From: "Barrett, Paul S"

From: "Barrett, Paul S" To: Brad Wechsler CC: Barrett Team r "Jeffrey Epstein stein (j eevaeation(ifigmail.com)" <jeevacationggmail.com>, "Rich inslin Subject: An example Taiwan 2Q GDP -6.5%; exports fell 8.32% Date: Fri, 14 Aug 2015 16:01:46 +0000 Attachments: enewtotal I 0408.pdt, JPM_Taiwan_2Q_GDP_weake_2015-08-14_1793170(1).pdf Inline-Images: image] image2.gif; image3.gif; image4.gif; image5.gif; image6.gif; image7.gif; image8.git, image9.git, image002.jpg; image005.jpg Brad When we get the balance sheet and ISDA done, we will likely want to short some Asian currencies (unless they move much lower from here). See the Taiwan data below. Paul Taiwan came out with its preliminary Q2 GDP data last night and the numbers were weaker than expected. (Q2 GDP @ -6.56% pace!) CHART ONE: GDP Contracted at a -6.56% pace in Q2. That was the worst number in almost six years. CHART TWO: recession. Exports for Q2 declined at a 4.32% pace. Also the worst number since the last EFTA01206033 kTWNGDPQ U 2.7378 As of 8/14/2015 03/31/2015 10 30 1M 6M YTO lY Ill.morApoulm...“mpAnznn 5Y Max Quarterly • Description taiwan gdp qoq saar Owner DANIEL PERLMAN 96) Actions - 97) Edit - G 2871 - taiwan gdp qoq saar ::) Compare Local CCY p +, 1► 3, Security/Study Pa CG 0 Traci r Wow. • Mews . 20an Taiwan: Real GDP QoQ % (saar) , 1191 '801'899'•M! •87I '!!' VIlo,m. 92193.'94: 9s 1). .. .... ..... .. .. .. 78 xnwwww il uvR is 2015 Q2 GDP -6.56% QoQ saar 8110 30 20 010 .10 EFTA01206034 4 ► 1W Nom GOP Ex. SA IR% Exilits Index • G - Related Functions Menu z: Msg: .120 et k. r. 0. ? TNGEEXQR -1.75 As Of 03/31/15 % Taiwan Nominal GDP b Ex enditures SA I... Taiwan Directorate General of .. . TNGEEX R Index 09/30/1985 1D 3D III 611 YID IY TNGEEXQR Index - Last Price -1.75 08/14/2015 9 cttons Er t G 2876 - taman exports "I 41 re 1-e. 0 11 Compare 5Y Max Quarterly • ♦ Track Anrctate Y HewS 0, ROM Ni: ' • Local CCY Security/Study MN Taiwan: Exports YoY% iiiii 15 10 S 1.75 -S 2.015 Q2 YoY% Exports -8.32% Low: -22.13 '86 '87 '88 '89 '9 1 '92 '93 '95 '96 '97 '98 '99 '09 '1'1 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 'IS -10 -15 -20 -25 Source: Bloomberg 14Aug2015 Paul Barrett I Managing Director I Global Investment Opportunities Group I J.P. Morgan Securities LLC I J.P. Morgan Private Bank I J.P. Morgan Chase Bank NOT AN OFFICIAL CONFIRMATION: For informational purposes only. This report does not represent an official account of the holdings, balances, or transactions made in your account and is being provided at your request. Please refer to your monthly account statement for the official record of all of your account activities. For question, please call your J.P. 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J.P.Morgan Asia Pacific Economic Research Taiwan: 2Q GDP weakened notably, main drag coming from the export sector, especially tech Taiwan's 2O15 real GDP growth slowed notably to 0.52%oya (compared to the advanced reading of 0.64%). following the upwardly-revised growth at 3.84%oya in 1O (previously: 3.37%). The Directorate General of Budget, Accounting and Statistics (DGBAS) estimates that, seasonally-adjusted, real GDP contracted 6.56% qlq, sear In 2O15, following the positive growth at 2.3% q/q saar in 1O. EFTA01206035 Breakdown of 2O GDP by expenditure highlights that the notable contraction in the economy (In %qlq saar terms) was mainly dragged by export sector weakness (especially for tech products). On the domestic front. GDP expenditure data showed decent growth in private consumption in 2O. though GDP industry data suggested that consumption-related sectors. such as wholesale and retail trade, remained subdued. Meanwhile. fixed investment growth rebounded decently in 2O. which may hint at some potential moderate recovery for the economy going into 2H15. Watching for signs of 2H15 improvement in external demand The significant weakness in Taiwan's 2O GDP. with the most severe quarterly GDP contraction (in %qlq sear terms) since the worst moments of the global financial crisis, was mainly dragged by the export and manufacturing sectors. with the notable underperformance of the tech sector (tech IP fell significantly at 34.5% 3m/3m saar in June). Looking ahead, on the external front, our global team continues to expect stronger global growth in 2H15. which will hopefully provide some support for moderate recovery in Taiwan's export and manufacturing sector. In this regards. it is with noting: (1) Taiwan's July exports improved moderately (up 3.2% nVm sa in real terms): (2) tech exports. following