Investment Strategy - Bank of Cyprus · Global Macro Outlook: Summary 15 US Macro 16 Eurozone...

Investment

Strategy

Outlook Q2 2017

Table of Contents

Contents

Strategic Asset Class Views 4

Strategic Asset Allocation Views 5

Investment Strategy Views 6

Global Economic Environment and Prospects 8

Asset Class Performance 9

Bond Markets Performance 10

Equity Markets Performance 11

FX Market Performance 12

Commodities & Alternative Performance 13

Global Macro Outlook: Summary 15

US Macro 16

Eurozone Macro/ECB 18

Japan Macro 20

UK Macro 21

BRIC’s 22

Government Bonds 25

Periphery Bonds 27

Emerging Market Bonds 28

Credit Markets (IG & HY) 29

Global Equities 30

US Equity Markets 31

S&P 500 Valuation 32

US Equity Sectors 33

Cyclical Vs Non Cyclical 34

Equity Volatility 35

European Equities 36

European Equity Valuations 37

Asian, Emerging Markets & EU Periphery Markets 38

Commodities 39

FX 41

2

Source: Bloomberg, BOC Investment Strategy Team

Overview Q1 2017

Our Views

Global Macros

Outlook

3


Bullish Bearish Bullish Bearish

Strategic Asset Class Views

Bullish Bearish

Global Equities Global Bonds Alternatives

Neutral

Commodities Cash Euro

Neutral Neutral

Neutral Neutral Neutral

Bullish Bearish Bullish Bearish Bullish Bearish

As of 31March 2017

4


Strategic Asset Allocation Views Global Equities

--- -- - 0 + ++ +++

US Equities

Europe

Germany

UK Equities

Japan

BRICs

Russia

India

Brazil

China

Commodities

--- -- - 0 + ++ +++

GOLD

OIL

Cash

--- -- - 0 + ++ +++

CASH

Alternatives

As of 31March 2017

5

Currencies

--- -- - 0 + ++ +++

EUR/USD

EUR/GBP

EUR/CHF

USD/JPY

BASKET/RUB

Equity Sectors

Technology

Telecom

Energy

Industrials

Financials

Eurozone

US

Healthcare

Consumer Staples

Consumer Discretio.

Utilities

Materials

Underweight Neutral Overweight

Global Bonds

--- -- - 0 + ++ +++

Government US

Short Duration

Long Duration

Government EU

Short Duration

Long Duration

Investment Grade US

Investment Grade EU

High Yields Bonds US

High Yields Bonds EU

Emerging Markets

Current

Previous


Investment Strategy Views

Equities

Current equity valuations are overextended, pointing to a period of below average returns, while the rally in the

first quarter has already discounted the positive impact from Donald Trump’s election victory. We take back our

upgrade in Global Equities in Q1 to move down one notch from – to - - for the second quarter. Geographically,

we continue to prefer US equities over European and Emerging Markets.

Bonds

We expect the Fed to raise interest rates a further two times in 2017 (by 25bps each time), and the latest Fed

“dot-plot” reveals Fed Funds at 3% by the end of 2019. As growth and reflation expectations are scaled back

we move Global Bonds and US Government Bonds up one notch from - to neutral. In the credit space

we prefer Investment Grade over High Yield.

Currencies

The US dollar uptrend while faltering at present due to falling yields is expected to strengthen in Q2 at a

moderate pace. EURUSD recent rally was an opportunity to go long the dollar for lower levels in the second

quarter, we remain negative on EURUSD and move USDJPY from positive to neutral. We also move

EUR/GBP to neutral from – due to uncertainty arising from the upcoming Brexit negotiations.

Commodities

Demand for Gold as a safe-haven asset is expected to continue throughout Q2, keeping our view positive,

Crude Oil has found its equilibrium after its recent decline and is supported by OPEC extending their

production cuts, we remain neutral.

Alternatives

We continue to favour non traditional asset classes, such as Alternative Investments since they have a low

correlation with the standard asset classes (equities, bonds) and are suitable for better diversification purposes.

Main positions and quarterly changes

6


Overview Q1 2017

Our Views

Global Macros

Outlook

7


Global Economic Environment and Prospects

First quarter main events at a glance

• Donald Trump was sworn in as the 45th President of the United States on Jan 20th, and in his speech

reiterated his campaign pledges to increase spending, cut taxes and reform regulations. However, in the

administrations first test to delivering on these policies, House Republican leaders were forced to

withdraw the GoP healthcare bill from consideration after the legislation failed to garner sufficient support

to pass. Financial markets immediate response was to revise their expectations for the prospects of other

campaign promises , with an immediate negative impact felt in equities and the US dollar, while bond

markets rallied driving yields lower across the curve.

• The US Federal Reserve in a widely anticipated move increased its benchmark interest rate 0,25% to a

0,75% - 1% range, for the third time in the cycle. US Equity markets were encouraged by Fed Chair Janet

Yellen’s less hawkish tone pointing to “gradual” increases in 2017 of two more hikes.

• In Europe, the ECB left its rate on main refinancing operations at 0%, while signalling policy continuity by

reiterating its commitment to a substantial degree of monetary accommodation, while at the same time

acknowledging an improvement in the economic outlook for the Eurozone. Whilst in the UK, the Bank of

England’s Monetary Policy Committee voted 8 – 1 to keep interest rates at 0,25% in March, the split of

opinion (8 – 1 vs. 9 – 0) was the first since July 2016, prompting a rally in the pound.

