From: Vinit Sahni al

From: Vinit Sahni al l> To: [email protected] Cc: Tazia Smith < , Paul Morris a>, Nail Gupta Subject: Jeffrey - quick update on Mexico and markets Date: Fri, 24 Jan 2014 11:25:48 +0000 Inline-Images: unnamed; unnamed(1) Classification: For internal use only Jeffrey - quick update, market is long and hurting here. EM driving a risk off move here. Positioning is very skewed here and there is pain on the street in Credit, Equities, Rates and FX. Itraxx main has moved 8bps today from the tights (73 to 81) and liquidity has dried up in credit spreads !!! 1) think MXN bonos still best EM risk there, however correlations in EM are moving up. Chart of Ashmore stock below reflects sentiment in EM (probably one of the best EM funds out there). The MXN bond as moved about 10bps in yield and all EM ccys breaking out, driven by Turkey, USDMXN about 3% weaker since we traded. Net Net we are down around 3.5-4%, as the around 3% on ccy and 1% on bond (using last nights bond prices) 2) Depending on how much risk u have in EM, we need to look at how we want to trade this. If ure exposure to EM v low, we can hang in and take some pain as it will be volatile. Market is unwinding leverage, $/JPY much lower, EM ccys wider, financials weaker, Nikkei lower, credit spreads wider all etc. The potential China trust product default end of month spooking people here. 3) In EM space Turkey is leading this move - potential mis-steps from the central bank risks leaving it with too few USD reserves. The contagion channel to other markets is investors who see TRY/BRL/ZAR cheapening and sell their broader EM holdings into DM as we saw yesterday. Until yesterday EM was weakening in a vacuum. It seems to me that right now Turkey is the epi-center of the EM storm. Ukraine, Argentina and China (ICBC trust default Jan31) all add event risk. EFTA01154654 ASHM LN GBp a At 4:06 d Vol 417 , 585 ASHIQI LN Equity 01/11/2013 01/24/2014 Last Price PI Line A I? 3? 111 c4 .1? I. 5 t: Daily • _334.30/334.90L 203 > 1247 335.40 - 338.90! L 332.60_ Prey 344.00 91) Edit 'Mae Table 99 Save As 9( Actions - \vki\„,„ :Al Last Price 335.00 - T High on 05/17/13 433.00 Average 376.173 1 Low on 07/05/13 323.90 Ii Line Chart M Gap M Volume M r:\ en-. 440 420 400 .380 0.360 Pio 320 • Volume 0.41EN 10 SMAVG (1S) 1.90M Jan Feb Mar Apr May Jui Aug Sep Oct Nov Dec Jan 2013 2014 Australis 61 2 9777 8600 Brazil 5511 3048 4500 Errape 44 20 7330 7500 Germony 49 69 9204 1210 Hong Kong 852 2977 6000 Japan 81 3 3201 8900 Singapore 65 6212 1000 U.S. 1 212 318 2000 Copyright 2014 Bloomberg Finance SH 812823 EST GMT-5:00 H471-3637-0 24-Jan-2014 04.26:41 k 6M ;Sum Any proposed ideas are being delivered to you by the DeAWM Key Client Partners ("KCP') London desk for discussion purposes only. and do not create any legally binding obligation on the pad of Deutsche Bank AG and / or its affiliates ("DB1. These ideas are for the consideration of the intended recipients of this mail only. The KCP London desk does not provide investment advice. All intended recipients are Professional investors (as defined by MiFID). who understand the strategy. characteristics and risks associated with any ideas proposed herein and will be able to evaluate it independently. All trades on proposed ideas shall be subject to the relevant internal approvals prior to execution. Panitn,l-rxPeefonn. This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and delete this e-mail. My unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. Please refer to http:/twww.db.com/en/content/eu_disclosures.htm for additional EU corporate and regulatory disclosures. EFTA01154655