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Deutsche Bank Wealth Management CIO Insights Annual Outlook EMEA Reality check — 2018 The investment landscape ahead

CIO Insights Outlook 2018 - Deutsche Bank · CIO Insights Annual Outlook EMEA Reality check — 2018 The investment landscape ahead. ... market (Theme 6) where valuations are still

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Deutsche Bank Wealth Management

CIO Insights

Annual Outlook EMEA

Reality check — 2018 The investment landscape ahead

Overall, 2017 turned out to be a good year for investors with synchronized global growth translating into healthy returns for most risky assets. Investors also became accustomed to low levels of volatility.

Looking forward into 2018, Gross Domestic Product (GDP) growth is likely to remain at similar levels to 2017, and there seems to be room for some further price expansion in risky assets. But it would be a mistake to assume that continued economic growth will automatically translate into a similarly high level of investment returns as in the year just ending or that these returns will be repeated again throughout the coming year. In short, we need an investment “reality check”.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

CIO InsightsLetter to Investors2

Reality checkLetter to Investors

We expect another year of positive, if generally rather lower, investment returns. But as we discuss in our Ten Themes for 2018 (starting on page 5), this year will be subtly different from 2017. We believe that you should be prepared for, at the least, higher levels of volatility: as we put it, forewarned is forearmed (Theme 1). Our central macroeconomic scenario is that growth gazumps geopolitics (Theme 2) but it is worth considering some alternative risk scenarios and what they might mean, as we do on page 17: politics is not the only threat here and we would keep an eye on inflation too, for example.

A crucial focus will be the consequences of central banks in transition (Theme 3). Efforts to return to a more traditional monetary policy approach will continue. We think that they will proceed very cautiously and that their approach will manage to avoid major asset class reversals. But even the most gentle withdrawal of policy support could blunt some asset class returns. For this reason, we would suggest that you, for example, “flashlight” fixed income (Theme 4): shine the light into each compartment of this asset class and take a realistic view of what is possible.

Christian NoltingGlobal CIO

We expect another year of positive, if rather lower, investment returns.

Christian NoltingGlobal CIO

As we tread higher up the investment returns mountain, the journey will become more tiring. Nonetheless, we think that there is still some oxygen for equities (Theme 5). But, as they climb higher, markets will need the support of solid earnings growth as we do not expect a further expansion in valuation multiples. Within this asset class, we see the potential for further gains in the “new” emerging (EM) Asian equity market (Theme 6) where valuations are still attractive, and which should gain from the region’s increased exposure to technology. But with returns in conventional assets and asset classes probably lower on average than in 2017, and volatility higher, we think that it could be worthwhile to explore investment alternatives (Theme 7).

During 2018, in an environment of slow but continuous change in monetary policy, unexpected events could well lead to more volatility than in 2017. Exchange rates are usually an early echo of such uncertainty and we would expect dynamic foreign exchange (FX) drivers in 2018 (Theme

8): economic and policy fundamentals could be in conflict here with shorter-term factors. Oil markets seem unlikely to be upset, however, and we expect a strong case of oil déjà vu (Theme 9) – we think that the potential for higher U.S. production will continue to keep a lid on oil prices, as it did in 2017. Finally, we look at key selected longer-term portfolio drivers in tomorrow’s themes today (Theme 10) and this year highlight smart mobility and artificial intelligence (AI) as likely economic disruptors.

I remain a strong believer in being invested and staying invested, but I think that we all need to be realistic about what is achievable and try at all times to avoid complacency - a potential danger in the coming year. 2018 will mark a decade since the start of quantitative easing (QE) by the Fed and I think that the process of exiting it will be as interesting as QE was. This new and evolving political and policy landscape will generate plenty of investment opportunities: watch out for them.

I remain a strong believer in being invested and staying invested but we need to be realistic about what is achievable

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

CIO InsightsLetter to Investors3

Contents

Inside the cover

Looking forward into 2018, we can see a fertile landscape for investment returns, but with sunlight sometimes interrupted by clouds.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

5

16

18

20

22

24

25

26

27

34

29

Ten Themes

Ten Themes for 2018

Macroeconomics

Growth without tears

Multi Asset

Forward but not so fast

Equities

Room for more

Fixed income and foreign exchange

Compliments of the chef

Alternatives

Hedge funds

Data tables

Macroeconomic forecasts

Data tables

Asset class forecasts

Glossary

Contacts

Disclaimer

CIO InsightsContents4

Themes for 2018Forward but not so fast

102017 was characterized by resilience, accelerating growth, low volatility and earnings growth. With economic growth accelerating around the globe in a synchronized manner, financial markets notched up healthy returns. However, 2018 is likely to be rather different. Our base case scenario is that GDP growth remains close to current levels in most economies: global growth is put at 3.8% in 2018 after 3.7% in 2017. However, continued growth does not necessarily lead down a one-way path of positive returns. Elevated valuation levels across most asset classes suggest that markets have anticipated this revival of economic strength. So as not to extrapolate the performance of 2017, we believe a “reality check” is in order, which is the backdrop of our Ten Themes for 2018.

CIO InsightsTen Themes5

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

CIO InsightsTen Themes6

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

01Figure 1: Volatility is at abnormally low levels Source: FactSet, Deutsche Bank Wealth Management. Data as of November 28, 2017. 95% of historical range is between the 2.5% and 97.5% percentiles.

Volatility is not just depressed in the equity market, but is near record lows in almost all asset classes. To put it another way, the S&P 500 looks like it could complete 2017 without a pullback of 5% or more – for the first time since 1995. But this is not the time to be complacent: low levels of volatility are unlikely to be sustained through 2018. There are plenty of potential political risks out there, for example in U.S. politics (run-up to the mid-term elections, Trump legislative agenda), European politics (Brexit, Italian elections) or geopolitical events featuring Saudi Arabia or North Korea. With many

Forewarned is forearmed

asset classes priced close to perfection (in other words, on the assumption that everything goes right), they could be vulnerable to short-term reversals.

Investment implications This is the time to start thinking about reconfiguring portfolios. Being realistic is key. Selectivity, active management, risk management (perhaps through risk return engineering and option overlays) and tactical positioning are likely to be important drivers of performance.

180

VIX0

20

40

60

80

100

120

140

160

VSTOXX MOVE Oil Gold

95% of Historical Range Average Spread Level Current Spread

CIO InsightsTen Themes7

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

02Figure 2: U.S. yield curve inversion historically precedes recessions – but with a gap Source: Thomson Reuters, Deutsche Bank Wealth Management. Data as of November 17, 2017.

While geopolitical and domestic political concerns will continue, we expect growth momentum in the major developed and emerging market economies to come out on top. Consumer demand will likely be the key driver of global growth as the probability of recession remains fairly low over the course of the year in all major economies. Individual and corporate tax cuts remain a catalyst for better U.S. growth. While the positioning of individual countries within the business cycle can be debated, the reality is that the major driver and determinant for financial markets will be the U.S., which is in a late phase of the economic cycle. As a result, we will look out for key indicators (e.g. U.S. yield curve inverting,

Growth gazumps geopolitics

rising unemployment) that may tell us if the U.S. economic expansion is set to hit an inflection point or continue its upward trajectory. But history suggests that even if we get a U.S. yield curve inversion (which still appears some way off), then we still could be many months away from the start of recession.

Investment implications Continued growth should help risky assets, and will probably favour equities over bonds. Strong domestic demand growth could aid certain market segments, for example small cap equities in the U.S. and European small/mid cap equities.

3.5%

Nov 82 Nov 87 Nov 92 Nov 97 Nov 02 Nov 07 Nov 12 Nov 17-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

U.S. 10-year minus 2-year yields U.S. recessions

08

-50

09 10 11 12 13 14 15 16 17 18 19

0

50

100

150

200

USD bn

Fore

cast

Peak QE:

March 2017

CIO InsightsTen Themes8

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

03Figure 3: Central bank bond purchases are starting to slow Source: Deutsche Bank Global Markets, Deutsche Bank Wealth Management. ECB and Fed data is for six month moving averages; others are 12 month moving averages. Assumptions are that the Fed will redeem maturing assets as per the announced cap during their September 2017 decision. We assume that the ECB will cut buying to €30bn per month from January 2018 to September 2018 and then to €10bn a month in October, November and December 2018, and then to zero for 2019.