• The majority of commodity markets moved lower in Q1 with Crude Oil being hit particularly hard (WTI -

9,6% YTD to $50,5 per barrel) as data on US crude oil production (+9,1 m barrels) points to growing

inventories and increasing production capabilities, as the current active US rig count is at its highest level

since September 2015 (662). Meanwhile, Gold has rallied this quarter to $1.250 per ounce (+7,9% YTD)

buoyed by the uncertainty in the US and EU political arena, a reassessment of the pace of rate hikes

from the Fed and a weakening US dollar.

8


Asset Class Performances

Asset Class Performance

• Equities in both US and Europe posted solid gains in Q1, Japan suffers, hit by strengthening Yen

• Bond markets recover from Q4 sell-off, encouraged by dovish Fed comments

• Crude down 9,6% on supply glut concerns, while Gold benefits from safe-haven status in first quarter

• Dollar depreciates vs. majors as investors scale back US rate hike expectations

9

18%

1%

-2% -6%

0%

12%

16% 14%

24%

20%

26%

16% 17%

-9,6%

7,9%

1,6% 1,5%

-4,7%

5,9%

11,1%

5,5%

2,1%

9,8%

7,6% 6,4%

-0,7%

CRUDE OIL GOLD GLOBALBONDS

EUR/$ $/JPY MSCI WORLD MSCI EM S&P 500 RUSSEL 2000 NASDAQ DAX EUROSTOXX600(Ex UK)

NIKKEI

1 YR CHANGE Q1 CHANGEAs at 31-03-2017


Bond Indices Performances

Bond Markets Performance

• Overall positive quarter for bonds, Central Bank policy dominates market sentiment

• Eurozone Sovereign underperformed, in particular long-end

• Corporates in US & EU outperform, high yield favoured

• Emerging market bonds see inflows as investors attracted by higher yields

As at 31-03-2017

10

-1%

-4%

2%

8%

0%

-5%

3%

17%

7%

10%

-2% -1,1%

-3,2%

0,1% 1,4%

0,3% 1,4% 1,3%

2,9% 3,5% 3,5%

1,8%

Eurozone Sov 5-10

Eurozone Sov10+

EUR InvestmentGrade

EUR High Yields US Treasury 1-3 US Treasuries10+

USD InvestmentGrade

US High Yield Emerging MarketSov

Emerging MarketCorp

Barclays GlobalAggregate USD

(Uh)

1 YR CHANGE Q1 CHANGE


Equity Indices Performances

• Equites posted solid gains across all regions in the first quarter (exception Russia)

• Russian stocks fall 10,6% in Q1 due to negative energy prices

• Technology favoured in US markets as Nasdaq (+9,8%) outperforms S&P (+5,5%) & Dow (+4,6%)

• Emerging Markets rally as fears over protectionist US policies subside

Equity Markets Performance

11

As at 31-03-2017

12% 14%

16%

24%

20% 19%

26%

19% 19% 17%

7%

16%

7,5%

19%

29%

5,9% 5,5% 4,6% 2,1%

9,8%

6,4% 7,6%

5,4%

2,6%

-0,7%

3,8%

11,1%

-10,61%

12,5%

7,9%

MSCI World S&P 500 Dow Jones Russell 2000 NASDAQ Eurostoxx50

DAX CAC FTSE 100 Nikkei Shanghai MSCIEmerging

Market

Russia India Brazil



Currency Performances

FX Market Performance

• US dollar down against the majors, depreciates 4,7% vs the Yen and 1,5% vs. the Euro as interest

rate differentials tighten

• Sterling stabilizes vs. the EUR and USD, even as UK formally triggers Brexit (article 50)

• Ruble falls 16% vs. USD driven by losses in Crude Oil

• Aussie dollar appreciates 5,5%, helped by rising metals prices

12

As at 31-03-2017

6%

-6%

-12%

0%

-4%

-2%

7%

-6%

-16%

-23%

7%

0%

-1,7%

1,5% 1,5%

-4,7%

-1,7% -0,3% -0,3%

-3,4%

-8,2% -7,3%

-0,8%

5,5%

Dollar Index EURUSD GBPUSD USDJPY USDCHF EURCHF EURGBP EURJPY RUBLE EURRUB USDCNY AUDUSD



Commodities Performances • Crude oil, down 9,6% in Q1, negatively impacted

by increasing US production and scepticism

surrounding compliance of OPEC production cut

deal

• Gold gains 7,9% in the first quarter, supported by

falling yields, a weaker US dollar and geo-political

risks

• Copper has increased 5,7% in Q1, adding to the

strong gains in the fourth quarter, albeit at a slower

pace. The advance in prices has been checked by

the spike in copper inventories on the LME

(London Metals Exchange), which reached their

highest level since February 2014.

• Event driven strategies continue their solid

performance in Q1 up 2,6% , taking advantage of

M&A activity and corporate restructurings

• Market neutral strategies rebounded in Q1 by 1,9%

• Macro and CTA’s (Commodity Trading Advisors)

continue to struggle in current markets which lack

clear direction

Commodities & Alternative Performance

Alternative Strategies Performances

13

22%

-5%

1%

20% 21%

18%

-8,9%

2,7%

7,9%

13,6%

5,7%

-9,6%

Natural Gas Corn Gold Silver Copper Crude Oil


-5% -4%

16%

-1%

6% 6% 8%

9%

3% 1%

-0,8% -0,4%

2,6% 1,9% 1,6%

2,7% 1,0% 2,2%

0,0%

0,7%

Macro CTA Event Driven MarketNeutral

Global HedgeFund

Equity Hedge Credit ConvertibleArb

M&A AbsoluteReturn


As at 31-03-2017

Overview Q1 2017

Our Views

Global Macros

Outlook

14

• OECD states that “global growth is set to pick up modestly, but remains too slow”

