, e.g., escalation of Syria conflict

While the risk of a global growth slowdown or EM crisis have risen marginally, falling bond yields have been supportive

Se

ve

re

Sig

nific

an

t M

od

era

te

Lo

ca

lise

d

Low Medium High Tail Risk

Unpredictable

The House View - Risk Matrix

Probability

Imp

act o

n o

ur

ba

se

ca

se

1

2

3

4

5

9

6

1

2

5

4

6

8

7

9

7

2

* Moves represent change in risk outlook over previous month

4

3

3

8


2014 so far has seen broad dispersion within and between asset classes. Gold, peripheral equities and bonds have outperformed

15.8

8.6

3.3

1.1 0.3

-0.6 -1.0 -1.9

-4.6 -5.6 -5.8

-9.0 -11.8

2.6 2.4

2.1

5.0 4.4

2.7 2.6 1.9 1.5

6.9

3.4

1.3

0.9

0.6 0.4 0.0

-0.5

-2.5

-3.8

-10.1 -11.6

8.8

1.4

-3.1

-12.0

-20

-15

-10

-5

0

5

10

15

Gre

ece A

thex

Italy

MIB

Ind

ia N

ifty

Spain

IB

EX

35

US

S&

P 5

00

Euro

pe S

toxx 6

00

Fre

nchC

AC

40

UK

FT

SE

100

Shanghai C

om

posite

Germ

an D

AX

30

MS

CI E

M

Japan N

ikkei

Bra

zil

Bovespa

US

IG

EU

IG

US

Hig

h Y

ield

Spain

Italy

Germ

any

UK

US

EM

IDR

JP

Y

AU

D

EU

R

INR

GB

P

BR

L

Dolla

r In

dex

ZA

R

TR

Y

RU

B

UA

H

Gold

Silv

er

Com

modity Index

Bre

nt O

il

Copper

Total returns 2014 YTD

Equities Commodities FX Sovereign

debt Corporate

Credit

%

13.6

5

3 93 165 93 201 146 106 127 2 146 122 127 22 56 49 125 27 27 23 24 16 78 6 -4 41 10 -16 18 1 -10 -3 -20 -2 -16 46 58 44 139 78

Return since

crisis low

9 March 2009

(%)

Note: Total return accounts for both income (interest or dividends) and capital appreciation.

Source: Bloomberg Finance LP, Deutsche Bank Research. Prices as of 10 Mar 2014, COB


US: Data firmed after weather-related weakness

− Payrolls recovered to +175k in February after a

sharp drop in January

− Maintain our 3%+ GDP forecast for 2014

Europe: Strong PMIs driven by Germany and Italy

− Eurozone composite PMI at highest since 2011

− Germany 2015 GDP growth upgraded to 2%

from 1.4%

China: Weak data due to Chinese New Year

− Manufacturing PMI dropped to 48.5 in February,

the weakest in 6 months

− Q1 growth could surprise to the downside but

underlying momentum remains intact

6

Despite weather-related weakness in Q1, the global economy remains healthy and should accelerate over the coming months

0 1 2 3 4 5 6 7 8 9

10

Eurozone US China

Q1 2014 Q2 2014 Q3 2014 Q4 2014

Source: Haver Analytics, Bloomberg Finance LP, Deutsche Bank Research

We expect growth to accelerate over the course of 2014

% qoq, saar

Weak data suggests China Q1

growth could surprise to the downside

45

50

55

60

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

Eurozone China US

Composite PMI: Eurozone recovery in full swing while the expansion

in the US and China has decelerated over the last few months

Source: Haver Analytics, Deutsche Bank Research

Index

Positive momentum

in Europe, negative

in US and China


US macro data have been mixed over recent

months, in part due to very cold weather

− Weakening ISM series, soft retail sales

− Several weak housing indicators, notably

housing starts, existing home sales

− Soft payrolls, though rebounded in February

− Meanwhile, consumer confidence remains high,

inflation is turning

No reason for alarm yet – Q1 was expected to be

relatively weaker inventory due to destocking

We remain confident in the US recovery and expect

an acceleration in growth over the coming months

− End of Q1 inventory destocking

− Positive payback after weather-related

weakness

− Underlying fundamentals intact, e.g., firming

labour market, healthier household balance

sheets, housing recovery, lower fiscal drag

7

Mixed data have raised concerns over the US economy, but the recovery remains intact and we expect growth to accelerate

-2%

0%

2%

4%

6%

8%

2010 2011 2012 2013 2014 Source: Bloomberg Finance LP, Deutsche Bank Research

Mixed data, e.g., retail sales softness have raised concerns over the

health of the US economy

qoq saar

-0.5

0.0

0.5

2011 2012 2013 2014 Source: Bloomberg Finance LP, Deutsche Bank Research

US macro surprise index: US data continue to surprise to the

downside, but the trend is improving

Macro surprise index


Despite mixed signals in recent months, the labour

market recovery is real

− In February, payrolls at 175k (6m, 12m averages

also at ~175k), unemployment at 6.7%

− Wage inflation is firmly trending up, suggesting

less ‘spare capacity’ in the labour market

If this trend continues, unemployment could be

close to equilibrium (5.5-5.75%) by end-2015

In normal times, Fed policy rate would need to be

close to neutral (3.5-4%) at that point

− We can expect the Fed to allow lower rates this

time around to sustain the recovery – but not as

low as current Fed forecasts or market pricing

We expect the labour market improvement and

rising inflation will lead the Fed to signal earlier and

faster rate hikes

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1986 1990 1994 1998 2002 2006 2010 2014

