Weekly FX Insight - Citibank Hong Kong
Transcription
Weekly FX Insight - Citibank Hong Kong
Citibank Wealth Management Weekly FX Insight Please note and carefully read the Important Disclosure on the last page Weekly FX Insight Feb 9, 2015 with data as of Feb 6, 2015 Market Review & Focus FX Analysis FX & Eco. Figures Forecast P. 1 - 4 P. 5 - 9 P. 10 - 13 © 2013 Citibank Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited Weekly FX Recap Please note and carefully read the Important Disclosure on the last page Major Currencies Weekly Performance LAST WEEK PERFORMANCE CCY USD EUR/USD USD/JPY GBP/USD USD/CAD AUD/USD NZD/USD USD/CHF GOLD 52 week high 52 week low 1 year % change 17.05% Weekly changes versus US dollar USD INDEX Close Price Day High Day Low 94.70 94.88 93.25 95.53 78.91 1.1316 1.1534 1.1279 1.3993 1.1098 -16.73% 119.12 119.22 116.66 121.85 100.82 -14.28% GBP 1.5243 1.5352 1.4989 1.7192 1.4952 -6.61% CAD 1.2527 1.2773 1.2352 1.2799 1.0621 -11.63% AUD 0.7796 0.7876 0.7626 0.9505 0.7626 -12.98% NZD 0.7363 0.7449 0.7177 0.8836 0.7177 -10.73% CHF 0.9268 0.9347 0.9176 1.0240 0.7406 1233.92 1285.97 1228.47 1392.22 1131.24 -1.93% Source: Bloomberg L.P., as of February 6, 2015 -2.78% -0.11% EUR 0.22% JPY GOLD -1.39% 1.22% 1.61% 0.44% 1.40% -0.72% -3.88% -6.00% -4.00% -2.00% Source: Bloomberg L.P., as of February 6, 2015 0.00% 2.00% USD The USD recovered as U.S. non-farm payrolls came in at 257,000 in Jan and average hourly earnings rose 0.5%, both better than expected. The dollar index edged lower 0.1% to close at 94.70. USD outlook: The dollar index may test higher to 95.86. AUD Although the RBA cut the interest rate by 25bps to 2.25%, the monetary policy statement showed inflation remained inside the target range. The AUD rose from 0.7626 to 0.78 on fading rate cut expectations. AUD/USD rose 0.4% to close at 0.7796 last week. AUD outlook: AUD/USD may consolidate between 0.7626-0.7977. NZD The NZD surged from 0.7177 to 0.74 as the milk powder auction price surged 9% and Q4-2014 employment grew by 1.2%, better than expected. NZD/USD rose 1.4% to close at 0.7363 last week. NZD outlook: NZD/USD may range trade between 0.7177-0.7609. Gold The gold price dropped as fund flowed out of safe-haven assets as global markets rose amid improving market sentiment last week. Spot gold/USD dropped 3.9% to close at $1233.92/ounce last week. Gold price outlook: Spot gold/USD may rise to $1345 gradually 1 Please note and carefully read the Important Disclosure on the last page Weekly FX Strategies 1. Bearish - CAD • The CAD may be undermined in the medium and long term on decreasing Canada’s export competitiveness. • USD/CAD may rise to 1.3065 (5.93) after consolidation between 1.2285-1.2799 (6.356.06) 2. Bullish – GBP • The GBP may outperform due to strong U.K. fundamentals. • GBP/USD may test higher to 1.5410 (11.95). 3. Neutral – AUD • The AUD may be restrained as the RBA may cut rates in April on expectation of weak job data released this week. • AUD/USD may range trade between 0.7626-0.7977(5.91-6.18). 2 Weekly FX Focus 1: Please note and carefully read the Important Disclosure on the last page The USD may be underpinned amid U.S. strong job data • Non-farm Payrolls came in at 257K, increasing the average level over the last 12 months by 1400 to 267K. In addition, average hourly wage reversed the decline in Dec 2014, reflecting wage is rising gradually, which may underpin the USD. Chart 1: Non-farm Payrolls – 3-month Average (million) Red line: 1 Million • Strong job growth: Nov and Dec 2014 figures were both revised up by 147K and the average over the last three months reached 1 million (Chart 1), which was a rare case and reflected strong job growth. It might drive consumer spending up significantly in Q4 last year. • Average wage growth rebounded: Average hourly wage dropped 0.2% in Dec 2014, fueling concerns that it might become a barrier of rate hikes by the Fed. However, average hourly wage rose 0.5% in Jan, a record high, driving the yearly growth up from 1.7% to 2.2%. • Consumer Spending may be supported: U.S. real household