• Points to disconnect between financial markets and real economy as risk to growth

• Suggests policies that strengthen inclusive growth and manage risks, including maintaining open markets

• Raises GDP growth forecast for United Kingdom for 2017 by 0,4% to 1,6% on improved economic

outlook

• Maintains forecasts for World and Eurozone GDP in 2017

• Reduces US 2018 GDP by 0,2% to 2,8%

OECD Economic Outlook Forecasts

Source: OECD Interim Economic Outlook, Mar 2017

Previous refers to Nov 2016 estimates

Global Macro Outlook: Summary

15

2016 2017 2018

Previous New Previous New

World 3,0% 3,3% 3,3% 3,6% 3,6%

USA 1,6% 2,3% 2,4% 3,0% 2,8%

Eurozone 1,7% 1,6% 1,6% 1,7% 1,6%

United Kingdom 1,8% 1,2% 1,6% 1,0% 1,0%

Japan 1,0% 1,0% 1,2% 0,8% 0,8%

China 6,7% 6,4% 6,5% 6,1% 6,3%

India 7,0% 7,6% 7,3% 7,7% 7,7%

Brazil -3,5% 0,0% 0,0% 1,2% 1,5%


GDP YoY %

US Macro

Unemployment Rate & Nonfarm Payrolls

CPI & Core CPI

16

-2,80%

2,50%

1,60%

2,20%

1,50%

2,40% 2,60%

1,60%

2,20% 2,30%

2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F

-0,5

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

%

CPI CPI Core FED Target

-400

-300

-200

-100

0

100

200

300

400

500

600

0

2

4

6

8

10

12

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6‘

T

h

o

u

s

a

n

d

s

%

Full employment Unemployment Nonfarm Payrolls

• US GDP for Q4 2016 came in at 2,1% boosted by

consumer spending. GDP annual growth rate

expanded by 2,0%

• Full employment for the US economy. Unemployment

fell to 4,7% in February, labour force participation rate

at 63 percent

• Despite the decline in the unemployment rate,

average hourly earnings are increasing slowly ( 0,2%

consecutive increase over the last 3 months)

• Headline inflation is on the rise, but core prices and

wages are moving slow. The Fed recognises that

“symmetric” inflation may temporarily go above the

2% level


Consumer Confidence & Consumption

FED Balance Sheet

ISM Manufacturing PMI

9000

9500

10000

10500

11000

11500

12000

50

55

60

65

70

75

80

85

90

95

100

Ma

r-09

Se

p-0

9

Ma

r-10

Se

p-1

0

Ma

r-11

Se

p-1

1

Ma

r-12

Se

p-1

2

Ma

r-13

Se

p-1

3

Ma

r-14

Se

p-1

4

Mar-

15

Se

p-1

5

Ma

r-16

Se

p-1

6

%

Personal Consumption Consumer Confidence

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Jan

-08

Jul-0

8

Jan

-09

Jul-0

9

Jan

-10

Jul-1

0

Jan

-11

Jul-1

1

Jan

-12

Jul-1

2

Jan

-13

Jul-1

3

Jan

-14

Jul-1

4

Jan

-15

Jul-1

5

Jan

-16

Jul-1

6

Th

ou

sa

nd

s

$4,5 Trillion

US Macro and Federal Reserve

17

• Full employment, supports US consumption. Private

consumption accounts for over two thirds of the US

economy

• FED is expected to raise interest rates two more

times this year. However, looking ahead, we are

conscious of expected changes (reductions) in the

Fed’s balance sheet

• The Institute for Supply Management’s Manufacturing

PMI rose to 57,7 in February of 2017 above market

expectations of 56. It is the highest reading since

August of 2014

40

42

44

46

48

50

52

54

56

58

60

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

PMI 50 Level

> 50 Economy expanding

< 50 Economy contracting


GDP YoY % & CPI

Eurozone Macro

Europe PMI Manufacturing

European Unemployment dips below 10%

6

7

8

9

10

11

12

13

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

%

PMI 10%

18

-0,9%

-0,3%

1,2%

2,0%

1,7% 1,6% 1,6%

2,5%

1,4%

0,4%

0,0%

0,2%

1,7% 1,5%

2012 2013 2014 2015 2016 2017F 2018F

GDP CPI

40

42

44

46

48

50

52

54

56

58

60

Ma

r-14

Jun

-14

Se

p-1

4

Dec-1

4

Mar-

15

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-16

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-17

PMI 50 Level

> 50 Economy expanding

< 50 Economy contracting

• Inflation in the Eurozone returned in Q1, increasing

1,8% in January and 2% in February (the highest

inflation rate since January 2013)

• Eurozone trade surplus is supported by

manufacturing PMI’s, as exports continue to

advance. Eurozone manufacturing PMI in March rose

to 56,2 (the highest reading since April of 2011)

• While political perils abated towards the end of Q1,

volatility from French and German elections still a risk

• Brexit negotiations commenced as UK Prime Minister

triggers Article 50


ECB Deposit Facility

European Central Bank (ECB)

ECB Asset Purchased Breakdown

ECB LTRO

100

300

500

700

900

1100

1300

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

-0,6

-0,4

-0,2

0

0,2

0,4

0,6

0,8

1

Dec-0

9

Dec-1

0

Dec-1

1

Dec-1

2

Dec-1

3

Dec-1

4

Dec-1

5

Dec-1

6

%

223218

22830

1254635

51069 102274

1654026

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

CoveredBond

ABS PublicSector

Corporate MarketSecurities

Total QE

19

• The ECB removed a reference to using all available

measures (to induce growth and inflation) “because

the sense of urgency is not there”, Mario Draghi

9/3/2017

• The ECB is less worried about Eurozone banking

sector as the last TLTRO finished in March

• Mario Draghi referred to inflation as “transient”

blaming high energy and food effects, and was clear

on future interest rate policy, stating that rates “to

remain at present or lower levels for an extended

period of time, and well past the horizon of the net

asset purchases”