Average hourly earnings (total private industries): US wages are

trending up – pointing to a firmer job market than anticipated

Source: BLS, Haver Analytics, Deutsche Bank Research. Note: grey areas denote recessions

% yoy Wages are

trending up,

and once wage

inflation takes

hold it

continues for 4-

5 years

8

Labour market improvement and resulting wage inflation should lead the Fed to signal a change in policy in H2

8

-10

-5

0

5

10

15

20

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Increase Employment

Raise Worker Compensation

Source: NFIB, Haver Analytics, Deutsche Bank Research

% of companies planning to hire and raise wages near 2006 levels

%

Pre-crisis level

What would it take to beget more hawkish Fed forward guidance? 13 Feb 14

http://pull.db-gmresearch.com/p/13413-654F/834159/DB_GEP_2014-03-13_0900b8c088081b55.pdf.


45

50

55

60

45 50 55 60

Composite PMIs: Eurozone economies are expanding and with

positive momentum; France is the notable exception

Prev. 3m avg. Source: Haver Analytics, Deutsche Bank Research

Feb-2014

France

India

Italy Eurozone Spain

Germany UK

Global

Japan

US ISM EM

China Russia

Brazil

Acceleration

Deceleration

Eurozone Non-Eurozone

The Eurozone recovery is on track

− PMIs at 2.5 year highs, suggesting upside

potential to our Q1 growth forecast of 0.2% qoq

…Eurozone Composite PMI at 53.3 is the

highest since Jun-2011

…Region and key economies are accelerating

and in expansion – with France the exception

− Signs of a turnaround in unemployment

− Positive growth in Q4 in the seven largest

countries for the first time since 2011

Deflationary pressures are weakening

− Headline inflation unchanged at 0.8% since Dec

− Core inflation has accelerated to 1% in February

from a low of 0.7% in December

− Number of components with falling prices

declining, potentially marking a turning point

Expect recovery to continue and the ECB to stay on

hold, unless data worsens or if EUR surges further

9

The Eurozone recovery is on track, and inflation shows signs of bottoming – prompting the ECB to stay on hold

Mind the (Structural) gap! 7th Mar 14

-50

-40

-30

-20

-10

0

10

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14

Core Inflation

Number of rising components - falling components (3mma), RHS


Eurozone core inflation has been rising since December while an

increasing number of components show rising prices

% yoy

Potential turning point,

but exposed to

EUR appreciation

http://pull.db-gmresearch.com/p/8526-654A/87404275/DB_FocusEurope_2014-03-07_0900b8c08802d2f1.pdf


Euro strength is among the key risks to the Eurozone recovery, though we see limited further upside to the currency

EURUSD is at its highest in 2.5 years

− +8% vs. USD, +5% trade-weighted since Apr-13

Several factors have acted in support of the euro

− Rising capital inflows as breakup fears have

faded, a stabilising periphery, less attractive EM

− Eurozone current account surplus at record high

− Market no longer expects ECB rate cut

Euro above current levels threatens the recovery

− Sustained euro strength makes exports more

expensive and reduces competitiveness

− “Pain thresholds” differ by country; France, Italy

already exposed at current levels

− As a whole, the Eurozone suffers above

EURUSD of ~1.40

Further upside for the euro is limited

− ECB likely to react if a strong euro increases

deflationary pressure

…Mario Draghi: “[Euro] increasingly relevant in

our assessment of price stability”

− EUR/USD to fall below 1.30 by year-end

1.10

1.20

1.30

1.40

1.50

1.60

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

Horizontal bands denote “pain thresholds” above which euro starts denting growth

Source: Bloomberg Finance LP, Deutsche Bank Research

Sustained euro strength would threaten the recovery; Italian and

French exporters already affected at current levels

Germany

France

Italy

Eurozone

10 Get real on euro - 26th Feb 14

-1%

0%

1%

2%

3%

4%

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14

EURUSD

Basic balance*, RHS

Note: (*) Basic balance = Current Account Balance + Foreign Direct Investment + Portfolio Flows

Source: ECB, Deutsche Bank Research

Portfolio inflows and a current account surplus have supported euro

strength

% of GDP

https://gm.db.com/servlet/ShowContent?ResourceType=S&ServerLocation=1&ResourceId=1723274





Some recent data in Japan have been weak

− Q4 GDP only grew by an annualised 0.7% qoq

− External trade was weak as higher energy

imports turned historic surpluses into deficits

− Domestic spending not picking up as much as

expected ahead of consumption tax increase in

Apr-2014

However, PM Abe’s reflationary policies are working

− After falling for 15 years, prices have stopped

falling and are expected to rise by 1.2% in 2014*

− 2013 trends of a falling yen, rising earnings and

asset prices should continue in 2014

− 5Y inflation expectations are above 2%, from

negative as recently as late 2011

− Impact of the consumption tax rise will be

temporary and growth will recover in 2014

This has important implications for asset prices

− Nikkei to rise to 19,000 by end-2014 (+28%),

with exporters benefiting from a weaker yen

(end-2014 target of 115)

