FINCOR – Sociedade Corretora, S.A.

Weekly Markets

Perspectives

September 10th, 2012

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said content or about any resulting effect that could have occurred.

-Draghi announced the Outright Monetary

Transactions Program (OMT). Within it, the ECB will

define a target to Yields and if that value is exceed

they will intervene buying bonds on secondary

market. To apply to the program, each country

needs to implement reforms ands define financial

targets.

-Bonds will have a maturity between 1 and 3 years,

to guarantee that the ECB isn’t financing a State as it

goes against its mandate.

-The purchases will be revealed on a weekly basis,

to maintain transparency.

-The ECB won’t have seniority against other

investors on these bonds.

ECB – “The Euro is Irreversible”-Draghi told that in case a country starts deviating

from the Program signed with the Rescue Funds,

the ECB might start selling bonds, increasing the

costs of funding of the country.

The Eurozone will continue

contracting-The ECB revised its growth forecasts for the

Eurozone from -0,1% to -0,4% in 2012, and from 1%

to 0,5% in 2013.

Greece: Are you going to get

kicked from Eurozone?

-Schäuble told in a Press Conference after a meeting

with the Greek Finance Minister that the country

will only receive the next tranche if Troika’s report

reveals that Greece has been implementing the

austerity measures designed.

1,70%

3,20%2,90%

0,30%

-4,40%

2,00%1,40%

-0,40%

0,50%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Eurozone: GDP Growth

-Andalusia asked for a bailout of €1B from the

Government. It was the 4th region after Valencia,

Murcia and Catalonia. Over 60% from the €18B

capacity of the Regional Rescue Fund was already

spent with just these 4 regions.

-After the announcement of the OMT Program,

Spain’s Prime Minister told that his government will

study if a bailout will be advantageous for Spain. Olli

Rehn thinks that Spain shouldn’t wait any longer,

and should apply for a bailout.

-So, how long will Spain wait until asks for a bailout?

Spain – You don’t have any alternatives

Europe – The Outlook isn’t getting any better

0

10

20

30

40

50

60

70

PMI Manufacturing

Germany

France

Italy

Eurozone

UK

0

10

20

30

40

50

60

70

PMI Services

Germany

France

Italy

Eurozone

UK

US – The QE3 is getting closer after this week data-Manufacturing Data got its worst value since 2009. -Non-Farm Payrolls provided another sign that the

economy isn’t boosting.

49,6

48

51

54

57

60

63

ISM Manufacturing

202

112

157

223

275259

143

6887

45

141

96

Change in Non-Farm Payrolls

Weekly Preview

US The FOMC Meeting might be crucial for the Markets Performance over the next weeks. The

announcement of a QE3 is expected. It will be published economic data on the country, where

we should focus on inflation, retail sales, industrial production and consumer confidence.

Europe The most important events should be the Germany’s Constitutional Court decision over ESM,

Parliamentary Elections in Holland, a decision over Greece by Troika and any new details about

the start of the OMT Program by the ECB. We should follow closely Spain, as the country might

be close of asking for a bailout and qualifying for the Program.

Rest of

the

World

All eyes are above China after economic data that continues to point to a slowdown of the

economy.

Market IndicatorsWe remain positive for the markets, but there are some risks that can prompt them to fall.

Weekly Preview

Vicious Cycle of Europe. We are currently on level 2.

2,70

2,21

1,00

2,00

3,00

4,00

5,00

6,00

7,00

Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12

2Y Bond Yields: Spread VS

Germany

Spain

Italy

0,59

0

0,2

0,4

0,6

0,8

1

1,2

CBOE PutCall Ratio

Ideas for the week: Portugal BES: Buy at the market, stop-loss at 0,65€. Reasons to buy:

- The markets are rallying, due to the OMT from the ECB. As this Program will prompt to fall the Yields of

Government Bonds from countries that asked for assistance, the price of these securities will rise. As we

know, Portuguese Banks as BES are largely exposed to Portuguese Government Bonds.

- The markets risks are falling, and with it the costs of financing of these companies. For a Bank from a

peripheral country as BES, these are really good news.

- From the major Banks in Portugal, this was the only who didn’t require any assistance from the Portuguese

State for its recapitalization.

Weekly Preview

Disclaimer

Disclaimer

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