GDP YoY % & CPI

Japan Macro

Corporate profits and wage growth

Japan Tankan Survey

20

1,50%

2,00%

0,30%

1,20% 1,00% 1,10% 1,00%

0,00%

0,30%

2,70%

0,80%

0,40%

0,70%

1,00%

2012

2013

2014

2015

2016

2017F

2018F

GDP CPI

-15

-10

-5

0

5

10

15

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

Diff Tankan Forecast

-10

-8

-6

-4

-2

0

2

4

6

4

6

8

10

12

14

16

18

20

22

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

%

Trilli

on Y

en

Corporate Profit Wages Growth

• Japan continues to grow at a moderate pace, 1,6%

in the fourth quarter of 2016 qoq

• BoJ Governor Kuroda appeared cautious on

Japan’s inflation outlook and provided little

guidance regarding future rate rises

• Private consumption remains weak, despite the on

going improvement in labour and income

conditions

• Yen strengthens as investors shun foreign assets

• We change our positive view to neutral on

Japanese equities


GDP YoY % & CPI

UK Macro

UK Mortgage Approvals

UK Unemployment, Weekly Wages

21

• Uncertain future for the UK as PM, Theresa May

formally triggers article 50 (Brexit)

• Scottish Parliament votes for second independence

referendum

• A weak sterling and rising inflation will weigh on

private consumption (the pillar of UK growth in recent

years)

• Mark Carney (BOE’s governor) continues dovish

stance, in no hurry to raise interest rates, but ready to

act in either direction

0

1

2

3

4

5

6

7

8

9

-3

-2

-1

0

1

2

3

4

5

6

7

8

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

% %

Unemployment Weekly Earnings

8

18

28

38

48

58

68

78

Jan

-12

Jul-1

2

Jan

-13

Jul-1

3

Jan

-14

Jul-1

4

Jan

-15

Jul-1

5

Jan

-16

Jul-1

6

Jan

-17

Mill

ion

s Mortgage Approvals Average

1,3% 1,9%

3,1%

2,2%

1,8% 1,7%

1,3%

2,8% 2,6%

1,5%

0,0%

0,7%

2,6% 2,6%

2012 2013 2014 2015 2016 2017F 2018F

GDP CPI


China GDP YoY % & CPI

China & India

India GDP YoY %

China PMI & Industrial Production

22

0

2

4

6

8

10

12

14

16

18

20

37

42

47

52

57

62

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

%

PMI Industrial Production

4,8% 4,7%

6,5%

7,2%

7,9%

7,0% 7,3%

2012 2013 2014 2015 2016 2017F 2018F

7,9% 7,8% 7,3%

6,9% 6,7% 6,5%

6,2%

2,7% 2,6%

2,0%

1,4%

2,0%

2,2%

2,3%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

9,00%

2012 2013 2014 2015 2016 2017F 2018F

GDP CPI

• China’s transition into the “new normal” (weaker but

more sustainable growth) continues

• Potential “Trade Wars” – in April as Xi Jinping

(General Secretary) meets with Donald Trump

• China’s Caixin Manufacturing PMI, has been growing

for eight straight months, driven by new orders and

faster rises in output

• India’s demonetisation was a success for Modi’s

government, while household financial savings (in the

form of cash) are channelled towards financial assets

• No slowdown for India, as Modi rules after major

victories in state elections, pushing forward his

economic reform agenda


Brazil GDP YoY %

Brazil & Russia Macro

Russia GDP YoY % & CPI

Brazil Industrial Production & PMI

23

1,90%

3,00%

0,50%

-3,80% -3,60%

0,70%

2,20%

2012 2013 2014 2015 2016 2017F 2018F

38

40

42

44

46

48

50

52

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

Dec-1

4

Mar-

15

Jun

-15

Se

p-1

5

Dec-1

5

Mar-

16

Jun

-16

Se

p-1

6

Dec-1

6

%

Industrial Production PMI

3,50%

1,30%

0,70%

-2,80%

-0,20%

1,10% 1,50%

5,10%

6,80% 7,80%

15,60%

7,10%

4,40% 4,30%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

2012 2013 2014 2015 2016 2017F 2018F

GDP CPI

• Brazil suffers worst recession on record

• High unemployment, austerity measures, tight

monetary policy and political turmoil hinder Brazil’s

economy

• However, Brazil is expected to return to growth this

year due to improved confidence, a looser monetary

policy and lower inflation

• Higher oil prices in 2016 helped the Russian

economy to escape its prolonged recession

• Russia’s Central Bank surprised the markets by

cutting the interest rate by 25bps to 9,75% on March

24th

• Gradual GDP expansion with declining inflation are

expected to continue

Overview Q1 2017

Our Views

Global Macros

Outlook

24


US 10Y Treasury Yield Vs German 10Y Bund Yield

Government Bonds

Spread Between US 10Y & GER 10Y

25

-0,5

0

0,5

1

1,5

2

2,5

3

3,5

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

US 10Y German 10Y

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

Spread Average

• We expect the Fed to raise interest rates two more

times in 2017 (by 25 bp each time)