income (ex-inflation) may grow 1%, reflecting U.S. job grew 257K, weekly working hours rose to 34.6 hours and average wage rose 0.5% while gasoline prices plunged. Rising purchasing power may support U.S. consumer spending in the coming months. Source: Citi, as of February 6, 2015 Chart 2: Dollar Index – Weekly Chart 97.95 (6-12 month forecast) • Bullish on the USD (Chart 2): The dollar index may rise to 97.95 gradually for the coming 6-12 months after breaching a resistance level at 92.63. Source: Bloomberg L.P., as of February 6, 2015 3 Weekly FX Focus 2: Please note and carefully read the Important Disclosure on the last page The CAD may be undermined amid decreasing export competitiveness • Recent CAD strength does not suggest an improved outlook in Canada. The negative impact from weaker oil prices has yet to fully appear. Canadian data have just begun to weaken. The CAD may resume downtrend upon consolidation. Chart 3: Citi Economic Surprise Index - Canada • Economic data missed expectations: Oil prices dropped about 50% last year. The negative impact from weaker oil prices has yet to fully appear. According to Citi Economic Surprise Index (Chart 3), Canadian index has just started to drop, reflecting worse-than-expected economic data began to increase and may further deteriorate. • Decreasing export competitiveness: The U.S. is the largest trading partner of Canada. Canada has been losing market share in the U.S. in recent years. Since 2004, Canadian non-oil export volumes are virtually flat while US import volumes have essentially doubled (Chart 4). Source: Citi, as of February 6, 2015 Chart 2: Canada has been losing market share in the U.S. U.S. Non-Oil Import Index • The CAD may need to depreciate: Canadian exports are lagging growth of the US market. This stagnation of Canadian exports makes us think that CAD depreciation will not generate the expected impact on activity until CAD falls a lot further. • Bearish on the CAD: We expect USD/CAD may rise to 1.30 or above after consolidation in the medium and long term. Canada’s Non-Oil Export Index Source: Citi, as of February 6, 2015 4 USD/CAD Please note and carefully read the USD/CAD may test higher to 1.2799-1.3065 (6.06-5.93) Important Disclosure on the last page upon consolidation The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.7530 exchange rate for reference Last Price 1.2527 (6.19) Last wk High Last wk Low 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3m Forecast 6-12m Forecast 1.2773 (6.07) 1.2352 (6.28) 1.1956 (6.48) 1.2202 (6.35) 1.2799 (6.06) 1.3065 (5.93) 1.19 (6.52) 1.25 (6.20) Upcoming Economic Data Fed 9: Housing Starts Market Recap: The CAD recovered as oil prices rebounded amid optimism that oil supply may decrease as several oil companies said to cut capital investment significantly and rig counts decreased. 1.3065 (2009 top) 1.2202 (fibo 0.764) CAD Outlook: Recent decreases in rig counts concentrated on the category with lower oil production capacity. It may not be able to reverse the over-supply situation. Oil prices may remain weak in the medium and long term. Falling oil prices may seriously affect Canada's trade income and inflation, which triggered the BoC to cut the interest rate 25bps. We expect the low interest rate policy may remain until Q3 2016 while the Fed may hike rates this year due to strong U.S. economy. The divergence of monetary policy may undermine the CAD. 1.2799 (Jan top) 1.1956 (10MA) Technical Analysis: USD/CAD may test higher to 1.2799-1.3065 (6.06-5.93) upon consolidation. Source: Bloomberg L.P., as of February 6, 2015 5 GBP/USD Please note and carefully read the Important Disclosure on the last page GBP/USD may test higher to 1.5410 (11.95) The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.7530 exchange rate for reference Last Price 1.5243 (11.82) Last wk High Last wk Low 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3m Forecast 6-12m Forecast 1.5352 (11.90) 1.4989 (11.62) 1.4814 (11.49) 1.4952 (11.59) 1.5410 (11.95) 1.5808 (12.26) 1.53 (11.86) 1.47 (11.40) Upcoming Economic Data Feb 