Global central banks are likely to remain accommodative even as some slowly begin the normalization of their balance sheets. The Fed could prove to be slightly more hawkish in 2018 than in 2017, but the broad thrust of policy will continue, as the ECB and BoJ move only slowly to reduce asset purchases. However, changes in the U.S. Federal Open Market Committee (FOMC) composition will add to uncertainty, and markets will also be thinking about future changes in the leadership of the European Central Bank (ECB) and Bank of Japan (BoJ). Inflation could start to become more of an issue – perhaps due to growing upwards wage pressure - but won’t derail the current policy trajectory.

Central banks in transition

Investment implications Generally accommodative central banks will favour risky assets overall. Further Fed tightening could also strengthen the U.S. dollar, at least early in the year, with implications for investment returns – it would, for example, benefit the total return of U.S. bonds relative to Europeans. In the bond sector, we would favour active management and also be cautious on European core government bonds – short and long duration – but we stay positive on emerging markets hard currency bonds. Floating rate bonds could be useful as the shorter end of the yield curve moves higher.

BoE Fed BoJ ECB Total

1000

bps

U.S. High Yield0

100

200

300

400

500

600

800

700

900

EUR High Yield U.S. Investment Grade EUR Investment Grade EM Bonds

CIO InsightsTen Themes9

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

04Figure 4: Corporate spreads are close to the bottom of their historical range Source: FactSet, Deutsche Bank Wealth Management. Data as of November 28, 2017. 95% of the historical range is between the 2.5% and 97.5% percentiles. High yield spreads are truncated on the upside (U.S. = 1455, EUR = 1836).

The authenticity of the thirty year plus bull market in bonds in recent years has been challenged by the unprecedented non-traditional, quantitative easing (QE) policy of global central banks. In fact, the Federal Reserve estimates that their massive bond buying has depressed 10-year Treasury yields by ~100 bps. In fact, due to QE, around 17% of all bonds outstanding (sovereign and credit) trade with negative interest rates. As investors have moved into more risky fixed income sectors in the search for yield, this has compressed yields significantly – to the extent that European high yield has recently been yielding less than the 10-year U.S. Treasury. Against this background, government bonds will likely

"Flashlight" fixed income

struggle in 2018. There will continue to be high quality carry opportunities, but the overall picture suggests that the return profile in credit will be less attractive than in 2017.

Investment implications Many sovereign bonds could have negative performance in 2018 as policy normalization continues. Within the main credit space, you will need to be selective. Emerging markets are still likely to provide opportunities, with our forecasts suggesting that emerging market sovereigns could offer the highest total returns in the fixed income space in 2018.

95% of Historical Range Average Spread Level Current Spread

2008

39.9%

2009

52.8%

2011

37.0%2012

27.5%

2013

31.6%

2014

36.8%

2015

31.2%

2016

30.1%

36.4%

2017

48.6%2010

24.8%

10-Year Average Dispersio

n

CIO InsightsTen Themes10

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

05Figure 5: Equities sector dispersion is growing again Source: FactSet, Deutsche Bank Wealth Management. Data as of November 29, 2017.

Global equity markets have hit multiple record highs in 2017, but there is room for further, probably smaller, gains on the back of continued economic growth. The truth is that earnings will need to be the driver of equity performance as valuation multiples are likely to contract slightly. Selectivity is going to be critical as sector dispersion will probably continue to grow.

Investment implications At a geographic level, there are arguments to favour Europe and Japan over the U.S., but regional differentiation within the developed markets may not be

Still some oxygen for equities

strong. Emerging markets could slightly outperform developed markets over the next 12 months and our focus here is on Asia (see next theme), but selectivity will be important. At a sectoral level, we would suggest following earnings growth (e.g. technology and financials) and we have tactical global overweights on both these sectors and healthcare. We have an underweight on telecoms and utilities. Intra-sector correlations are notably lower now than a year ago and this trend may continue into 2018, providing a further argument for stock selection.

S&P 500 Sector Dispersion

32.8%

10.4%

2016

10.6%

26.3%

2015

26.3%

12.3%

2014

23.9%

14.5%

2013

22.3%

16.6%

2012

20.5%

18.8%

2011

38.9%

10.1%

2017

20.7%

18.6%

2010

21.2%

18.4%

2009

18.0%

17.2%

2008

20.4%

17.4%

2007

CIO InsightsTen Themes11

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

06Figure 6: Importance of Tech in MSCI Asia ex-Japan has risen sharply Source: FactSet, Deutsche Bank Wealth Management. Data as of November 28, 2017.

The outperformance of emerging markets in 2017 had its foundations in above-average earnings growth and substantial upward revisions to earnings estimates through the year. We expect that environment to continue, particularly for Asian emerging markets where solid economic growth is encouraging double digit earnings growth; upwards revisions made to expected 2018 earnings are also the strongest in any region. Despite this, Asia still has attractive valuations, for example relative to the MSCI AC World Index. Another important dynamic driving our preference for Asian EM

The "New" EM Asia equity market

equities is their increasing exposure to the tech sector, one of our favourite sectors. Whereas commodities (energy and materials) had the largest weighting in the MSCI Asia ex-Japan 10 years ago, tech now leads the rankings with a 39% share.

Investment implications Favour Asia within emerging markets. Active management could be important, with tech becoming a bigger story in Asian emerging markets.

Info Tech Weight Commodities Weight (Energy and Materials)

Australia China Japan

France Germany Italy

UKSpain U.S.

6.9%

7.0%

5.3%

3.8%5.3%

8.4%5.6% 6.1% 5.8%

8.1%

4.2%

6.6%5.6%

5.4% 5.3%5.3%

6.2%5.7%

9.0%

7.6%

7.7%

7.6%6.3%

4.9% 6.0% 7.1%

7.7%

6.6%

6.5%

6.2%

8.1%

4.8%6.2%

5.4%4.2%

6.5%

CIO InsightsTen Themes12

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

07Figure 7: Forecast real estate returns on a 5-year annualized basis Source: Deutsche Asset Management, Deutsche Bank Wealth Management. Data as of September 2017.

Expectations of slimmer pickings in equities and fixed income should encourage exploration of investment alternatives (which does not necessarily mean alternative investments). One time-honoured use of different sorts of investment is diversification: over the long-term, non-traditional asset classes such as real estate, hedge funds, convertibles and floating rate bonds can provide a different mix of return levels vs. variability of returns and thus help “plug the gaps” in a portfolio.

Explore investment alternatives

Investment implications Hedge funds and some other alternatives may in some cases be able to mitigate downside risk, but this will depend on the type of hedge fund strategy used. Other specific areas such as hybrids, convertibles, and floating rate bonds could be interesting, but be selective on real estate (by type or geography). Look also at new, non-traditional alternative approaches such as factor investing and big data. But please note that alternative investments are not suitable for and may not be available to all investors.

Industrials Office Retail Total

145

14 15 16 17125

127

129

131

133

135

137

139

141

143

0%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

CIO InsightsTen Themes13

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

08Figure 8: Italian election could pose a euro risk Source: Bloomberg Finance LP, Sentix, Deutsche Bank Wealth Management. Data as of December 2, 2017. Break-Up index measures probability given by investors to a break-up of the Eurozone in the next 12 months.

Multiple factors will drive exchange rates in 2018. During 2017 the relationship between the U.S. dollar and the euro drifted apart from that between U.S. and European 2-year yields and alternative drivers are already in play. In addition to interest rate differentials, central bank rhetoric, politics (e.g. tax cuts) and fund flows exist and can impact valuations. Note, for example, the relationship between President Trump’s approval ratings and the DXY dollar index. Specific drivers in 2018 could include U.S. earnings repatriation benefiting the U.S. dollar and fears around the Italian election impacting the euro. With

Dynamic FX drivers

markets looking for clues from a wide range of political, policy and economic indicators, currencies could be more vulnerable to volatility in 2018.