-2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5

2009 2010 2011 2012 2013


However, Abenomics is increasing inflation expectations, as

measured by breakeven rates (5Y bond – 5Y inflation-linked bond)

25

30

35

40

45

50

55

2000 2002 2004 2006 2008 2010 2012 2014

Consumer confidence

Source: Cabinet Office, Deutsche Bank Research. Note: Seasonally adjusted diffusion index

Contrary to expectations, consumer confidence has actually fallen in

recent months

Despite some weak recent data, Abenomics is on track to help Japan shake off two decades of deflation

11

*Excluding consumption tax effect

Abenomics is working...so far 7 Feb 14

http://pull.db-gmresearch.com/p/13273-47C7/26311944/DB_GEP_2014-02-07_0900b8c087df407b.pdf




China is the second largest, and fastest growing

major economy in the world

− China to contribute 1/3 of global 2014-15 growth

Over the last few years, there have been several

false alarms over a hard landing

− A China hard landing (i.e., growth below 6%

yoy) or even growth below consensus (7.5%)

poses substantial risks to the world economy

Concerns are rising again about China’s ability to

sustain its current pace of growth

− Mixed macro data over recent months

− Years of rapid credit growth, especially in the

shadow banking sector, have led to concerns

over NPLs* and defaults

− China’s attempts to rebalance its economy from

an investment- and export-led model, to a

consumption-led growth model could lead to a

structural slowdown

34%

20% 20% 14%

7% 5%

0%

10%

20%

30%

40%

China US EM Asia (Other)

EM LatAm & EMEA

Other DM Eurozone

Note: based on IMF 2010-12 avg. PPP GDP weights. Source: Deutsche Bank Research

China is expected to deliver more than one-third of global growth in

2014 and 2015

% contribution to global growth, 2014-15 avg.

6

7

8

9

10

11

12

13

2010 2011 2012 2013 Source: Haver Analytics, Deutsche Bank Research

China’s growth has slowed-down relative to 2010-11, with many

observers seeing a structural slowdown

% yoy

12

China growth is key to our outlook for 2014-15, but concerns are again rising over the country’s growth prospects

Note: (*) NPL = Non-performing loans


Non-traditional and shadow banking have

contributed to a sharp rise in credit growth

These new forms of lending developed to circum-

vent limitations of the traditional financial system

− PBoC’ limits interest rates on deposits, in order

to channel cheap credit to local governments

and SOEs*

− As a result, savers seeking higher interest rates

and the credit-starved private sector are pushed

outside the traditional banking system via trust

and wealth management products (WMPs)

Sustained levels of credit growth have raised fears

over NPLs, defaults and a systemic financial crisis

− Subsidised loans to the public sector have

financed poor investments, leading to bad debts

− Less regulated trust products, WMPs could lead

to losses, including for retail investors

…Restructuring of a WMP in January

…First-ever corporate bond default in March

0

500

1000

1500

2000

2500

2005 2006 2007 2008 2009 2010 2011 2012 2013

Non-traditional & shadow banking

RMB loans

TSF

TSF = total social financing, a measure of total credit to the economy


China credit flow: years of high credit growth, sustained by rise of

non-traditional lending and shadow banking

CNY bn

(3mma)

Description of key shadow banking products

Wealth

management

products

(WMP)

Widespread savings products for private investors

Offer higher returns than traditional deposits Investors wrongly perceive them as

guaranteed by commercial banks

Trust loans Direct form of financing Offer funding to credit-starved private sector Client funds (wealthy individuals, cash-rich

corporates) used to finance loans to the real economy or invested in financial assets

Also offer higher returns than traditional deposits

13

Rapid credit growth and the rise of shadow banking have raised fears over the health of China’s financial system

Note: (*) SOE = State-owned enterprises


14

In our view these concerns are overdone and we do not expect a systemic credit crisis similar to the US subprime crisis

68%

20%

32%

80%

GDP Bank Credit

Credit-starved private sector to see funding costs come down, as the

subsidy to the public sector gets removed

Private sector

Public sector /

SOEs

Private sector is ~2/3 of GDP, but

receives less 1/5 of credit

Source: Beijing University, CBRC, Hexun, Roadoor.com, Deutsche Bank Research

Further restructurings and defaults in China’s trusts

and WMPs are very likely, and are not unwelcome

as they help prevent speculative flows and credit

But concerns over a credit freeze and systemic

financial crisis are overdone

− Credit fundamentals of trust products are

actually improving – e.g., lower share of risky

borrowers

− PBoC stands ready to inject liquidity if needed

− Financial risks are being addressed by reforms

Authorities are managing an orderly default process

– as investors ‘learn’ to price credit risk, default

recovery ratios will gradually be allowed to fall

While average borrowing costs will rise, only the

less efficient public sector / SOEs will suffer – while

private sector funding costs fall

Reforms should enable sustained credit growth

while improving overall financial stability

Reforms will reduce financial risk and improve financial stability

Municipal bond

market

Channels funding to municipalities other than via riskier LGFVs*

Securitisation of

local SOE

assets

Increases liquidity available to local governments

Reduces funding pressure

Securitisation of

bank assets

Increases transparency, including credit rating by rating agencies

More efficient allocation of risk, as different tranches offer different risk-return profiles