the significant weakness in 2O, rebounded 7.7% m/m sa in July: (3) capital goods imports rose notably at 93.6% mlm sa and 13.2% nVm sa in July and June respectively, suggesting decent expansion in corporate capex. which in turn hints at some moderate recovery in export and manufacturing sectors in coming months. On the domestic front. it is worth noting that the slowing in industrial activity through 2O seemed to have gradually fed into the labor market, with employment growth losing momentum lately (In % m/in sa terms. total employment stopped growing in June). which could restrain private consumption outlook going into 2H15. Overall, our forecast for Taiwan's full-year 2015 GDP growth now stands at 1.3%oya. assuming moderate recovery in the sequential growth trend to average at about 3.0% q/q sear in 3O and 4O. Meanwhile, regarding monetary policy, considering the notable weakness in latest macro data, the possibility of a potential policy rate cut, sometime during 2H15, seems to be on the rise. Besides, as the major source of recent macro weakness largely originated from the external sector, managing currency competitiveness would be an important policy tool going ahead. For further details of the 2O GDP report. looking at the major GDP expenditure components: • Total exports of goods and services contracted notably by 16.5% q/q sear in 2O, compared to the modest expansion at 1.7% q/q saar in 1O. (In particular. monthly trade data suggested the tech sector was the main drag on 2O export weakness, as tech exports contracted 27.0% 3m/3m saar in June.) • Imports of goods and services expanded moderately at 3.0% q/q saar in 2O, following the contraction at 5.5% q/q saar in 1O (reflecting the notable rebound in 2O domestic fixed investment). • On the domestic front, private consumption expenditure rose 3.0% qlq saar in 2O. following the solid gain at 4.1% gig saar in 1O. • Gross fixed capital formation rebounded rather notably by 26.8% q/q sear in 2O, following the contraction at 13.1% qlq sear in 1O. Regarding GDP details by industry: • Manufacturing production contracted 13.4% q/q saar in 2O, following the moderate gain at 2.2% q/q sear in 1O. • With regard to domestic service sectors, wholesales and retail trade, which is closely related to private consumption expenditure. contracted 5.1% q/q saar in 2O, following the decline at 3.4% q/q sear in 1O. • Real estate activity rose modestly at 1.2% q/q saar in 2O. following the modest gain at 0.5% q/q saar in 1O. • Finance and insurance services expanded significantly at 12.9% gig saar in 2O. adding to the gain at 17.6% gig sear in 1O. • In addition. construction activity contracted 5.3% q/q saar in 2O, adding to the decline at 4.2% q/q sear in 1O. Taiwan real GOP growth 2014 3014 4014 MI5 28115 %ova Reel GDP 38 43 35 38 05 %vele calswevlial 30 38 24 3.8 2.9 Govenurent ccosurracd 37 39 4.3 3.9 0.0 Gross mad temeeon 1.8 48 00 .0.2 1.3 Exports et wals & sea. 5.9 76 6.5 6.1 4.3 rpm d von 8 serv. 5.8 92 6.1 2.7 2.2 Tigiq, SIM Red GDP 61 19 2.3 .5 .6 Pnvercmwrmfai 25 20 4.1 3.0 Governrred ccomm*e 4.6 11 8.8 5 7 Goss acal temeccn 166 4.5 -13.1 26.8 Exxds or goods & sev. 92 44 1.7 46.5 wows droll 6 &ay. 9.7 28 .5.5 3.0 Source: DGBAS blown: red GDP growth %caidige 15 %c WI, mar If \ 5 .5 .11 11 11 12 13 14 15 16 Source: DGBAS EFTA01206036 48 Taiwan: contribution to GDP growth %-pcceatulal la MaineWaysowe 3 Private consumption 2 0 .1 -2 .3 Net exports 2012 2013 2014 2015 Sow 6: DGBAS 12 13 14 15 08 09 11 11 Source. DGBAS. JP Moigan Taiwan: real GDP and IP %do SW, ball SOWS 15 10 - S 0 .10 Reoi GDP 2011 2012 2013 2014 2115 Source: DGBAS.1AoCA. J PlAo/gon 20 15 10 5 0 -5 .11 1 Global manufacturing PIAI and Taiwan real export growth 4.67. :e• Sta. Global maniac-1ln% Pall 58 • output 64 Taiwan export cobalt 14411414 by export prices) 40 2011 2012 2013 2014 2015 Source: MoF. DGBAS. Manw. J.P.Morgan Taiwan:tech exports and capital goods imports %.5m13en see 30 20 10 0 .10 -20 30 2013 • 2014 • 2015 • 2016 Gagital goods Tech capon, impose peados by 6-mootfol. Source: MGR J.P.1.1070an 100 . 75 -50 21 0 25 se 20 0 21 -4 EFTA01206037 Taiwan real labor income and private consumption `eye. Real pnweeccrourctim 5 expendthre Real labor 4 mcome 3 2 0 2011 2212 2413 201a 2045 Source: DGBAS. J.P.Moroan Click figut for the full Note and disclosures. JPMorgan Chase Bank, NA, Hong Kong 101 JPMorgan Chase Bank, NA., Hong Kong Ma I P Mormon Market-, for more nustebleadIng research ad Mandel solutions across the Ml trade and investment lifecycie. 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