Investment implications Favor the U.S. dollar in early 2018, in the wake of Fed tightening, but be prepared for a euro revival later in the year. Look beyond investing around obvious currency pairs: consider, for example, a trade-weighted U.S. dollar index or a basket of the currency against sterling, the Japanese yen, the Swiss franc and the Chinese renminbi. Minor currency pairs could also offer opportunities.

Euro Trade Weighted Index Sentix Euro Break-Up Index (rhs, inverted)

$60

Permian

$58

$40

$44

$42

$46

$54

$52

$50

$48

$56

Scoop Eagle Ford Permian(Delaware)

Permian(Central)

Other U.S.(non-shale)

Other U.S.(shale)

Current WTI Price

$46

$47

$48 $48

$50

$53

$55

CIO InsightsTen Themes14

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

09Figure 9: Oil prices are now above U.S. breakeven levels Source: FactSet, Deutsche Bank Wealth Management. Data of November 2017.

We don’t expect a further surge in oil prices, but be aware that oil market dynamics are shifting. In particular, rising political tensions in the Middle East may add to concerns about temporary supply disruption. Short-term spikes in prices are possible but we continue to believe that U.S. production will likely accelerate in response to higher prices, ultimately keeping a lid on them. Oil prices are currently well above estimated breakeven levels for sources of U.S. shale and non-shale output, which range from $46-$55/b. The U.S. government’s Energy Information Administration (EIA) currently anticipates that U.S.

Oil déjà vu

production will rise to a record high of 9.8mn b/d. It is also possible that further increases in U.S. oil rig productivity lift production further. A further negative factor on global oil prices over the longer term could be the changing energy-use landscape with (for example) increased use of electric vehicles lowering oil demand.

Investment implications Be cautious on oil and related sectors. Short-term oil price gains, for example due to OPEC production limitations, are likely to be short-lived.

Mean Breakeven Prices for New Wells by Region

2018

64,000

2019

107,0002021

213,000

2023

426,000

2025

569,000

2020

149,000

2022

320,000

2024

512,000

CIO InsightsTen Themes15

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

10Figure 10: Autonomous vehicle shipments are forecast to rise Source: Bloomberg Intelligence, Deutsche Bank Wealth Management. Data as of November 2017.

Long term investments that benefit from evolving secular trends remain important drivers of portfolios. We re-iterate our long-term secular themes that we introduced last year that focused on infrastructure, cyber security, global aging and millennials. This year we add two additional themes: smart mobility and artificial intelligence (AI). Smart mobility is a new tech theme focused on the multiple implications of self-driving cars and other technological advances in transport. There will be implications for car makers, batteries, powertrains and the whole charging infrastructure – possibly including power generation. AI has an impact on multiple sectors, including smart mobility. The quest to “intelligently” automate repetitive tasks, anticipate human action/preferences,

Tomorrow's themes today

and problem solving in a disciplined manner will attract more investment to this theme.

Investment implications You could approach investing in these areas through multiple ways, for example through theme-based exchange traded funds (ETFs) or (for some clients) via private equity investment related to AI, Smart Mobility and so on. The radical change that AI creates will not be painless – so you don’t just need to look for the opportunities it creates in individual firms/sectors, you need to look for dangers to existing investments. Possible social responses (e.g. through education) could also create opportunities.

Estimation of Fully Autonomous Car Shipments

CIO InsightsMacroeconomics16

Growth without tearsMacroeconomics

All on the up

Growth data has been almost universally good in 2017, as continued signs of U.S. economic vibrancy matched the stronger growth in Europe, Japan and in many emerging markets. At the same time, inflation has generally remained low, giving central banks the option to keep monetary policy relatively loose.

The U.S. recovery has continued to benefit from labour market healing, and has also been underpinned by sound household and business finances and some modest stimulus from Washington. In Europe both business sentiment and hard data suggest that the recovery is expected to continue and a strengthening labour market will boost consumption. We do not expect substantial fiscal stimulus in Europe but there may be an increased degree of flexibility around budget deficits. Japan is now experiencing a pick-up in consumption after more than two years of stagnation. Consumption will further help drive the Chinese economy, with structural reforms also boosting the economy over the medium-term: so far the People’s Bank of China (PBoC) has managed to gently deleverage the economy without causing economic or investment upset.

Global growth therefore looks likely to pick up slightly in 2018, to reach 3.8%. A further increase in growth in the U.S. and the emerging markets (in aggregate) will be only particularly offset by slower growth in China, the Eurozone and UK. This seems likely to set the stage nicely for further interest rate rises by the U.S. Federal Reserve (Fed) and the introduction

Further evidence of synchronized global growth, combined with a careful approach from policymakers, is likely to ensure another year of solid global economic recovery in 2018. But political and policy risks have not completely disappeared.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

Figure 11: Growth forecasts for 2018 Source: Deutsche Bank Wealth Management. Data as of November 17, 2017. *The ASEAN 5 are Indonesia, Malaysia, the Philippines, Singapore and Thailand.

of tapering by the European Central Bank, although the Bank of Japan is likely to keep faith with its current policy.

Political and policy risks

Risks remain, however, many of them political. In the U.S., the current focus is on whether or not President Trump manages to get Congress to agree to tax reforms. The outcome of this process is likely to become clear in the first quarter of 2018 and the focus will then turn to the mid-term Congressional elections in November 2018. In Europe, continuing debate around Brexit could create growth uncertainties, not just in the UK. The Italian general election, most likely to be held in the spring, could also still throw up some surprises. In the emerging markets, political and economic concerns may centre around markets such as Brazil and South Africa. Mexico will also be wary of President Trump’s ambition of renegotiating the North American Free Trade Agreement (NAFTA).

Other risks to the macro-economic outlook may be policy-related. Here there are both upside and downside risks to growth. In the U.S., one upside risk is that we get a bigger stimulus from Washington than we expect, so "animal spirits” kick in, and that with monetary policy still relatively loose, we get a sharp pick up in U.S. growth and inflation. The U.S. downside risk is that policy risk and political turmoil in Washington intensify, that the economic recovery (already the third longest in history) simply runs out of steam, that financial conditions begin to tighten and bite and that we get sharp disinflation. We discuss these and

Developed Markets

Emerging Markets

2.3

2.0

2.1

2.0

1.2

2.5

1.3

1.5

7.5

6.5

5.2

2.0

1.8

U.S.

Eurozone

Germany

France

Italy

Spain

UK

Japan

India

China

ASEAN 5*

Russia

Brazil

4.5

Jan 2008 May 2017-1.5

-0.5

0.5

1.5

2.5

3.5

CIO InsightsMacroeconomics17

other threats to the global economy in the box on the following page.

Inflation

As we noted in the last CIO Insights, inflation has very much been “the dog that didn’t bark in the night” in the current recovery: rates have remained obstinately low. The chart below illustrates the personal consumption expenditure (PCE) rate of inflation for the U.S., the Fed’s preferred measure. However, it is still worth considering what might cause an unexpected increase in prices, particularly as, after the central banks’ various quantitative easing programs, the monetary base has been much expanded. One possibility would be a supply-side shock, for example through an increase in the oil price. We are now accustomed to living in a world with ample oil supplies: geopolitical events could however lead to a supply cut. Upward movements in metals prices could also have an inflationary impact. In the U.S., inflation expectations are tame but Eurozone inflation expectations could move up from their current low levels if, for example, skilled labour shortages add to upward pressure on wages, or rising house prices have an effect on rents. The example of the UK, where inflation is already troublesome, should remind us that this is a problem that never really goes away.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

Figure 12: U.S. inflation* remains obstinately low Source: Deutsche Bank Wealth Management. Data as of November 17, 2017. *Personal Consumption Expenditure (PCE) measure

Total Core Fed's Target

Potential risks for 2018

Excessive central bank tightening

The first risk arises from central banks, especially the Federal Reserve, which is widely expected to raise interest rates at least twice in 2018, in line with a healthily growing economy. If however the Fed were to raise rates too aggressively under its new chairman, other central banks might be forced to turn more hawkish as well in order not to be excessively misaligned, which could result in a global monetary squeeze that would put the brakes on global synchronized growth. This scenario would be detrimental for both equity and bond prices and might also strengthen the U.S. dollar, putting pressure on emerging markets and on commodity prices.