Too much distrust in trust products -17th Feb 14

Note: (*) LGFVs: local government financing vehicles

https://ger.gm.cib.intranet.db.com/ger/document/ShowPdf.eqsr?productIDMore=0900b8c087cec496




Mixed macro data in recent months, e.g., weak

PMIs and IP, have stoked fears of a slowdown

Strong export growth, led by the US and Europe,

will support China’s export-led cyclical recovery

− US-Europe combined to grow at 2.3% in 2014,

up from 0.9% in 2013, providing external traction

− Export growth at 17% qoq in H2 2013; expected

to average 14% yoy for 2014, vs. 8% in 2013

China’s ambitious reform programme will also boost

growth short term, as some reforms get accelerated

− SOE reform and deregulation: opening up of

sectors with massive under-capacity to private

sector will drive investment*

− Financial reform: interest rate liberalisation will

provide cheaper credit to efficient private sector

− Fiscal reform: allowing municipalities to issue

bonds will alleviate funding pressure and help

refinance loans, reducing systemic risk

48

50

52

54

56

58

60

2010 2011 2012 2013 2014

Composite

Manufacturing

Services


China PMIs: momentum has slowed in recent months, even if part of

the weakness can be explained by China New Year and US weather

3 month ma

Loss of momentum,

Manufacturing in

contraction territory

-30

-20

-10

0

10

20

30

40

50

35

40

45

50

55

60

65

2000 2002 2004 2006 2008 2010 2012 2014

PMIs (2Q lead)

Exports (rhs)

Note: PMI is the GDP-weighted new orders index for US ISM and Eurozone PMI


China exports vs. US & Europe PMI new orders: Chinese exports

should remain robust as US, Europe provide external traction

Index %yoy

PMI new orders

suggest export

acceleration over

next 6 months

15

In the near term, export growth and the acceleration of domestic reforms should underpin growth in 2014

China: growth and reform targets for 2014

Note: (*) Overinvestment has disproportionately gone to public-sector related areas, i.e.,

infrastructure or sectors dominated by inefficient SOEs. In contrast, other sectors are materially

underinvested

Asia's export engine revs up - 28 Feb 14

https://ger.gm.cib.intranet.db.com/ger/document/ShowPdf.eqsr?productIDMore=0900b8c088006d7d

http://pull.db-gmresearch.com/p/13284-0E1E/70852402/DB_GEP_2014-02-28_0900b8c087f7322a.pdf





Political risk has also been a

major driver of EM outflows

Can involve political conflict,

violence and economic

mismanagement

Ultimately, however, this is

country-specific

-4

-10 -12 -13

-25 -30

-25

-20

-15

-10

-5

0


Political risk has spurred FX drops in some

major economies since Nov. 2013 (%)

16

EM are faced with a lower growth differential vs. DM, prospects of higher US rates and lower liquidity, and increasing political risk

0

1

2

3

4

5

6

7

1980 1986 1992 1998 2004 2010 2016

G7 EM

Trend GDP growth among EM countries

compared to DM is falling

%

Source: IMF, Deutsche Bank Research

1.5

2.0

2.5

3.0 85

87

89

91

93

95

97 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14

USD/EM Currencies (lhs, inverted)

US 10y Yield (rhs)

Expectations of higher US rates have been a

major driver of outflows from EM*

*JP Morgan EM Currency Index


%

After a decade of rising growth, EM growth is trending lower amid falling reform momentum, exhausted growth models (e.g., dependence on commodities)

At the same time, DM are seeing rising momentum

Therefore, the wider growth differential observed in the previous decade is shrinking

In 2013, the Fed’s taper signal

triggered a re-assessment of EM

valuations and fundamentals

Rising rates meant yield-seeking

in EM assets less attractive

EM Monthly - Limiting Contagion -13th Mar14

http://pull.db-gmresearch.com/p/9729-16F5/870439/DB_EMMonthly_2014-03-13_GDPBD00000262162.pdf







Major escalation in Ukraine tension in recent weeks

− Pro-Russia leader deposed following months of

protests resulting in new government that wants

to integrate with EU

− Russia has supported a separatist

administration in Ukraine’s Crimea region, of

mostly Russian-speaking population

− Diplomatic tensions between Russia and the US

and Europe have escalated

The West is threatening sanctions, although

Europe’s closer economic ties and dependency on

Russian energy make these less likely

− 30% of Europe’s gas comes from Russia

Crimea referendum on independence on 16-Mar,

while elections are due in Ukraine in May

We expect no military escalation but rather intense

diplomatic maneuvering over the next few years

While unlikely, a tit-for-tat round of economic

sanctions remains an important risk

Key facts

Ukraine is a relatively new state (independent since

1991), though Ukrainian nationalism has been a

political movement since the 19th century

Historically, Russia has considered it to be in its

sphere of influence, resisting EU efforts to integrate

Ukraine

Ukraine’s strong linguistic and cultural divide makes

a quick resolution difficult

− Nationalist, EU-facing West

− Russian ethnic and speaking East

17

Ukraine continues to be at the focus of major political and economic turbulence

>75% 25% - 74% 5% - 24% <5%

% of Russian speakers in Ukraine

Bailing out Ukraine- 12th Mar 14

Ukraine

Black sea Russian naval base at Sevastopol

https://ger.gm.cib.intranet.db.com/ger/document/ShowPdf.eqsr?productIDMore=0900b8c08802a8bb





