EFTA01379451

11 December 2017 Special Report: EMFX Outlook 2018: Growth.led Revaluation Conclusion: Answering 4 key questions What Is the view on broader EM FX for 2018? We believe EM FX can perform well for the remainder of 2017 and in 2018. This is based on the following factors: EM FX valuations are still attractive; 2 , There is room for further EM inflows (particularly into equities); Higher, more synchronized growth and narrowing gaps are supportive for EM currencies; EM's external vulnerabilities have reduced, and are far lower than in 2013. We divide our prospective longs into three categories: - currencies that have stronger buffers/fundamentals and hence should be able to perform in a broad range of external environments (even more difficult ones); these include RUB. BEL , JP; and KFIW; 2) Idiosyncratic revaluation longs HUE UP, and PEN; S) Wild cards - currencies dependent on specific sources of risk - the falls in this camp with substantial room for appreciation in a positive scenario. On the other hand %I el seems poised for a significant bout of weakness in the event its negative risks materialize. Which specific, EM currencies stand out &I vulnerable We we bearish on COP. MR. :ad R due to either domestic concerns, valuations or external vulnerabilities. tit FiV trtoTh., We like the 'good vs. bad EM' commodity RV trade of long RUB and BRL vs. short COP. Orausio Giacomelk New York Sebastkin A Brown, New York, Sameer Gael, Singapore, Gautam Kalani, London, +4 Page 10 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0076929 CONFIDENTIAL SDNY_GM_00223113 EFTA01379451