Oil supply shock

Over the last few years, crude oil production in the United States has kept the oil price in check by increasing global supply every time that OPEC has reduced its output, thereby creating a price ceiling that has prevented an energy-induced boost to inflation. However, a geopolitical shock to supplies large enough to outstrip the capacity of the United States to fill the gap could push prices up in a short period of time, to the detriment of economic growth. Both the credit sector (with the exception of energy-related bonds) and equity markets would suffer as a result.

Credit bubbles

The current economic expansion has been achieved partly thanks to a constant increase in public and private debt. While the banking system and corporate balance sheets are more solid than they were before the financial crisis of 2007-2008, a credit crisis triggered by spiralling defaults is a risk factor to take into consideration. Concerns over excessive credit growth focus on China. The Chinese authorities have been successful in reducing the rate of credit growth, but it remains high. Rising debt is closely linked to asset price inflation in the Chinese property market and the share of the financial sector in Chinese GDP has more than tripled over the last 20 years, to around 16% now. China’s economic resilience has been a key driver of the strong growth in emerging markets this year, and they would be very vulnerable to any Chinese reversal, with developed markets in the firing line too. Equities and corporate bonds would suffer, while developed market government bonds and safe haven assets such as gold and the Japanese Yen could benefit.

Geopolitics

Throughout 2017, financial markets have shrugged off geopolitical concerns with, for example, rising tensions between North Korea and the United States not making any sustained dent into equity market performance. However, there could be a crunch point: if markets start to believe an escalation of tensions will lead towards war, this would have an immediate negative impact on all risky asset classes, with the only exception of some safe haven assets such as gold. But other safe haven assets such as Japanese Yen might not prove immune – given that Japan itself could be threatened by the reach of North Korean missiles. Geopolitical crises are also possible elsewhere.

Further evidence of synchronized global growth, combined with a careful approach from policymakers, is likely to ensure another year of solid global economic recovery in 2018. But political and policy risks have not completely disappeared.

1

2

3

4

4.5

%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

CIO InsightsMulti Asset18

Forward but not so fastMulti Asset

Our multi asset investment process has three pillars: we start with the initial views of our committee members and key risk takers (Pillar 1) and then refine the results through consideration of individual scorings of asset classes on macroeconomic, valuations and technical factors (Pillar 2) and using four models to asset the overall level of risk (Pillar 3).

Looking out over a 3-month horizon, our strategic asset allocation still suggests a broadly “risk on” approach with a focus on equities. But we expect returns next year to be rather lower than those recently enjoyed by investors.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

Stéphane JunodCIO EMEA and Head of Wealth Discretionary EMEA

In coming months we continue to expect a generally supportive economic and policy environment, with continued global growth accompanied by only modest and careful efforts to tighten monetary policy. Macroeconomic scores in our Pillar 2 assessment were generally positive in late 2017 although they were partially offset by negative scores on valuations for many asset classes.

Figure 13: Seasonality trends on the S&P 500: average monthly returns Source: Deutsche Bank Wealth Management. Data as of November 17, 2017.

Since 1928 Since 1980 Since 1990 Since 2010

Equity Developed Markets

Equity Emerging MarketsFixed Income Credit

Fixed Income S

over

eign

s

Em

ergi

ng M

arke

ts

Fixe

d In

com

e

Cas

h

Alternatives1

Commoditie

s Equity

Fixed Income

CIO InsightsMulti Asset19

Still “risk on”

What is interesting at the moment is that, despite all the concerns around a possible late cycle environment, our four risk models in late 2017 generally supported a “risk on” approach. Our macro indicator remained at very high levels, with the global surprise indicator (data meeting expectations) stabilizing in very positive territory too. Risk and regime indicators were also positive.

This, combined with general good news on earnings, encourages us to keep faith in equities, despite high valuation levels, current low levels of volatility and the length of the current economic cycle. However, we are growing slightly more cautious and think that valuation multiples could move down to more normal levels during 2018, meaning that further earnings growth will be necessary to sustain the upward moves in prices. If earnings growth disappoints, this could refocus attention on increased levels of corporate debt, possibly unsettling markets. Possibly negative seasonality at the start of 2018 (see Figure 13) could also temporarily dent returns.

On fixed income, we see further opportunities in emerging markets debt (after a good year for this asset class) but are cautious on high yield, believing that only slight further spread tightening is likely versus Treasuries. We have a broadly neutral view on investment grade credit, believing that the fundamentals and market technicals still offer support. We continue to underweight government bonds (seeing little opportunity for returns here) but keep an appreciable allocation to cash. We are short duration as economic momentum and changed central bank direction should drive rates higher, even if we expect this move to be gradual and market-friendly.

On commodities, we do not expect a sharp further upwards move in the oil price and believe that the overall global economic environment will not be supportive for gold, despite geopolitical uncertainties.

Preparing for lower returns

Our 12-month forecasts do imply, however, that multi asset returns may be lower in 2018 than the historical average of the last 20 years. This lower return environment calls over the longer term for both active risk taking (if you want to maintain returns at current levels) and active risk management. Including a higher proportion of risky assets in a portfolio should push us further up the risk-return curve, boosting expected returns but at the cost of increasing risk; active risk management would then aim to trade a slight decrease in returns (because of the cost of implementing the strategy) for achieving reduced risk.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

Figure 14: Asset allocation (balanced portfolio as of December 8, 2017)

Footnote: Asset allocation as of December 8, 2017. 1 Alternative investments are not suitable for and may not be available to all investors. Restrictions apply. Sources: EMEA Regional Investment Committee, Deutsche Bank Wealth Management. This allocation may not be suitable for all investors. Past performance is not indicative of future returns. No assurance can be given that any forecast, investment objectives and/or expected returns will be achieved. Allocations are subject to change without notice. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. Investments come with risk. The value of an investment may fall as well as rise and your capital may be at risk. You might not get back the amount originally invested at any point in time. Readers should refer to disclaimers and risk warnings at the end of this document.

Equity

Fixed Income

Cash

Commodities

Alternatives

Developed Markets

Credit

Sovereigns

Emerging Markets

Emerging Markets

4.0%

3.0%

12.0%

33.0%

15.0%

18.0%

6.0%

9.0%

Figure 15: Equity market forecasts and January-November 2017 index change by region

Data as of November 30, 2017; forecasts are as of December 8, 2017. All returns are YTD. Source: Bloomberg Finance L.P., Deutsche Bank Wealth Management

UK (FTSE 100)Index change YTD (GBP):

+2.4%End-Dec 2018 forecast:

7,500

United States (S&P 500)Index change YTD (USD):

+18.3%End-Dec 2018 forecast:

2,750

Eurozone (Eurostoxx 50)Index change YTD (EUR):

+7.2%End-Dec 2018 forecast:

3,780

Asia ex. Japan (MSCI Asia ex Japan)Index change YTD (USD):

+35.3%End-Dec 2018 forecast:

760

Japan (MSCI Japan)Index change YTD (JPY): +16.2%End-Dec 2018 forecast: 1,210

Latam (MSCI Latam)Index change YTD (USD): +16.9%End-Dec 2018 forecast: 2,850

Switzerland (SMI)Index change YTD (CHF): +13.3%End-Dec 2018 forecast: 9,450

CIO InsightsEquities20

Room for moreEquities

After strong gains in 2017, fears are growing that equities are about to peak. But continued growth and supportive policy should leave room for further modest index increases.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

There is a whiff of “late cycle” in the air. Another year of unexpectedly strong global economic growth has culminated in close to the longest uninterrupted expansion of the U.S. equity market in history and made for rather stretched valuations. Investors increasingly fret about being near the peak.

But we believe that it would be premature to conclude that the end of the expansion is nigh. Time and again, equities have shown to do well in a late cycle environment. Moreover, solid global economic growth, broadly accommodative central bank policies and the potential for tax reform in the U.S. in early 2018 are likely to support stronger corporate earnings as we head into next year, further underpinning equity markets.