EM debt fund outflows continue on weak sentiment

− In the 8 weeks to 5-Feb, institutional EM mutual

debt funds saw outflows of USD 2.9bn

− EM Hard currency debt funds, however, actually

saw inflows of USD 570m

However we do not expect contagion and a

widespread ‘EM crisis’ and sell-off

Instead, differentiation should continue as markets

penalise ‘bad EM’ and reward ‘good EM’

− Countries with current account deficits, failing to

reform or where tensions are building up are

under pressure – e.g., Ukraine, Venezuela,

Thailand, Russia

− Unlike during the Q2 2013 sell-off, good stories

are now being rewarded – e.g., record USD-

denominated bond sales in Indonesia, Slovenia,

Mexico, Colombia in 2014

Risks remain for 2014, both idiosyncratic (e.g.,

elections, escalating tensions) and external

− Systemic risks only if China or the US slows

down materially, or if capital outflows become

substantial and weaken country fundamentals

18

We do not expect contagion and a widespread ‘EM crisis’, but rather continued differentiation between countries

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

Local currency

Hard currency

Source: Deutsche Bank Research; EPFR Global

EM weekly debt fund flows show increasing differentiation by asset

class

USD bn 8 wk, rolling avg

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14

Diversification Ratio

Note: The diversification ratio looks at the volatility of the return on a basket of EM currencies

1= zero correlation between the currencies in the basket; 0 = perfect correlation between currencies

Source: Deutsche Bank Research

EMFX is seeing increased differentiation within its constituent

members – correlation between different currencies is falling

EM

FX

co

rre

latio

n

Perfect

None

Central Europe: A Good EM Story - 14th Mar 14

http://pull.db-gmresearch.com/p/2950-0F6D/1998108/DB_SpecialReport_2014-03-14_0900b8c087f005c3.pdf





While EM equities could be tactically oversold, structural drivers remain negative

80

90

100

110

120

130

Feb-13 May-13 Aug-13 Nov-13 Feb-14

Note: EM refers to MSCI EM index. DM is proxied using the MSCI World index. US refers to the MSCI US index.

Source: Bloomberg Finance LP; Deutsche Bank Research

Total returns in EM have lagged DM and US equities in USD terms

over the last 12m

% US +25%

DM +22%

EM -6%

EM equities continue to underperform in USD terms

− Since Jan-2013, EM equities have returned -6% while DM equities have risen 22% and US 25%

EM equities could be tactically oversold, with some markets looking cheap on a price to book value level

However, underlying causes of the current sell-off in EM equities are structural, namely a rise in state intervention and a deterioration in corporate governance

EM outflows could stabilise in the short-term

− A decisive move down in oil prices

− Signs of improving exports

But unlikely to be any decisive break-out in any direction until long-term outlook for China is cleared

China

Brazil

Russia

India

Mexico

Chile

Poland

Turkey

Thailand

Malaysia Taiwan

Indonesia

Korea

South Africa

Philippines

Egypt

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4 8 12 16 20 24

Widespread dispersion of value is evident across EM equity markets

P/BV (x)

RoE (%)


Higher valuations

Lower valuations

19 GEM Equities Feb 2014

https://ger.gm.cib.intranet.db.com/ger/document/ShowPdf.eqsr?productIDMore=0900b8c087fe1c82


20

In the US, where high valuations offer limited upside, corporates can pursue various strategies to enhance shareholder value

-4

-3

-2

-1

0

1

2

3

-600

-400

-200

0

200

400

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013F

Funding Status ($bn, lhs) Funding Status % of Mkt cap (rhs)

Reduce pension risk: as full funding is reached, companies should

match remaining liabilities by switching into LT fixed income assets

Source: Worldscope, Compusat, Deutsche Bank Research

Underfunded

Overfunded

strong equity and fixed income

returns over recent year have helped

companies plug their pension deficits

1

4

10

20

30

40

50

60

1968 1973 1978 1983 1988 1993 1998 2003 2008 2013

Net Debt / Market Cap (non-financials)

Optimise capital structure: raise net debt / market cap to take

advantage of low rates and relatively high cost of equity

Source: Compustat , Deutsche Bank Research

%

Net debt to market cap at

record low of 14% vs.