• The latest “dot-plot” plan reveals Fed Funds at 3%

by the end of 2019

• Long-term inflation (5y5y inflation breakeven) are

decelerating. Since the US election the US 10 Yr

yield moved from 1,88% to 2,62%, currently at

2,39%

• US yields advanced as investors bet on

reflationary policies, focus has now turned to

timing, therefore we expect recent high in yields to

contain any rally in Q2

• We move US Government Bonds up one notch

from negative to neutral

• ECB will remain accommodative, until core

inflation and wage growth are clearly rising

• We move EM bonds up from , -- to - as

protectionist fears have subsided and economic

fundamentals have improved


US Yield Curve

Government Bonds

German Yield Curve

US Inflation 5Y 5Y

26

1,5

2

2,5

3

3,5

4

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

5Y5Y Average

1,96

2,42

3,04

1,21

1,77

2,60

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

0 5 10 15 20 25 30

Years

Current 1 year ago

-0,36

0,34

1,10

-0,33

0,13

0,78

-1,00

-0,50

0,00

0,50

1,00

1,50

0 5 10 15 20 25 30

Years

Current 1 year ago

• US Treasuries have recovered from sell-off,

supported by scaling back of inflation and growth

prospects

• Although ECB, reiterated its accommodative stance,

there are rumours that a tapering process may play

out in the near future

• Eurozone risks involve political events (French and

German elections, early elections in Italy, Brexit

negotiations)

• Bund yields have escaped negative territory, however

“safe haven” flows into German bonds are likely to

continue


Periphery 10Y Bond Yields

Periphery Bonds

Cyprus 10y Bond Yields

Spread between German & Italian 10 Year Yields

27

-1

1

3

5

7

9

11

13

15

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

%

Spain Portugal Italy Greece

3

3,2

3,4

3,6

3,8

4

4,2

Oct-

15

Dec-1

5

Fe

b-1

6

Ap

r-16

Jun

-16

Au

g-1

6

Oct-

16

Dec-1

6

Fe

b-1

7

%

0

0,5

1

1,5

2

2,5

3

3,5

4

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

%

Spread

• Yields in Italy stabilised in the first quarter following

political turmoil in Italy. The spread between the 10

Yr Bund and the 10 Yr Italian Btp widened to 202 bp,

before retreating to 169 bp

• Spanish and Portuguese government bonds have

firmed, 10 Yr yields at 1,64% and 3,9%, respectively

• Greece dominated by politics as second review

nears, 10 Yr yield has fallen from 7,8% in Jan to

current 6,98%

• Cyprus bond yields have fallen, Standard and Poor’s

rating agency recently upgraded Cyprus by one

notch to BB+


Emerging Market Sovereign Bond Index

Emerging Markets Bonds

BRIC’s GDP Forecast

28

110

120

130

140

150

160

170

Ma

r-13

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-14

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-15

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-16

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-17

-3,8%

6,9%

-2,8%

7,2%

4,9%

-3,6%

6,7%

-0,2%

7,9%

5,2%

0,7%

6,5%

1,1%

6,8%

5,4% 2,2%

6,2%

1,5%

7,4%

5,5%

Brazil China Russia India BRIC

2014 2015 2016 2017

• We reiterate our negative view on EM bonds but to a

lesser extent, moving EM bonds to – from - -

• Although risks from protectionist US trade policies

and higher US rates are identified, currently they

appear less imminent

• In the event of a geo-political event, market

participants will seek “flight to safety” out of EM

• A strong dollar, is still a major source of concern

specifically for commodity related EM

• However, despite growing concerns on inflation and

event risks, EM bonds have been strong so far this

year


US & EU Investment Grade

Credit Markets (IG & HY)

US & EU High Yield

Correlation of Investment Grades & World Equity

29

35

55

75

95

115

135

155

175

195

215

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

EU US

200

300

400

500

600

700

800

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6CDX US itraxx EU

-0,6

-0,4

-0,2

0

0,2

0,4

0,6

0,8

1

1,2

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

• US investment grade and high yield have generated

modest positive returns in Q1, despite the weakness

in March

• As the Fed is engaged in its normalisation process,

we are positive on US IG bonds as market

participants will seek safety in better credit

• We change our view on US HY bonds from neutral to

negative, HY has been weighed down by the recent

fall in commodities and Trump’s first Congress defeat

(ACA act bill)


First Quarter Performance

Global Equities: Positive start to 2017

• Emerging Markets outperform in the first quarter, supported by better growth prospects and reduced fears

surrounding US protectionist policies

• US stocks post solid gains as investors focus on the reflation trade triggered by Donald Trump’s election

victory

• European equities rally as political risk subsides and improved economic data

• Nikkei posts Q1 decline, held back by renewed strength in the Yen

30

As at 31-03-2017

90

95

100

105

110

115

02

-Jan

-17

09

-Jan

-17

16

-Jan

-17

23

-Jan

-17

30

-Jan

-17

06

-Fe

b-1

7

13

-Fe

b-1

7

20

-Fe

b-1

7

27

-Fe

b-1

7

06

-Mar-

17

13

-Mar-

17

20

-Mar-

17

27

-Mar-

17

MSCI EM S&P 500 NIKKEI STOXX Europe 600


US Equity Indices Performances

US Equity Markets

US Sectors Performances

31

• NASDAQ motors ahead (+9,8%), outperforms S&P

500 and Dow Jones Industrial Average during the

first quarter of the year

• S&P 500 and Dow Jones advance 5,5% and 4,6%,

respectively during Q1, supported by Trump

administrations rhetoric

• Healthcare sector gains 7,9%, despite failure to

reform Obamacare

• Technology best performing sector (+ 12,2%), while

Energy lags (-7,3%) as global oil supply glut weighs

on oil’s price

• Unsupported by flattening US yield curve, Financials

lag major US indices, while Utilities are posting solid

returns (+5,4%)