Earnings growth will be key

Don’t expect a completely smooth ride. Volatility is likely to increase and rising interest rates and already stretched valuations are likely to result in a contraction of price/earnings (P/E) ratios throughout developed markets, with the likely exception of Japan. So further rises in markets will require continued growth in earnings. We believe that this will be forthcoming, with earnings expected to grow between 5.5% and 16% for major markets, with emerging markets at the upper end of this range and the FTSE 100 at the lower. Tech and financials are likely to be the key drivers. On the other hand, we don’t believe that earnings will keep surprising on the upside as they have done in 2017.

Europe and Japan over the U.S.

At a regional level, U.S. valuations appear expensive relative to history, although they are cheap vs. current levels. Valuations in Europe appear more attractive, although we have now adopted a neutral stance on German equities. We are positive on Japanese equities, believing that there is room for a further catch-up with other developed markets.

Emerging markets keep on going

We are positive on emerging markets, even after their strong performance in 2017. We see a highly supportive environment with generally good economic growth, low inflation and realistic earnings expectations. Valuations are also still reasonable, particularly in Asia. Within emerging markets we favour Asia, but are more cautious on Latin America. All in all, emerging markets look poised to slightly outperform developed markets over the next 12 months. However, selectivity will be important as certain regions, such as Latin America, carry higher levels of risk.

CIO InsightsEquities21

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

POSITIVES NEGATIVES REGIONAL PREFERENCE

SECTOR

Overweight Neutral Underweight

Heath Care

Industrials

Information Technology

Materials

Telecom Services

Utilities

VIEW

VIEW

VIEW

VIEW

VIEW

VIEW

– Enough product innovation to find equities with superior growth outlook

– Biotech valuations still attractive – Mid and small cap companies could benefit

from acquisition by mature companies keen to bolster pipelines

– Chinese demand is holding up and European demand has improved

– Energy and materials capital expenditure is improving

– Leading indicators surprise on the upside

– Diverse sector with clear market leaders in subsectors and increasing barriers to entry

– Growth potential from innovation and disruption of other industries

– Solid balance sheets and strong future cash flow generation

– Synchronized global growth bullish for sector – Earnings from chemicals largely positive – A lot of mergers and acquisition activity

– Operating performance has improved – Data monetisation remains a key theme – Valuations back to more attractive “pre-

M&A” levels

– In Europe, H1 2017 mostly ahead of expectations

– Forecasts suggest that European sector will end a decade of earnings decline

– Market-friendly policy measures in some markets, notably Brazil

– Continued pricing pressure in competitive indication areas

– Large cap pharma and biotech face growth challenges

– Pharma earnings could suffer from negative revisions and aggregate growth will decelerate

– Sector valuation back to a premium – Long-term attractive but strong economic

improvement needed for sustained outperformance

– Cost pressures from raw materials and other costs not yet passed on to consumers

– Short product cycles can potentially disrupt business models

– Smartphone penetration, previously a key growth drive, has now entered saturation phase

– Earnings interpretation complicated by several factors

– Environmental controls in China could hit demand

– Specialty chemicals hit by raw materials prices – Rebound of U.S. dollar or China slowdown

would be a negative

– Promotions could heat up competition and hit pricing

– Content costs increasing in many markets – Penetration rates in U.S. close to saturation

– Rising bond yields would not help regulated stocks

– UK government suggesting price cap on energy tariffs

– Demand picture in wind sector getting more challenging

Pharma

Conglomerates

Software & service

Chemicals

Telecom

Utilities

Biotech

Rails & earnings

Hardware

Metals & mining

Medtech

Aerospace & defence

Semiconductors

Services & facilities

Figure 16: Equity views by sector Source: Deutsche Bank Wealth Management. Data as of November 17, 2017.

Consumer Discretionary

Consumer Staples

Energy

Financials

VIEW

VIEW

VIEW

VIEW

– Healthy consumer sentiment in the U.S., Japan, China and other markets

– Gentle increase in global inflation to drive margins

– Urbanisation in emerging markets drives demand for premium goods and global brands

– Staples a prime beneficiary of emerging market improvements, through both macro/consumption and FX

– More reasonable valuations – Continued M&A activity, including cross

sub-sector attempts.

– Oil markets look relatively stable – U.S. rig count growth has moderated for now – Dividend risk appears to be decreasing – Industry planning for “lower (prices) for

longer”

– U.S. interest rate cycle is turning – Rising dividends and share buybacks – Capital management and cost cutting to

offset headwinds

– Problems continue for U.S department stores – UK consumer sentiment weakens in

anticipation of Brexit: retail and car sales already showing weakness

– Eurozone: Improving macro conditions to encourage some tightening in policy.

– Sluggish demand in some emerging markets

– Underlying business trends tough and unlikely to improve soon

– Input costs could become an issue in some sectors

– Use of sector as some form of bond proxy is mostly a headwind

– Progress in e-commerce is a double edged sword for many fast-moving consumer goods (FMCG)

– OPEC has no exit strategy from its current approach

– As always, valuations imply some price recovery which may not materialize

– Fracking as the marginal producer may cap upside for oil prices

– Low yield environment still hurting margins and investment income outside the US.

– Regulation likely to weigh on banking activities

Auto & components

U.S

.

EU

RO

PE

EM

ER

GIN

GM

AR

KE

TS

Food retail

Equipment & services

Banks

Durable & apparel

Beverages

Integrated

Insurance

Consumer service

Food products

Exploration & production

Diverse financials

Media

Tobacco

Refining & marketing

Retail

Household & personal products

30

Jul 2017 Jan 2018 Jul 2018 Jan 2019

15

10

20

25

35

33%

CIO InsightsFixed income and foreign exchange22

Compliments of the chefFixed income and foreign exchange

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

The central bank chefs will remain in control of the fixed income kitchen in 2018, as they push on with policy normalization. The process should go smoothly, but previous spread tightening means that fixed income returns are likely to be rather lower in 2018 than this year. We don’t expect a sharp reversal in the market, but this will be a year to be cautious and selective.

Central banks in 2018

Central banks will continue to move only slowly along the long road to policy normalization, with monetary policy remaining broadly accommodative.

A Fed rate rise in December 2017 is likely to be followed by at least two more in the course of 2018; as importantly, the Fed has already determined how it will run down its balance sheet and this process appears to be running smoothly. Markets are assuming that Jerome Powell taking over as Fed chair will not result in any significant change in policy. However the combination of Fed balance sheet reduction needs and budget deficit financing needs could increase bill supply over the next year, with the Q1 2018 increase in supply perhaps as high as USD350bn. This will have implications for the U.S. Treasuries yield curve, as discussed below.

The ECB is some way behind on the path to normalization, but over the course of 2018 we are likely to see asset purchases wound down to zero: the program is currently scheduled to end in September 2018, and seems unlikely to run beyond the fourth quarter of the year at the latest. This could be as much due to technical factors as economic ones: as Figure 17 shows, the ECB could next year hit the 33% issuer limit for German bonds. (The ECB defines a maximum share of a country’s outstanding securities that it is prepared to buy, to avoid it becoming the dominant

Figure 17: ECB purchase program could be curtailed by 33% issuer limit Source: Deutsche Bank Asset Management forecasts. Data as of November 16, 2017.

Germany France Italy Spain Netherlands Belgium

creditor to EU governments: it can change this limit, but any upwards move would be politically sensitive.) Mr Draghi has however been careful to promise to maintain current interest rate levels until well beyond the end of quantitative easing and to reinvest the principal from maturing bonds for as long as necessary. With Eurozone inflation likely to remain below the 2% ECB target in 2018 and 2019, the ECB is under no pressure to tighten policy soon.

The Bank of Japan (BoJ) has already pushed back its inflation target for another year, and seems very relaxed about maintaining current policy for as long as possible: we do not expect meaningful change until 2019. The BoJ’s yield curve control policy has been very successful so far and we think that the 10-year yield could be kept at around 0% without major market volume: in fact, BoJ monthly purchases appear to be running at around ¥50 trillion at an annualized rate, rather than the previous ¥80 trillion.