10: Manufacturing Production Feb 12: BoE Inflation Report Market Recap: The GBP was supported as U.K. manufacturing and services PMIs came in at 53.0 and 57.2 in Jan, better than expectations of 53.0 and 57.2. GBP Outlook: Strong PMIs reflected low oil prices and rising wage are supporting U.K. economy. Markets focus on the inflation report released on Thursday. The BoE may remain bullish on the U.K. economy and may revise down its unemployment forecasts, which may support the GBP. Although dropping oil prices may trigger the BoE to downgrade its short-term inflation forecasts, it may not affect medium-term inflation forecasts. The BoE may even upgrade medium-term inflation forecasts amid strong jobs market and low interest rates. 1.5410 (55MA) 1.5808 (fibo 0.382) 1.4952 (Jan low) Technical Analysis: GBP/USD may test higher to 1.5410 (11.95) gradually, with support at 1.4952(11.59). Source: Bloomberg L.P., as of February 6, 2015 6 AUD/USD Please note and carefully read the AUD/USD may range trade between 0.7626Important Disclosure on the last page 0.7977(5.91-6.18) The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.7530 exchange rate for reference Last Price 0.7796 (6.04) Last wk High Last wk Low 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3m Forecast 6-12m Forecast 0.7876 (6.11) 0.7626 (5.91) 0.7268 (5.63) 0.7626 (5.91) 0.7977 (6.18) 0.8295 (6.43) 0.82 (6.36) 0.72 (5.58) Upcoming Economic Data Feb 12: Employment Change Feb 12: Unemployment Rate Market Recap: Although the AUD once dropped to 0.7626 as the RBA cut the interest rate by 25bps, the monetary policy statement was less dovish than expected, triggering the AUD to rebound from lows. AUD Outlook: Citi analysts expect dropping commodity prices may reduce trade profitability, which may trigger the RBA to cut the interest rate by 25bps in Apr. It may undermine the AUD. Since Australian interest rate is still relatively attractive and foreign funds flow into equity markets , which may trigger the RBA to push down the AUD by rate cuts in order to boost the economy. Pay attention to job data released on Thursday. If the unemployment rate rises significantly, the AUD may cut rates earlier in Mar, which may pressure the AUD. 0.8295 (Jan top) 0.7977 (20MA) 0.7626 (Last week low) Technical Analysis: AUD/USD may range 0.7626-0.7977(5.91-6.18). trade between Source: Bloomberg L.P., as of February 6, 2015 7 Please note and carefully read the Important Disclosure on the last page NZD/USD The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.7530 exchange rate for reference Last Price Last wk High Last wk Low 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3M 6-12M 0.7363 (5.71) 0.7449 (5.78) 0.7177 (5.56) 0.6948 (5.39) 0.7177 (5.56) 0.7609 (5.90) 0.7765 (6.02) 0.77 (5.97) 0.67 (5.19) The NZD may be undermined as cooling inflation may defer rate hikes by the RBNZ to Q2 2016 Weekly recap: Although NZ unemployment rate rose from 5.4% to 5.7% in Dec, the NZD rose last week as employment grew 3.5% YoY and milk auction prices surged. Outlook analysis: The NZD may be supported at lows amid strong job data and as RBNZ governor Wheeler said medium-term core inflation may remain at the target level, which cooled rate cut expectations. However, the NZD may be restrained as the RBNZ may defer rate hikes to Q2 2016. Technical analysis: NZD/USD may consolidate inside 0.71770.7609 (5.56-5.90) since the RSI is turning up from the oversold region. NZD/USD – Daily Chart 0.7765 (100MA) 0.7609 (Last Dec low) 0.7177 (Last week low) Source: Bloomberg L.P., as of February 6, 2015 EUR/USD Last Price Last wk High Last wk Low 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3M 6-12M 1.1316 (8.77) 1.1534 (8.94) 1.1279 (8.74) 1.0765 (8.35) 1.1098 (8.60) 1.1534 (8.94) 1.1640 (9.02) 1.15 (8.92) 1.10 (8.53) The EUR may be undermined as the ECB may need to expand QE in the medium and long term Weekly recap: The EUR paired gains as the ECB no longer accepted Greek bonds as collateral, although the EUR once rose due to Greek debt swap plan. Outlook analysis: In the medium term, although