29% avg. since 1967 and

35-40% in the late 1980s

20 25 30 35 40 45 50 55 60 65 70 75

1960 1966 1972 1978 1984 1990 1996 2002 2008 2014

S&P500 Div payout Ratio

Increase cash payouts: firms with strong dividend growth to

outperform amid demand from income-starved investors

Note: Shaded area represents recession

Source: Bloomberg Finance L.P, Deutsche Bank Research

even with double digit dividend growth over 2014 and 2015,

payout ratios will remain below long-term average %

2014-15 Forecast

1960-07 Avg: 45%

2

3

0

1

2

3

4

5

6

7

2000 2005 2010 2015 2020 2025 2030 2035 2040

Fed Funds Rate USD 3m OIS*

Lower ROI targets on new investments: future rates are likely to

peak below pre-crisis levels suggesting firms

%

*Market-implied ECB / Fed policy rate


Terminal rates to peak at

lower levels compared to

history enabling firms to

lower hurdle rates for capex

S&P CFOs: Five things to do in 2014 -1st Mar14

https://ger.gm.cib.intranet.db.com/ger/document/pdf/0900b8c087f74842.pdf




21

Recent technology deals and stocks price moves have evoked memories of the early 2000s dotcom bubble

The rally of some stocks evokes memories of the

dot-com boom

− After a 600% rally since Jan 2013, Tesla is now

worth half of GM, which sells 400x as many cars

− In China, internet stocks, like Tencent, have

rallied strongly in a falling market

− Netflix stock has almost quadrupled since 2013

Investors have also started to pile cash into tech

firms since the beginning of the year

− Tech debt issuance is at a record

− Tech IPO volume is at the highest since 2004

− Tech M&A at the highest since 2000

…Facebook paid USD 19bn for WhatsApp, a

company with 55 employees and USD 20m

of revenues in 2013

* January-February

56

90

27

10 8 19 21

43 26

30

10 13

26 26 37

57

0

500

1000

1500

0

20

40

60

80

100 Value Volume

Tech M&A value ytd* at highest since 2000

Source: Dealogic, Deutsche Bank Research

WhatsApp, $19bn

$bn

Note: Computer & Electronics M&A, announced

30

65

100

Google searches for "Best Stock Broker"


Recent activity has captured the imagination of the public with signs that retail

investors are once again interested in equities. Possibly a contrarian indicator

Historical Peak = 100

-4 0 10 11 19 27 29 42 66

137 151 280

364

-200

0

200

400

600

Closing prices as of 13thMarch 2014 COB, Source: Bloomberg Finance LP, Deutsche Bank Research

Tech stock returns since 1 Jan 2013: Outliers on both sides of the S&P 500

% ‘Old’ tech stocks have not

participated in the rally

602

“We have a bubble”

Robert Shiller,

Feb-2014

“A sceptic would have to be blind not to see

bubbles inflating in [...] stock market valuations of

fashionable companies like Netflix and Tesla”

Seth Klarman, Baupost Group, Mar-2014


22

We believe that Facebook’s takeover of WhatsApp (even at this price) was justified, but Tesla’s stock price seems too optimistic

$.01 $.01 $.02 $.02 $.04 $.04

$1.17

0.0

0.2

0.4

0.6

0.8

1.0

1.2 Market-cap per vehicle sold (USD m)


Tesla is valued at USD 1.17m per vehicle sold right now

Tesla’s current valuation would require rapid growth

with little disruption, a very optimistic scenario

− Tesla is currently valued at $1.2m per vehicle,

vs. $40k for BMW and $10k for GM

− Tesla aims to produce 500k cars by 2020,

implying production will surge by 55% p.a.

− Tesla faces significant uncertainties over cost,

future battery supply, its distribution network and

competition from traditional manufacturers

compressing margins

0

100

200

300

400

500

1 2 3 4 5

WhatsApp has grown its user base more quickly than any other

social media platform during its first 5 years


419m

145m

123m

54m

52m

Years since founded

Facebook’s acquisition of WhatsApp can help it

solidify its position as the top company in mobile

− FB paid $42 per user for WhatsApp vs. $33 for

Instagram; current market valuations per user

are $123 for Twitter and $170 for FB

− $19bn is in line with revenue per user that other

messaging models in Asia are able to generate

− Also a defensive move: WhatsApp’s rapid

growth could easily have cost FB future sales

(up to the 8% of market cap it paid in stock)

Tesla Motors - 20 Feb 14

Facebook - 20 Feb 14

https://ger.gm.cib.intranet.db.com/ger/document/pdf/0900b8c087f26d5a.pdf




https://ger.gm.cib.intranet.db.com/ger/document/pdf/GDPBD00000261140.pdf






Asset price views

Asset Class View Rationale

Equities

Bullish equities Preferred asset class for 2014, see ~10% total returns on stronger earnings and growth

US: overweight 2014 likely a year of normal EPS growth, PEs, total returns and volatility

Mixed recent macro data raises near-term uncertainty. S&P500 attractive below 1,750

Europe: remain bullish Scope for outperformance, especially in the periphery, on upside surprise in credit growth

Expected acceleration in global growth should provide further support

Japan: remain bullish Abenomics to fuel further gains. YTD underperformance provides attractive entry point

Rates US rates to sell-off mildly

Accelerating US growth while inflation remains subdued before normalising later in the year

Environment favourable for a mild rise in US rates, with front-end rates rising to close the

gap with Fed own projections

Further rise only when data concerns are overcome, upward trend of inflation is confirmed

FX Long USD Stronger US growth, Fed exit bias, and recovery in US equity inflows to support the USD