Government bonds

Central banks have been managing radical monetary policy for nearly 10 years now – and they have learnt much from the experience, at least on the need for careful communication of their intentions. So they are likely to be very transparent and methodical as they taper their asset purchases. The net result is likely to be a very gradual increase in interest rates accompanied by, in the case of the U.S., a slight flattening of the yield curve for the reasons given above. Our 12-month forecast for global sovereign rates remains unchanged at the longer end (U.S. 10 year at 2.6%, German 10 year at 0.8%, UK 10 year at 1.4% and Japan 10 year at 0.10%).

Corporates

2018 will be a year where it will pay to be selective, cautious and aware of specific factors in individual corporate credit markets. So, for example, our expectations of tax reform and business friendly policies in the U.S. (e.g. tax cuts and repatriation) should benefit U.S. corporations, especially investment

grade due to their large cash investments held overseas (12-month spread forecast lowered to 80 bps from 90 bps). In fact, we see some room for tightening in both U.S. and European investment grade. We are rather cooler on high yield, although a better default environment should give some support to both U.S. and European markets (U.S. 12-month spread forecast revised from 360 bps to 350 bps; the European forecast moves from 275 bps to 260 bps). European high yield may be less attractive when compared to the U.S., on the basis of valuations (spreads to default rate), and relative valuation to equities. We have slightly upgraded our outlook for emerging market (EM) credit (12 months spread forecast 270 bps from 280 bps) as EM companies have benefited from the global synchronized recovery. More accessible investment opportunities could however exist in EM sovereigns, which we remain positive on.

Foreign exchange

Given that returns on fixed income investments are likely to be relatively low in 2018, foreign exchange trends could prove particularly important. These were not entirely as expected in 2017: the euro strengthened against the U.S. dollar for much of the year, despite policy (in terms of interest rate differentials) and economic growth being theoretically in the dollar’s favour. Supporting the euro was a growing sense of economic optimism around Europe, as well as a belief (for most of the year) that European political risks had dissipated, at least to a degree. In recent months, however, the dollar has showed signs of strength and we think that it could make further ground against the euro in early 2018 (in the wake of the end-2017 Fed rate rise and in anticipation of tax reform) before the euro, in turn, gathers strength again later in the year. The lesson from 2017 is that foreign exchange drivers are likely to be diverse, and include politics and fund flows as well as economic fundamentals. It could also pay to look at a variety of currency based indices or currency pairs.

CIO InsightsFixed income and foreign exchange23

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

The lesson from 2017 is that foreign exchange drivers are likely to be diverse, and include politics and fund flows as well as economic fundamentals.

CIO InsightsAlternatives24

Hedge FundsAlternatives

Discretionary Macro and CTA

We are neutral/positive on Discretionary Macro and CTA strategies. The current environment of global synchronized growth and moderate inflation might not appear conducive for Discretionary Macro strategies, which aim to capitalize on large-scale political or economic events. But we believe that the current “status quo” of favourable economic indicators and investor sentiment is setting the stage for potentially vulnerable market positioning. A similar argument applies to CTA strategies. Their systematic approach allows investment over a very large group of financial assets, increasing the likelihood of capturing a price trend.

Equity Long/Short and Equity Market Neutral

We are neutral on Equity Long/Short and on Equity Market Neutral. Equity Long/Short could benefit from current investor complacency in a highly-valued equity market. We see more value in Europe than in the U.S., as the ECB lags behind the Fed in monetary tightening. Dollar weakness could create opportunities in emerging markets. Equity Market Neutral strategies are being held back by very low equity market volatility, although 2017 has proved to be a good year for stock picking, with falling cross-stock correlation in Europe and in the U.S. providing opportunities to differentiate between winners and losers in the market.

Marketing Material - Past performance is not indicative of future returns. Forecasts are not a reliable indicator of future performance. Readers should refer to disclosures and risk warnings at the end of this document. Produced in December 2017.

Credit Strategies and Even Driven / Multi-Strategy

We are also neutral on Credit Strategies and Event Driven / Multi-Strategy hedge funds. While the extended period of low interest rates and excess liquidity has an effect on all credit strategies, the relative levels of complexity, liquidity and differing barriers to entry have a varying impact on each different sub-strategy. Private credit, while generally attractive, should be differentiated by style. Direct lending has been a mainstay in this category but investment opportunities may be becoming less obvious. Our view on Event Driven / Multi-Strategy is driven by the fundamentals defining merger arbitrage and special situations investing. US and global merger activity has been significant this year, but is 20% down on its 2015 peak, with promising deal spreads more likely to be found in cross-border deals. Special situation investing has benefited from rising markets so far this year.

Distressed

Finally, we have a neutral/negative view on Distressed investing. The current extended period of low interest rates and compressed credit spreads has allowed companies easy access to debt capital markets and thus reduced interest expenses, helping reduce default rates to historic lows.

Our outlook for hedge fund strategies varies significantly by type of strategy.

Please see risk warnings for more information. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. No assurance can be given that any forecast or target will be achieved. Past performance is not indicative of future returns. * For the U.S., GDP measure is calendar year but inflation measure is Core PCE Dec to Dec %. Forecast for U.S. Headline PCE (Dec/Dec) is 1.7% in 2017 and 1.9% in 2018. U.S. GDP Q4/Q4 growth is 2.3% in both 2017 and 2018.Source: Deutsche Bank Wealth Management. As of December 8, 2017.

CIO InsightsData Tables25

Macroeconomic forecastsDeutsche Bank Wealth Management

DB WM 2017 Forecast DB WM 2018 Forecast

GDP growth (%)

U.S.*  2.2  2.3

Eurozone (of which)  2.3  2.0

Germany  2.4  2.1

France  1.8  2.0

Italy  1.4  1.2

UK  1.5  1.3

Japan  1.5  1.5

China  6.7  6.5

India  6.8  7.5

Russia  1.8  2.0

Brazil  0.3  1.8

World  3.7  3.8

Consumer price inflation (%)

U.S.*  1.5  1.8

Eurozone  1.5  1.4

UK  2.6  2.7

Japan  0.7  1.0

China  1.9  2.2

Current account balance (% of GDP)

U.S. –2.6 –2.8

Eurozone  3.1  2.9

UK –4.5 –3.5

Japan  3.5  3.5

China  1.8  1.8

Fiscal balance (% of GDP)

U.S. –3.5 –3.5

Eurozone –1.4 –1.3

UK –3.3 –3.5

Japan –4.8 –4.8

China –3.4 –3.2

F = Forecasts. Please see risk warnings for more information. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. No assurance can be given that any forecast or target will be achieved. Past performance is not indicative of future returns. Source: Deutsche Bank Wealth Management. As of December 8, 2017.

CIO InsightsData Tables26

Asset class forecastsDeutsche Bank Wealth Management

Official rate End-Dec 2018FBenchmark interest ratesU.S. Fed fund rates  1.75-2.00%Eurozone Refi rate  0%UK Repo rate  0.75%Japan Overnight call rate  0%FXEUR vs USD EUR/USD  1.15USD vs JPY USD/JPY  115EUR vs JPY EUR/JPY  132EUR vs GBP EUR/GBP  0.88GBP vs USD GBP/USD  1.30USD vs CNY USD/CNY  6.8

Market Index End-Dec 2018FEquitiesU.S. S&P 500  2,750Germany DAX  14,100Eurozone Eurostoxx 50  3,780Europe Stoxx 600  405Japan MSCI Japan  1,120Switzerland SMI  9,450UK FTSE 100  7,500Emerging Markets MSCI EM  1,210Asia ex Japan MSCI Asia ex Japan  760Latam MSCI Latam  2,850CommoditiesGold Gold spot  1,230Oil WTI spot  55Fixed IncomeU.S.UST 2yr U.S. 2yr yield  2.10%UST 10yr U.S. 10yr yield  2.60%UST 30yr U.S. 30yr yield  3.10%U.S. IG CORP BarCap U.S. Credit  80bpU.S. HY Barclays U.S. HY  350bpEuropeSchatz 2yr GER 2y yield –0.40%Bund 10yr GER 10y yield  0.80%Bund 30yr GER 30y yield  1.70%Gilt 10yr UK 10y yield  1.40%EUR IG Corp iBoxx Eur Corp all  75bpEUR HY ML Eur Non-Fin HY Constr. Index  260bpAsia PacificJGB 2yr JPN 2y yield –0.10%JGB 10yr JPN 10y yield  0.10%Asia Credit JACI Index  210bpGlobalEM Sovereign EMBIG Div  285bpEM Credit CEMBI  270bp

The Bank of England (BoE) is the UK central bank.