the ECB implemented 1.1 trillion euros worth of bond purchase program, the scale is not large enough to support the inflation. Thus, the ECB may need to expand QE, which may undermine the EUR. Increasing Greek default risks may also pressure the EUR. Technical analysis: EUR/USD may test lower to 1.1098 (8.60) upon consolidation in the short term since the RSI rebounded from lows. A breach may send the pair further down to 1.0765 (8.35). EUR/USD – Daily Chart 1.1470-1534 (20MA & last week top) 1.1098 (Jan low) 1.0765 (Sep 30, 2009 low) Source: Bloomberg L.P., as of February 6, 2015 8 Please note and carefully read the Important Disclosure on the last page USD/JPY Last Price Last wk High Last wk Low The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.7530 exchange rate for reference 2nd Support 1st Support 1st Resistance 2nd Resistance 0-3M 6-12M 119.12 119.22 116.66 113.52 115.57 120.83 121.85 116 130 (65.09) (65.03) (66.46) (68.30) (67.08) (64.16) (63.63) (66.84) (59.64) The JPY may drop in the medium and long term as the BoJ may expand QE in Jul Weekly recap: The JPY was pressure on strong USD as U.S. NFP grew 257K in Jan, better than expectations of 228K and average hourly wage even grew 2.2% YoY. Outlook analysis: Although falling oil prices benefit the economy, inflation downside risks also increase, which may force the BoJ to expand QE in Jul. Moreover, funds may flow out of Japan as GPIF increases holdings of foreign assets, which may undermine the JPY in the medium and long term. Technical analysis: USD/JPY may range trade between 115.57120.83 (67.08-64.16), with upside bias. USD/JPY – Daily Chart 120.83 (Dec, 23 2014 top) 121.85 (Last Dec top) 115.57 (Last Dec low) Source: Bloomberg L.P., as of February 6, 2015 USD/CNY Last Price Last wk High Last wk Low 0-3M 6-12M 6.2446 6.2604 6.2373 6.22 6.30 The CNY may be underpinned as falling oil prices may increase China's trade income Weekly recap: The CNY rebounded from lows last week as the PBoC suddenly cut the RRR 50 bps, fueling optimism that the RRR cut may underpin the investment sentiment. Outlook analysis: Citi analysts expect the CNY may be restrained as the PBoC may cut the RRR 2-3 times this year and may cut the interest rate 25bps this month. Although continuous falling oil prices may increase China's trade income, which may underpin the CNY, the government may push down the CNY as a policy tool due to low inflation and high corporate debts. USD/CNY – Daily Chart 6.30 (6-12 month forecast) 6.22 (0-3 month forecast) Long-term forecast: 6.10 Source: Bloomberg L.P., as of February 6, 2015 9 Upcoming Economic Figures and Events The AUD may be undermined amid Australian job data Please note and carefully read the Important Disclosure on the last page January retail sales U.S. Retail sales may remain weak in January due to a drop of 17% in gasoline prices. In particular, consumers did not spend what they save from dropping gasoline prices. Citi analysts expect a similar case in Jan. January job data Australia Following strong labour market prints last two months, we expect employment in Jan could fall 15K and could see the unemployment rate either steady or up slightly to 6.2%. December 2014 manufacturing production New Zealand Some manufacturing-related surveys showed manufacturing production growth may remain strong. Citi analysts expect the figure to grow 0.3% in Q4 last year, the seventh straight quarterly expansion. January CPI China Lower oil prices, weak domestic demand and base effect may have lowered the CPI inflation from 1.5%YoY in Dec-14 to 0.8%YoY in Jan, the lowest level since the global financial crisis. To avoid a tightening of the credit conditions, PBOC will likely cut benchmark rates by 25bps as early as this month February 12 (Thur): Retail sales Citi forecast Prior -0.90% -0.90% February 12 (Thur): Unemployment rate Citi forecast Prior 6.2% 6.1% February 12 (Thur): Manufacturing Production Citi forecast Prior 0.3% 0.7% February 10 (Tue): CPI (YoY) Citi forecast Prior 0.80% 1.50% 10 Appendix 1: Citi Interest Rate and FX Forecast for 2015 Please