Limited upside to EURUSD Euro supported by (low) real yields due to low inflation – but limited scope for lower yields

While portfolio inflows have been supportive, M&A flows already point to a weaker euro

Short AUDUSD – hedge

against China slowdown Dollar bloc FX among most expensive; AUD has overshot commodities in recent weeks

China slowdown would hurt Australia economy and AUD

Credit Constructive on credit

overall

US: value in short-duration / low quality and long-duration / high quality credit – widest

sectors across the credit spectrum; also most underweight sectors going into 2014

Europe: long IG vs. HY on a levered / ratio basis, as HY has outperformed IG YTD and

appears rich to IG on several metrics

EM Expect continued

differentiation Renewed bouts of pressure likely, as underlying difficulties in weak countries not resolved –

but we don’t expect a generalised sell-off and instead should see continued differentiation

Commodities Short crude oil Rampant US oil supply growth and upside risks to Libyan and Iranian crude oil exports imply

a bearish environment for crude oil in 2014. See drop of $10/bbl

23


DB forecasts

24

* CPI (%) forecasts are period averages

CEEMEA: Czech Rep., Hungary, Poland, Russia, Turkey, South Africa, Israel, Romania, Kazakhstan,

Ukraine, Egypt, Saudi Arabia and UAE

LATAM: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela

ASIA: China, HK, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Sri Lanka, Taiwan, Thailand,

Vietnam

DM: US, Japan, Eurozone, UK, Denmark, Norway, Sweden, Canada, Australia, New Zealand, Switzerland

2012 2013F 2014F 2015F Current Q1-14 Q2-14 Q4-14

Global 3.0 2.8 3.5 3.9 US 10Y yield (%) 2.63 2.50 2.75 3.15

US 2.8 1.9 3.2 3.8 EUR 10Y yield (%) 1.55 1.70 1.90 2.20

Eurozone -0.6 -0.4 1.1 1.4 EUR/USD 1.39 1.35 1.32 1.25

Germany 0.7 0.4 1.5 2.0 USD/JPY 102 106 109 115

Japan 1.4 1.5 0.4 1.4 S&P 500 1,846 1850

UK 0.3 1.8 2.7 2.0 Stoxx 600 325 375

China 7.8 7.7 8.6 8.2 Gold (USD/oz) 1,372 1190 1150 1100

India 5.1 3.9 5.5 6.0 Oil WTI (USD/bbl) 98 95 85 90

EM (Asia) 6.0 5.9 6.8 6.8 Oil Brent (USD/bbl) 108 100 95 100

EM (Lat Am) 2.8 2.3 2.1 2.9

EM (CEEMEA) 2.7 2.3 2.0 3.2

EM 4.7 4.5 5.1 5.4

DM 1.4 1.1 2.2 2.6

2012 2013F 2014F 2015F Current 2013 2014 2015

US 2.1 1.5 2.1 2.3 US 0.125 0.125 0.125 1.750

Eurozone 2.5 1.3 1.0 1.4 Eurozone 0.25 0.25 0.25 0.75

Japan 0.0 0.4 3.0 1.7 Japan 0.10 0.10 0.10 0.10

UK 2.8 2.6 1.8 1.7 UK 0.50 0.50 0.50 0.75

China 2.6 2.6 3.5 3.2 China 3.00 3.00 3.25 3.25

India 9.7 10.1 6.3 6.7 India 8.00 7.75 7.50 7.50

GDP growth (%) Key market metrics

Current prices as of 13 M arch

CPI inflation, YoY* (%) Central Bank policy rate (%)


Appendix 1 Important Disclosures Additional Information Available upon Request

Analyst Certification

This report covers more than one security and was contributed to by more than one analyst. The views expressed in this report accurately reflect the

views of each contributor to this compendium report. In addition, each contributor has not and will not receive any compensation for providing a specific

recommendation or view in this compendium report. Raj Hindocha/Marcos Arana

Attribution

The Author of this report wishes to acknowledge the contributions made by Shakun Guleria and Varun Narang, employees of Infosys Ltd., a third

party provider to Deutsche bank offshore research support services.

For disclosures pertaining to recommendations or estimates made on a security mentioned in this report, please see the most recently

published company report or visit our global disclosure look-up page on our website at

http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr.

25

http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr


Regulatory Disclosures

1. Important Additional Conflict Disclosures Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the “Disclosures Lookup” and “Legal” tabs. Investors are strongly

encouraged to review this information before investing.

2. Short-Term Trade Ideas Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank’s existing longer

term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com.

3. Country-Specific Disclosures Australia and New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act and New Zealand

Financial Advisors Act respectively.

Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank.

The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. In cases where at

least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparation of this research report, the Brazil based analyst

whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspective and for its compliance with CVM Instruction # 483.

EU countries: Disclosures relating to our obligations under MiFiD can be found at http://www.globalmarkets.db.com/riskdisclosures.

Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments

dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II Financial Instruments Firms Association, The Financial Futures

Association of Japan, Japan Investment Advisers Association. This report is not meant to solicit the purchase of specific financial instruments or related services. We may charge

commissions and fees for certain categories of investment advice, products and services. Recommended investment strategies, products and services carry the risk of losses to

principal and other losses as a result of changes in market and/or economic trends, and/or fluctuations in market value. Before deciding on the purchase of financial products and/or

services, customers should carefully read the relevant disclosures, prospectuses and other documentation. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are

not registered credit rating agencies in Japan unless "Japan" or "Nippon" is specifically designated in the name of the entity.

Malaysia: Deutsche Bank AG and/or its affiliate(s) may maintain positions in the securities referred to herein and may from time to time offer those securities for purchase or may

have an interest to purchase such securities. Deutsche Bank may engage in transactions in a manner inconsistent with the views discussed herein.

Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the

Russian Federation.

Risks to Fixed Income Positions Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise to pay fixed or variable interest rates. For an investor that is

long fixed rate instruments (thus receiving these cash flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a loss.

The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the loss. Upside surprises in inflation, fiscal funding needs, and FX

depreciation rates are among the most common adverse macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation

(including changes in assets holding limits for different types of investors), changes in tax policies, currency convertibili ty (which may constrain currency conversion, repatriation of

profits and/or the liquidation of positions), and settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed income

instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to FX depreciation, or to specified interest rates – these are common in

emerging markets. It is important to note that the index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended to track.

The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon rates (i.e., coupons indexed to a typically short-dated interest rate

reference index) are exchanged for fixed coupons. It is also important to acknowledge that funding in a currency that differs from the currency in which the coupons to be received

are denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to the risks related to rates movements.

26


Global Disclaimer The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively "Deutsche Bank"). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable.

Deutsche Bank makes no representation as to the accuracy or completeness of such information.

Deutsche Bank may engage in securities transactions, on a proprietary basis or otherwise, in a manner inconsistent with the view taken in this research report. In addition, others within Deutsche Bank, including strategists and sales staff, may take a view

that is inconsistent with that taken in this research report.

Opinions, estimates and projections in this report constitute the current judgement of the author as of the date of this report. They do not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no

obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability of financial instruments are

subject to change without notice. This report is provided for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. Target prices are inherently

imprecise and a product of the analyst judgement. As a result of Deutsche Bank’s March 2010 acquisition of BHF-Bank AG, a security may be covered by more than one analyst within the Deutsche Bank group. Each of these analysts may use differing

methodologies to value the security; as a result, the recommendations may differ and the price targets and estimates of each may vary widely. The financial instruments discussed in this report may not be suitable for all investors and investors must make

their own informed investment decisions. Stock transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may

adversely affect the investment. Past performance is not necessarily indicative of future results. Deutsche Bank may with respect to securities covered by this report, sell to or buy from customers on a principal basis, and consider this report in deciding to

trade on a proprietary basis.

Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk. The appropriateness or otherwise of these products for use by investors is dependent on the investors' own circumstances including

their tax position, their regulatory environment and the nature of their other assets and liabilities and as such investors should take expert legal and financial advice before entering into any transaction similar to or inspired by the contents of this

publication. Trading in options involves risk and is not suitable for all investors. Prior to buying or selling an option investors must review the "Characteristics and Risks of Standardized Options," at http://www.theocc.com/components/docs/riskstoc.pdf . If

you are unable to access the website please contact Deutsche Bank AG at +1 (212) 250-7994, for a copy of this important document.

The risk of loss in futures trading and options, foreign or domestic, can be substantial. As a result of the high degree of leverage obtainable in futures and options trading losses may be incurred that are greater than the amount of funds initially deposited.

Unless governing law provides otherwise, all transactions should be executed through the Deutsche Bank entity in the investor's home jurisdiction. In the U.S. this report is approved and/or distributed by Deutsche Bank Securities Inc., a member of the

NYSE, the NASD, NFA and SIPC. In Germany this report is approved and/or communicated by Deutsche Bank AG Frankfurt authorized by the BaFin. In the United Kingdom this report is approved and/or communicated by Deutsche Bank AG London, a

member of the London Stock Exchange and regulated by the Financial Conduct Authority for the conduct of investment business in the UK and authorized by the BaFin. This report is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in

Korea by Deutsche Securities Korea Co. This report is distributed in Singapore by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch (One Raffles Quay #18-00 South Tower Singapore 048583, +65 6423

8001), and recipients in Singapore of this report are to contact Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch in respect of any matters arising from, or in connection with, this report. Where this report is

issued or promulgated in Singapore to a person who is not an accredited investor, expert investor or institutional investor (as defined in the applicable Singapore laws and regulations), Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia

Limited, Singapore Branch accepts legal responsibility to such person for the contents of this report. In Japan this report is approved and/or distributed by Deutsche Securities Inc. The information contained in this report does not constitute the provision

of investment advice. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the

product. Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register Number in South Africa: 1998/003298/10). Additional information relative to securities, other financial products or issuers discussed in this

report is available upon request. This report may not be reproduced, distributed or published by any person for any purpose without Deutsche Bank's prior written consent. Please cite source when quoting.

Copyright © 2014 Deutsche Bank Securities Inc.

27

db house view

Documents

research deutsche bank

mixed data

global economy

global growth outlook

weaker data

data boe

research colleagues

senior research staff