The Bank of Japan (BoJ) is the central bank of Japan.

Brexit is a combination of the words "Britain" and "Exit" and describes the possible exit of the United Kingdom of the European Union.

CHF is the currency code for the Swiss franc.

CNY is the currency code for the Chinese yuan.

CTA (Commodity Trading Advisors) strategies involve trading futures contracts traded on exchanges.

The DAX is a blue-chip stock-market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.

Discretionary macro strategies attempt to gain from macroeconomic, policy or political changes.

Duration measures show the sensitivity of the price of a bond to a change in interest rates, expressed in the number of years that a bond takes to be repaid through its internal cash flows.

The Energy Information Administration (EIA) is part of the U.S. Department of Energy and an agency of the U.S. Federal Statistical System.

The European Central Bank (ECB) is the central bank for the Eurozone.

The Eurostoxx 50 Index tracks the performance of blue-chip stocks in the Eurozone; the Eurostoxx 600 has a wider scope, taking in 600 companies across 18 European Union countries.

Exchange Traded Funds (ETFs) are investment funds traded on stock exchanges.

The Federal Reserve is the central bank of the United States. Its Federal Open Market Committee (FOMC) meets to determine interest rate policy.

The FTSE 100 Index tracks the performance of the 100 major companies trading on the London Stock Exchange.

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.

Hedge funds are alternative, less regulated investment vehicles using pooled funds that may use a number of different strategies in order to earn active return for their investors.

High yield (HY) bonds are high-paying bonds with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds.

An investment grade (IG) rating by a rating agency such as Standard & Poor's indicates that a bond has a relatively low risk of default.

Long/short equity strategies are investing strategies of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline.

The MOVE (Merrill Lynch Option Volatility Estimate) Index is a yield curve-weighted index of the normalized implied volatility on 1-month Treasury options.

The MSCI AC World Index captures large- and mid-cap companies across 23 developed- and 23 emerging-market countries.

The MSCI Asia ex Japan Index captures large- and mid-cap representation across 2 of 3 developed-market countries (excluding Japan) and 8 emerging-market countries in Asia.

The MSCI Latam Index includes large- and mid-cap firms in five Latin American countries.

The North American Free Trade Agreement (NAFTA) came into force in 1994 and covers the U.S., Mexico and Canada.

The People’s Bank of China (PBoC) is the central bank of the People's Republic of China.

Price/earnings (P/E) ratios measure a company's current share price relative to its per-share earnings. In this context, LTM refers to last twelve months' earnings.

Quantitative easing (QE) is an unconventional monetary policy tool, in which a central bank conducts a broad-based asset purchases.

The S&P 500 Index includes 500 leading U.S. companies capturing approximately 80% coverage of available U.S. market capitalization.

CIO InsightsGlossary27

Glossary

A spread is the difference in the quoted return on two investments, most commonly used in comparing bond yields.

Surprise indicators measure the extent to which published economic data meets expectations.

The Swiss Market Index (SMI) includes 20 large and mid-cap stocks.

The U.S. Dollar Index (DXY) is a weighted index based on the value of the U.S. dollar versus a basket of six other currencies.

The VIX Index is a measurement of volatility implied by S&P 500 Index options.

The VSTOXX Index measures the implied volatility of the Eurostoxx 50 Index options.

Volatility is the degree of variation of a trading-price series over time.

The yield curve shows the different rates for bonds of differing maturities but the same credit quality.

CIO InsightsGlossary28

Disclaimer

Past performance is not indicative of future returns. No assurance can be given that any forecast, investment objectives and/or expected returns will be achieved. Allocations are subject to change without notice. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. Investments are subject to investment risk, including market fluctuations, regulatory change, possible delays in repayment and loss of income and principal invested. Investments come with risk. The value of investments can fall as well as rise and you might not get back the amount originally invested at any point in time.

Investments in Foreign Countries – Such investments may be in countries that prove to be politically or economically unstable. Furthermore, in the case of investments in foreign securities or other assets, any fluctuations in currency exchange rates will affect the value of the investments and any restrictions imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate foreign currency.

Macroeconomics Risk – Such investments may be in countries that prove to be politically or economically unstable. Furthermore, in the case of investments in foreign securities or other assets, any fluctuations in currency exchange rates will affect the value of the investments and any restrictions imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate foreign currency.

Equity Market Risk – Risks in equity markets are linked to the change of spot and forward prices of equities on the relevant stock exchanges. These changes can be specifically influenced by, among others, the relevant companies’ financial health, dividend yields, repurchase rates and other macroeconomic factors.

Fixed Income Risk – The values of the fixed income instruments will fluctuate and may lose value, as bond values decline as interest rates rise. Certain bonds and fixed income instruments may be callable. If called, the investor will experience a shorter maturity than anticipated. Bonds referenced herein are exposed to credit risk, or the risk that the bond will be downgraded, and inflation risk, or the risk that the rate of the bond’s yield will not provide a positive return over the rate of inflation. Bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally the longer a bond’s maturity, the more sensitive it is to this risk. Bonds may also be subject to call risk, which is the risk that the issuer will redeem the debt at its option, fully or partially, before the scheduled maturity date. The market value of debt instruments may fluctuate, and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer. Bonds are subject to the credit risk of the issuer. This is the risk that the issuer might be unable to make interest and/or principal payments on a timely basis. Bonds are also subject to reinvestment risk, which is the risk that principal and/or interest payments from a given investment may be reinvested at a lower interest rate.

Alternative investments – (such Hedge Funds, Private Equity, Non Traded REITs) may be speculative and involve significant risks including illiquidity, heightened potential for loss and lack of transparency. Alternatives are not suitable for all clients.

Deutsche Bank AG, Deutsche Bank Wealth Management, as of October, 2017

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Important information

Deutsche Bank Wealth Management offers wealth management solutions for wealthy individuals, their families and select institutions worldwide. Deutsche Bank Wealth Management, through Deutsche Bank AG, its affiliated companies and its officers and employees (collectively “Deutsche Bank”) are communicating this document in good faith and on the following basis.

This document has been prepared without consideration of the investment needs, objectives or financial circumstances of any investor. Before making an investment decision, investors need to consider, with or without the assistance of an investment adviser, whether the investments and strategies described or provided by Deutsche Bank, are appropriate in light of their particular investment needs, objectives and financial circumstances. Furthermore, this document is for information/discussion purposes only and does not constitute an offer, recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice.

Deutsche Bank does not give tax or legal advice. Investors should seek advice from their own tax experts and lawyers, in considering investments and strategies suggested by Deutsche Bank. Investments with Deutsche Bank are not guaranteed, unless specified. Unless notified to the contrary in a particular case, investment instruments are not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental entity, and are not guaranteed by or obligations of Deutsche Bank AG or its affiliates.

Although information in this document has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness, and it should not be relied upon as such. All opinions and estimates herein, including forecast returns, reflect our judgment on the date of this report and are subject to change without notice and involve a number of assumptions which may not prove valid.

Investments are subject to various risks, including market fluctuations, regulatory change, counterparty risk, possible delays in repayment and loss of income and principal invested. The value of investments can fall as well as rise and you may not recover the amount originally invested at any point in time. Furthermore, substantial fluctuations of the value of the investment are possible even over short periods of time.

This publication contains forward-looking statements. Forward-looking statements include, but are not limited to assumptions, estimates, projections, opinions, models and hypothetical performance analysis. The forward-looking statements expressed constitute the author’s judgment as of the date of this material. Forward-looking statements involve significant elements of subjective judgments and analyses and changes thereto and/or consideration of different or additional factors could have a material impact on the results indicated. Therefore, actual results may vary, perhaps materially, from the results contained herein. No representation or warranty is made by Deutsche Bank as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained herein. The terms of any investment will be exclusively subject to the detailed provisions, including risk considerations, contained in the Offering Documents. When making an investment decision, you should rely on the final documentation relating to the transaction and not the summary contained herein.