• Trump’s administration expected pro-growth policies

have already been discounted in the market, focus

now on implementation for promised/proposed tax

reforms, trade policies and infrastructure spending

• We change our view on US equities from positive to

neutral as we see limited upside potential

14%

24%

12%

20%

16%

5,5%

2,1%

5,9%

9,8%

4,6%

S&P 500 RUSSELL 2000 MSCI World USD NASDAQ DOW JONES


22%

8%

2%

29%

-3%

16% 16%

3%

13% 11%

12,2%

7,9% 5,6%

2,1%

-5,1%

4,0% 5,3% 5,4%

-7,3%

8,1%

Tech Health Care ConsumerStables

Financials Telecom Industrial Materials Utilities Energy ConsumerDiscretionary


As at 31-03-2017


Next Year PE (Estimated) Current PE

Earnings & Dividend Yield (%) ROE (%) & P/Book Value Ratio

S&P 500 Valuation

32

10

15

20

25

30

35

Dec-9

8

Jun

-00

Dec-0

1

Jun

-03

Dec-0

4

Jun

-06

Dec-0

7

Jun

-09

Dec-1

0

Jun

-12

Dec-1

3

Jun

-15

Dec-1

6

PE Average

PE above long term average,

“Expensive”

8

10

12

14

16

18

20

22

24

26

Dec-9

8

Jun

-00

Dec-0

1

Jun

-03

Dec-0

4

Jun

-06

Dec-0

7

Jun

-09

Dec-1

0

Jun

-12

Dec-1

3

Jun

-15

Dec-1

6

PE Average

Forward PE ratio above its long term

average

14,7%

15,2% 15,0% 14,9%

15,3% 15,5%

15,3% 15,2% 15,4%

14,9% 14,9% 15,0%

16,3%

2,6 2,7 2,7 2,8 2,8 2,8

2,6

2,8 2,8 2,8 2,8 2,9

3,1

1,0

1,5

2,0

2,5

3,0

3,5

13,5%

14,0%

14,5%

15,0%

15,5%

16,0%

16,5%

Ma

r-14

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-15

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-16

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-17

ROE P/Book

1

2

3

4

5

6

7

8

9

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

Earnings Yield Average Earn Dividend Yield Average Div

Earnings Yield at 4,58%, below

average at 5,95%

S&P Dividend yield at 2,06%,

less than US 10yr bond yields


US Equity Sectors View

• Using the BOC Equity Screening Model, that screens companies of the S&P 500 Index, using solid

fundamentals, we derive our sector preferences

• Quantitative criteria (such as profitability, valuation, dividends, liquidity, momentum, consensus) are

strictly used for the screening process

• Our screening model assesses companies cross-sectionally (peer and overall comparison) and

individually for the last 5 years.

• This bottom-up methodology, helps us formulate our likes and dislikes across all major US sectors.

We also formulate our preferences for some European sectors using a top-down approach

US Equity Sectors

33

1

Equity Screening Model excludes financials

1

Equity Sectors

Technology

Telecom

Energy

Industrials

Financials

Eurozone

US

Healthcare

Consumer Staples

Consumer Discretio.

Utilities

Materials

Underweight Neutral Overweight

Current

Previous


Sectors Beta

Cyclical Vs Non Cyclical

• Cyclical stocks have performed strongly since

Trump’s election

• Sector performance has started to rotate from

cyclical to more defensive sectors.

• Cyclicals provide attractive dividend yield, at

upper range of S&P sectors

Sectors Performance since US Election

Sectors Estimate Dividend Yield %

1,12 1,19

1,08 1,03

0,97 1,03

0,81

0,30

0,60 0,60

-

0,20

0,40

0,60

0,80

1,00

1,20

1,40

Te

ch

Fin

ancia

ls

Industr

ial

En

erg

y

Consum

er

Dis

c

Ma

teria

ls

Health

Care

Utilit

ies

Te

lecom

Consum

er

Sta

ble

s

1,4%

1,9% 2,2%

2,8%

1,5%

2,1% 1,8%

3,6%

4,7%

2,7%

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

5%

Te

ch

Fin

ancia

ls

Industr

ial

En

erg

y

Consum

er

Dis

c

Ma

teria

ls

Health

Care

Utilit

ies

Te

lecom

Consum

er

Sta

ble

s

14,8%

9,2%

6,0%

0,4%

10,3% 9,1%

5,9%

12,0%

8,9% 9,0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Te

ch

Fin

ancia

ls

Ind

ustr

ial

En

erg

y

Consum

er

Dis

c

Ma

teria

ls

Health C

are

Utilit

ies

Te

lecom

Consum

er

Sta

ble

s

34


VIX

Equity Volatility

S&P 500 Historical Volatility (90D)