note and carefully read the Important Disclosure on the last page Citi FX Outlook Forecast Dollar Index EUR/USD GBP/USD USD/JPY USD/CHF AUD/USD NZD/USD USD/CAD USD/CNY 0-3 month 92.54 1.15 1.53 116 0.83 0.82 0.77 1.19 6.22 Source: Citi, forecast as of Jan 16, 2015 EUR GBP AUD NZD JPY 6-12 month 97.95 1.10 1.47 130 0.95 0.72 0.67 1.25 6.30 Forecast downgraded Citi FX Interest Rate Forecast 1/30/15 0.25 0.05 0.50 0.10 -0.75 2.25 3.50 0.75 2.75 Forecast upgraded 1Q ’15 0.25 0.05 0.50 0.10 -1.50 2.25 3.50 0.75 2.50 Rate cut expectations 2Q ’15 0.25 0.05 0.50 0.10 -1.50 2.00 3.50 0.75 2.25 3Q ’15 0.25 0.05 0.50 0.10 -1.50 2.00 3.50 0.75 2.25 Rate hike expectations Since weak EUR may be one of the major ECB's objectives and the ECB may implement additional easing, Citi analysts expect the EUR may consolidate at 1.15 for the coming 0-3 months and may drop to 1.10 in the medium and long term and parity may be approached in the coming two years. GBP could be supported in the near term by a still strong economy and possible rate hikes in 2016 Q1. GBP/USD may stabilize at 1.53 for the coming 0-3 months. But political risk premia may rise further out and U.K. is facing the serious twin fiscal/ current account deficits, which may undermine the GBP. Thus, Citi analysts expect the GBP to test lower to 1.47 for the coming 6-12 months. The AUD may be further undermined due to strong USD, larger-than-expected speed and magnitude of decreases in commodity prices and further deterioration of terms of trade. We expect the AUD to hover around 0.82 for the coming 0-3 months and drop to 0.72 for the coming 6-12 months. Since the RBNZ may defer rate hikes to Q2 2016 and commodity prices keep falling, which may be NZD-negative. We expect the NZD to hover around 0.77 for the coming 0-3 months and drop to 0.72 for the coming 6-12 months Since the BoJ may expand QE and GPIF is reallocating its portfolio, Citi analysts expect USD/JPY to test higher to 130. 11 Appendix 2: Last week’s Economic Figures Please note and carefully read the Important Disclosure on the last page Time Importance Event Period Actual Survey Prior Jan 51 51 51 Monday 02/02/2015 17:00 EC !! Markit Eurozone Manufacturing PMI 02/02/2015 17:30 UK !! Markit UK PMI Manufacturing SA Jan 53.0 52.7 52.7 02/02/2015 21:30 US !! Personal Income Dec 0.30% 0.20% 0.30% 02/02/2015 21:30 US !! Personal Spending Dec -0.30% -0.20% 0.50% 02/02/2015 23:00 US !! ISM Manufacturing Jan 53.5 54.5 55.1 Tuesday 02/03/2015 08:30 AU ! Trade Balance Dec -436M -850M -1016M 02/03/2015 11:30 AU !!! RBA Cash Rate Target Feb 2.25% 2.50% 2.50% Wednesday 02/04/2015 05:45 NZ !! Unemployment Rate 4Q 5.70% 5.30% 5.40% 02/04/2015 21:15 US !! ADP Employment Change Jan 213K 220K 253K 02/04/2015 23:00 CA ! Ivey Purchasing Managers Index SA Jan 45.4 53.4 55.4 02/04/2015 23:00 US ! ISM Non-Manf. Composite Jan 56.7 56.4 56.5 Thursday 02/05/2015 08:30 AU ! Retail Sales MoM Dec 0.20% 0.30% 0.10% 02/05/2015 20:00 UK !! Bank of England Bank Rate Feb 0.50% 0.50% 0.50% 02/05/2015 21:30 CA !! Int'l Merchandise Trade Dec -0.65B -1.10B -0.34B 02/05/2015 21:30 US !! Initial Jobless Claims Jan 278K 290K 267K 02/05/2015 21:30 US ! Trade Balance Dec -$46.6B -$38.0B -$39.0B 02/06/2015 08:30 AU !!! RBA Statement on Monetary Policy Feb 02/06/2015 17:30 UK !! Trade Balance Dec -£2895 -£1700 -£1841 02/06/2015 21:30 CA !! Unemployment Rate Jan 6.60% 6.70% 6.60% 02/06/2015 21:30 CA !! Net Change in Employment Jan 35.4K 5.0K -4.3K Friday 02/06/2015 21:30 US !!! Unemployment Rate Jan 5.70% 5.60% 5.60% 02/06/2015 21:30 US !!! Change in Nonfarm Payrolls Jan 257K 228K 329K Source: Bloomberg L.P. 12 Appendix 3: Upcoming Economic Figures (Feb 9, 2015 – Feb 13, 2015) Please note and carefully read the Important Disclosure on the last page Time Importance Event Period Actual Survey Prior Jan Feb Jan Jan ----- ---5.0K 6.20% 2 2.40% 37.4K 6.10% Jan -- 184.0K 180.6K Jan -- 1.00% 1.50% 4Q -- 0.80% 0.80% Dec -- -¥470.0B -¥636.8B Jan -- -- 57.7 Jan -- -0.50% -0.30% Dec Dec Jan Feb Dec ---- 0.20% --- -0.10% 0.70% 11% -- -- -2.00% Jan Jan Jan Feb Feb ------ -$2.6B -0.40% -0.40% -98.1 --0.90% -1.00% 278K 98.1 Australia 02/10/2015 08:30 02/11/2015 07:30 02/12/2015 08:30 02/12/2015 08:30 Tue Wed Thur Thur ! ! !! !! NAB Business Confidence Westpac Consumer Conf SA MoM Employment Change Unemployment Rate Canada 02/09/2015 21:15 Mon ! Housing Starts China 02/10/2015 09:30 Tue !!! CPI YoY 02/13/2015 18:00 Fri !! GDP SA YoY 02/09/2015 07:50 Mon ! Trade Balance BoP Basis Europe Japan New Zealand 02/12/2015 05:30 Thur ! BusinessNZ Manufacturing PMI Switzerland 02/10/2015 16:15 Tue !! CPI YoY 02/10/2015 17:30 02/10/2015 17:30 02/12/2015 08:01 02/12/2015 18:30 02/13/2015 17:30 Tue Tue Thur Thur Fri !! !! !! !!! ! Industrial Production MoM Manufacturing Production MoM RICS House Price Balance Bank of England Inflation Report Construction Output SA MoM 02/12/2015 03:00 02/12/2015 21:30 02/12/2015 21:30 02/12/2015 21:30 02/13/2015 23:00 Source: Bloomberg L.P. Thur Thur Thur Thur Fri !! !!! !!! !! !! Monthly Budget Statement Retail Sales Advance MoM Retail Sales Ex Auto MoM Initial Jobless Claims U. of Mich. Sentiment U.K. U.S. 13 Important Disclosure For any enquiries, please call (852) 2860-0333 This document is based on information provided by Citigroup Investment Research, Citigroup Global Markets, and Citigroup Global Wealth Management. It is provided for your information only. It is not intended as an offer or solicitation for the purchase or sale of any security. Information in this document has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the information, consider its appropriateness, having regard to their objectives, financial situation and needs. Any decision to purchase securities mentioned herein should be made based on a review of your particular circumstances with your financial adviser. Investments referred to in this document are not recommendations of Citibank (Hong Kong) Limited (“Citibank”) or its affiliates. Although information has been obtained from and is based upon sources that Citibank believes to be reliable, Citi analysts do not guarantee its accuracy and it may be incomplete and condensed. All opinions, projections and estimates constitute the judgment of the author as of the date of publication and are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Past performance is no guarantee of future results. The document is not to be construed as a solicitation or recommendation of investment advice. Subject to the nature and contents of the document, the investments described herein are subject to fluctuations in price and/or value and investors may get back less than originally invested. Certain high-volatility investments can be subject to sudden and large falls in value that could equal the amount invested. Certain investments contained in the document may have tax implications for private customers whereby levels and basis of taxation may be subject to change. Citibank does not provide tax advice and investors should seek advice from a tax adviser. Investment products: (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations of any insured depository institution (including Citibank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested. Citi Foreign Exchange: Forecasts are a joint venture between Citi’s foreign exchange, global macro and technical strategy groups and our developed and emerging markets economists. Under normal circumstances, we expect to present Forecasts on a monthly schedule although we may offer intra month updates if circumstances dictate. Technical Trend: All views, opinions and estimates derived from CitiFX Technicals (i) may change without notice and (ii) may differ from those views;, opinions and estimates held or expressed by Citi or other Citi personnel, including Citi Foreign Exchange: Forecast. Should CitiFX Technicals not cover any major currency pairs, the indication of short-term technical "bullish", "bearish", or "neutral" trends will be based on the result of analysis with various widely known short-term technical analysis tools, namely RSI, MACD, fibonacci, stochastics, bollinger bands, and simple moving averages. 14