35

8

18

28

38

48

58

68

78

88

Dec-0

2

Jun

-04

Dec-0

5

Jun

-07

Dec-0

8

Jun

-10

Dec-1

1

Jun

-13

Dec-1

4

Jun

-16

VIX Average

VIX at historically low levels

0

5

10

15

20

25

30

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

HVOL Average

• No fear? The VIX (a.k.a. the fear gauge) is currently

hovering at 12, well below the long term average of

20

• Since the beginning of the year, the VIX remained in

check as it spiked momentarily at 15,11 (27/3/17)

following Trump’s administrations failure to reform

Obamacare

• Market participants seem content, in terms of risk, as

the VIX remained below 12 for most of the quarter

• However, as the Trump administration will try to push

forward its pro growth agenda, we expect VIX to

increase during Q2

• S&P 500 historical volatility for the first quarter of

2017 moved further away (below) from its long term

average


European Equity Indices Performances

European Equities

European Sectors Performances

36

• Improving economic fundamentals in the Euro Area,

along with a weak euro, supported European equity

indices

• Spain outperforms European equities, on the back of

improving macro-economic data that support growth

dynamics

• Inflation dynamics in the Euro Area (2% in February)

and Germany (1,6% in March) are starting to kick in

• Technology (+13%) leads the European sectors while

consumer services lag

• The troubled banking sector is also posting decent

returns (+8,4%), despite the re-capitalisation process

that is under way

• However, political risks for the Euro Area remain

(Brexit, French, German elections)

• We keep our one-notch negative view on European

Equities

19%

26%

19% 19%

15%

22%

5,4% 7,6%

2,6%

6,4% 6,5%

11,9%

CAC DAX FTSE 100INDEX

EUROSTOXX50

MILAN SPAIN


19%

12%

20%

26%

0%

16%

4%

20%

27%

7%

9,3% 8,1% 8,7%

13,0%

1,7%

4,5% 6,6%

7,6% 8,4% 7,9%

Financials ConsumerGoods

Healthcare Tech ConsumerServices

Auto Telecoms Industrial Banks Utilities


As at 31-03-2017


Eurostoxx 50 Current PE DAX Current PE

DAX Next Year PE (Estimated) Eurostoxx 50 Next Year PE (Estimated)

European Equity Valuations

37

6

16

26

36

46

56

66

Oct-

08

Ap

r-09

Oct-

09

Ap

r-10

Oct-

10

Ap

r-11

Oct-

11

Ap

r-12

Oct-

12

Ap

r-13

Oct-

13

Ap

r-14

Oct-

14

Ap

r-15

Oct-

15

Ap

r-16

Oct-

16

PE Average

DAX PE is at its long term average

6

7

8

9

10

11

12

13

14

15

Oct-

08

Ap

r-09

Oct-

09

Ap

r-10

Oct-

10

Ap

r-11

Oct-

11

Ap

r-12

Oct-

12

Ap

r-13

Oct-

13

Ap

r-14

Oct-

14

Ap

r-15

Oct-

15

Ap

r-16

Oct-

16

PE Average

6

11

16

21

26

31

36

41

46

Oct-

08

Ap

r-09

Oct-

09

Ap

r-10

Oct-

10

Ap

r-11

Oct-

11

Ap

r-12

Oct-

12

Ap

r-13

Oct-

13

Ap

r-14

Oct-

14

Ap

r-15

Oct-

15

Ap

r-16

Oct-

16

PE Average

6

7

8

9

10

11

12

13

14

15

16

Oct-

08

Ap

r-09

Oct-

09

Ap

r-10

Oct-

10

Ap

r-11

Oct-

11

Ap

r-12

Oct-

12

Ap

r-13

Oct-

13

Ap

r-14

Oct-

14

Ap

r-15

Oct-

15

Ap

r-16

Oct-

16

PE Average


Asian & Emerging Markets Equity Indices Performances

Asian, Emerging Markets & EU Periphery Markets

European Periphery Performances

38

17%

1%

11%

7%

3,5% 2,5%

8,1%

2,3%

ASE CYPRUS CSE PORTUGAL IRELAND


18%

7%

17% 16% 19%

29%

9,9%

-10,6%

-0,7%

11,1% 12,5%

7,9%

Hang Seng MICEX NIKKEI 225 MSCI EM INDIA BRAZIL


• Relative growth in EM is picking up, World Trade

Organisation released its World Trade Outlook

Indicator (WTOI) in February with an increased

reading of 102 vs. November at 100,9

• EM equities have outperformed in Q1 supported by

better growth prospects and fear abating from US

protectionist policies

• Rising commodity prices will benefit EM equity

complex

• We are now less negative (one notch down) on EM

• “Yen sensitive” Nikkei, is down (-0,7%) on a quarterly

basis, as market participants flock into “safe-haven”

Yen. We change our positive view on Japanese

equities to neutral

• European Periphery equity markets were in the

green in Q1, Greece is in positive territory despite

the current bailout standoff

• Cyprus positive, better economic data and country

upgrade, Standard and Poor’s upgraded its

sovereign rating to BB+ with a stable outlook

As at 31-03-2017


Gold Spot

Crude Oil Spot

• Gold’s stellar performance (+7,9%) in Q1,was

mainly driven by the increased geo-political risks

arising from the perception of global protectionist

policies, the rise of populist politics and a weaker

US dollar. We expect gold’s safe-haven status to

continue to support it through Q2, combined with

good demand from Emerging Markets. We keep our

positive view for gold.

• Crude Oil was sold aggressively throughout the

first quarter, falling from a high in Jan of $57,5 per

barrel to $47 per barrel ( -18%), managing to close

the quarter at $50,50 (-9,6%). The price decrease

is attributed to the increase in US crude oil

inventories and increasing US production

capabilities. Going forward, further losses for crude

look limited judging by comments from OPEC

members who are calling for a six-month extension

of the recent production cuts, we retain our neutral

stance.

Commodities

39

900

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

Jan

-15

Ma

r-1

5

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-1

6

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-1

7

20

25

30

35

40

45

50

55

60

65

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17


Baltic Dry

Commodities Index

• The Baltic Dry Index has hit its highest level since

November 2014 buoyed by stronger global growth

forecasts (World Bank forecast global growth 2,7%

in 2017). The BDI Index, supported mainly by its

Panamax component (58% up on a ytd basis)

Trump’s pro-growth policies and specifically

infrastructure spending, has boosted the index this

year. Going forward, caution is advised as the new

US administration’s policy proposals remain

uncertain, along with a repetitive rhetoric on

protectionist measures.

• The Commodities Index has backed off from the

highs at the back end of 2016 to finish the quarter

down 2,7%. The sell-off in the energy complex was

partially offset by the gains in metals, in particular

the 7,9% increase in gold which makes up 11,97%

of the Index. The strongest performers within the

index were Aluminium (+15,5%) and Silver

(+13,6%), whilst the biggest losses came from

Sugar (-12,9%) and WTI Crude Oil (-9,6%).

Commodities

40

20

220

420

620

820

1020

1220

1420

Jan

-15

Ma

r-1

5

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-1

6

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-1

7

60

65

70

75

80

85

90

95

100

105

110

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17


EUR / USD

FX

USD / JPY

• The Euro performed well in Q1 gaining 1,5% vs. the

US dollar, benefitting from a tightening of the spread

between the US 2 Yr yield and the German 2 Yr yield

from a multi-year high of 223 bp down to current

levels at 200 bp. Euro bulls were encouraged by

Fed Chair Janet Yellen’s less hawkish stance

combined with a “less dovish” Mario Draghi as well

as a subsiding of political risk from elections in the

Netherlands and France. Going forward we see the

recent Euro rally faltering towards the 1,10 level to

return back for a test of the yearly lows. We maintain

our negative position for EUR/USD.

• Dollar Yen weakened in the first quarter, with the Yen

appreciating 4,7%, touching the 110 level for the first

time since November last year. The strength in the

Yen has emerged as investors begin to doubt

Trump’s ability to reflate the US economy and a

general cautiousness from Japanese investors

towards foreign assets in general. The BoJ’s Yield

Curve Control policy should keep Yen strength

contained, however any move away from their bond

purchasing programme will have a positive affect on

the currency. We expect the pair to grind lower in the

second quarter caught between US growth

expectations and positive Japanese macro data. We

therefore reduce our position from positive to neutral.

41

0,9

0,95

1

1,05

1,1

1,15

1,2

1,25

Jan

-15

Ma

r-1

5

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-1

6

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Mar-

17

90

95

100

105

110

115

120

125

130

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17


EUR / CHF

EUR / GBP

• The SNB (Swiss National Bank) remains on alert to

intervene in the FX markets at the first sign of any

geo-political event in order to prevent any excessive

strength in the Swiss Franc. The effect on EUR/CHF

trading is reduced volatility and volumes leading to

narrow trading ranges (Q1 range <2%). As long as

there is no change to the status quo we see the pair

holding steady at current levels (1,07), maintaining

our neutral stance.

• EUR/GBP has stabilized during the first quarter as

the market is focused on UK domestic politics,

digesting and analysing the potential impact of

Brexit. Although investors are fixated on “hard” vs.

“soft” Brexit, the only certainties are that neither

outcome can be quantified and negotiating the

multitude of treaties will be troublesome for both

parties. Due to the uncertainty we move EUR/GBP to

neutral from -.

FX

42

0,9

0,95

1

1,05

1,1

1,15

1,2

1,25

1,3

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17

0,6

0,65

0,7

0,75

0,8

0,85

0,9

0,95

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17


Basket / RUB Spot

Dollar Index

• The Ruble has extended its gains seen at the back

end of 2016 into Q1 2017 for a gain of 8,2% vs. the

US dollar. All this against a backdrop of weakness in

the energy markets and a cut in the one-week repo

rate by 25 bp, to 9,75% from Russia’s central bank.

Investors have welcomed the transition from

recession to growth as the economy improves,

current forecasts point to real GDP at 1,1% in 2017

vs. -0,2% for FY 2016. We remain neutral on the

RUB.

Dollar Index Weights

FX

43

30

40

50

60

70

80

90

Jan

-15

Ma

r-1

5

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-1

6

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-1

7

80

85

90

95

100

105

Jan

-15

Ma

r-15

Ma

y-1

5

Jul-1

5

Se

p-1

5

Nov-1

5

Jan

-16

Ma

r-16

Ma

y-1

6

Jul-1

6

Se

p-1

6

Nov-1

6

Jan

-17

Ma

r-17

57,6% 13,6%

11,9%

9,1%

4,2% 3,6%

Euro

Yen

Pound

Canadian $

Swedish Krona

Swiss Franc


This report is intended for informative purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to

buy, any security. It is recommended that investors independently evaluate particular strategies and consult a financial adviser before proceeding to the

purchase or sale of any security or other financial instrument. Note also that past performance may not be a reliable indicator of future results, while financial

forecasts may not be a reliable indicator of future performance.

This report has been compiled based on information obtained from sources we believe to be reliable, but their accuracy, completeness, or correctness

cannot be guaranteed. The opinions contained within the report are based upon publicly available information at the time of publication and are subject to

Change without notice.

The company, and/ or its affiliated companies or persons connected with it and/or directors and/or employees and/or clients may have a position, or engage

in transactions in any of the securities mentioned herein or any related investment, or solicit business from any company mentioned in this report.

Report © Bank of Cyprus. All rights reserved.

Investment Strategy Unit Georgios Lampros, Manager

Tel:22121809

Email:[email protected]

Tasos Hadjinicolaou, Head

Tel:22121853

Email: [email protected]

Dr Marios Soupashis, Senior Officer

Tel:22121848

Email:[email protected]

Achilleas Petrides, Officer

Tel:22121856

Email: [email protected]

44

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