This document may not be reproduced or circulated without our written authority. The manner of circulation and distribution of this document may be restricted by law or regulation in certain countries, including the United States. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, including the United States, where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Deutsche Bank to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions.

Past performance is no guarantee of future results; nothing contained herein shall constitute any representation or warranty as to future performance. Further information is available upon investor’s request.

This document may not be distributed in Canada, Japan, the United States of America, or to any U.S. person.

© 2017 Deutsche Bank AG

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Important information

Kingdom of BahrainFor Residents of the Kingdom of Bahrain: This document does not constitute an offer for sale of, or participation in, securities, derivatives or funds marketed in Bahrain within the meaning of Bahrain Monetary Agency Regulations. All applications for investment should be received and any allotments should be made, in each case from outside of Bahrain. This document has been prepared for private information purposes of intended investors only who will be institutions. No invitation shall be made to the public in the Kingdom of Bahrain and this document will not be issued, passed to, or made available to the public generally. The Central Bank (CBB) has not reviewed, nor has it approved, this document or the marketing of such securities, derivatives or funds in the Kingdom of Bahrain. Accordingly, the securities, derivatives or funds may not be offered or sold in Bahrain or to residents thereof except as permitted by Bahrain law. The CBB is not responsible for performance of the securities, derivatives or funds.

State of KuwaitThis document has been sent to you at your own request. This presentation is not for general circulation to the public in Kuwait. The Interests have not been licensed for offering in Kuwait by the Kuwait Capital Markets Authority or any other relevant Kuwaiti government agency. The offering of the Interests in Kuwait on the basis of a private placement or public offering is, therefore, restricted in accordance with Decree Law No. 31 of 1990 and the implementing regulations thereto (as amended) and Law No. 7 of 2010 and the bylaws thereto (as amended). No private or public offering of the Interests is being made in Kuwait, and no agreement relating to the sale of the Interests will be concluded in Kuwait. No marketing or solicitation or inducement activities are being used to offer or market the Interests in Kuwait.

United Arab EmiratesDeutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated by the Dubai Financial Services Authority. Deutsche Bank AG – DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority.

State of QatarDeutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower, West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre Regulatory Authority.

Kingdom of Saudi ArabiaDeutsche Securities Saudi Arabia LLC Company, (registered no. 07073-37) is regulated by the Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya District, P.O. Box 301809, Faisaliah Tower – 17th Floor, 11372 Riyadh, Saudi Arabia.

United Arab EmiratesDeutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated by the Dubai Financial Services Authority. Deutsche Bank AG – DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority.

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Important disclosures

In the U.K. this publication is considered a financial promotion and is approved by Deutsche Asset Management (U.K.) Limited on behalf of all entities trading as Deutsche Bank Wealth Management in the U.K.

Deutsche Bank Wealth Management (DBWM) offers wealth management solutions for wealthy individuals, their families and select institutions worldwide and is part of the Deutsche Bank Group. DBWM is communicating this document in good faith and on the following basis.

This document is a financial promotion and is for general information purposes only and consequently may not be complete or accurate for your specific purposes. It is not intended to be an offer or solicitation, advice or recommendation, or the basis for any contract to purchase or sell any security, or other instrument, or for Deutsche Bank to enter into or arrange any type of transaction as a consequence of any information contained herein. It has been prepared without consideration of the investment needs, objectives or financial circumstances of any investor. This document does not identify all the risks (direct and indirect) or other considerations which might be material to you when entering into a transaction. Before making an investment decision, investors need to consider, with or without the assistance of an investment adviser, whether the investments and strategies described or provided by Deutsche Bank, are suitability and appropriate, in light of their particular investment needs, objectives and financial circumstances. We assume no responsibility to advise the recipients of this document with regard to changes in our views.

Past performance is no guarantee of future results.

The products mentioned in this document may be subject to investment risk including market fluctuations, regulatory change, counterparty risk, possible delays in repayment and loss of income and principal invested. Additionally, investments denominated in an alternative currency will be subject to currency risk, changes in exchange rates which may have an adverse effect on the value, price or income of the investment. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. We have gathered the information contained in this document from sources we believe to be reliable; but we do not guarantee the accuracy, completeness or fairness of such information and it should not be relied on as such. Deutsche Bank has no obligation to update, modify or amend this document or to otherwise notify the recipient in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Deutsche Bank does not give taxation or legal advice. Prospective investors should seek advice from their own taxation agents and lawyers regarding the tax consequences on the purchase, ownership, disposal, redemption or transfer of the investments and strategies suggested by Deutsche Bank. The relevant tax laws or regulations of the tax authorities may change at any time. Deutsche Bank is not responsible for and has no obligation with respect to any tax implications on the investment suggested.

This document may not be reproduced or circulated without our written authority. The manner of circulation and distribution of this document may be restricted by law or regulation in certain countries, including the United States. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, including the United States, where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Deutsche Bank to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions.

This document contains forward-looking statements. Forward-looking statements include, but are not limited to assumptions, estimates, projections, opinions, models and hypothetical performance analysis. The forward-looking statements expressed constitute the author‘s judgement as of the date of this material. Forward-looking statements involve significant elements of subjective judgments and analyses and changes thereto and/or consideration of different or additional factors could have a material impact on the results indicated. Therefore, actual results may vary, perhaps materially, from the results contained herein. No representation or warranty is made by Deutsche Bank as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained in this document.

Deutsche Bank conducts its business according to the principle that it must manage conflicts of interest fairly, both between itself and its clients and between one client and another.

As a global financial services provider, Deutsche Bank faces actual and potential Conflicts of Interest periodically. The Bank’s policy is to take all reasonable steps to maintain and operate effective organisational and administrative arrangements to identify and manage relevant conflicts. Senior management within the Bank are responsible for ensuring that the Bank’s systems, controls and procedures are adequate to identify and manage Conflicts of Interest.

This information is communicated by Deutsche Bank Wealth Management.Deutsche Bank Wealth Management is a trading name of Deutsche Asset Management (U.K.) Limited. Registered in England & Wales No 5233891.Registered Office: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Asset Management (U.K.) Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Registration Number 429806.This document may not be distributed in Canada, Japan, the United States of America, or to any U.S. person.

© 2017 Deutsche Bank AG

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Risk warnings

Investments are subject to investment risk, including market fluctuations, regulatory change, possible delays in repayment and loss of income and principal invested. The value of investments can fall as well as rise and you might not get back the amount originally invested at any point in time.

Investments in Foreign Countries – Such investments may be in countries that prove to be politically or economically unstable. Furthermore, in the case of investments in foreign securities or other assets, any fluctuations in currency exchange rates will affect the value of the investments and any restrictions imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate foreign currency.

Foreign Exchange/Currency – Such transactions involve multiple risks, including currency risk and settlement risk. Economic or financial instability, lack of timely or reliable financial information or unfavorable political or legal developments may substantially and permanently alter the conditions, terms, marketability or price of a foreign currency. Profits and losses in transactions in foreign exchange will also be affected by fluctuations in currency where there is a need to convert the product’s denomination(s) to another currency. Time zone differences may cause several hours to elapse between a payment being made in one currency and an offsetting payment in another currency. Relevant movements in currencies during the settlement period may seriously erode potential profits or significantly increase any losses.

High Yield Fixed Income Securities – Investing in high yield bonds, which tend to be more volatile than investment grade fixed income securities, is speculative. These bonds are affected by interest rate changes and the creditworthiness of the issuers, and investing in high yield bonds poses additional credit risk, as well as greater risk of default.

Hedge Funds – An investment in hedge funds is speculative and involves a high degree of risk, and is suitable only for “Qualified Purchasers” as defined by the U.S. Investment Company Act of 1940 and “Accredited Investors” as defined in Regulation D of the 1933 Securities Act. No assurance can be given that a hedge fund’s investment objective will be achieved, or that investors will receive a return of all or part of their investment.

Commodities – The risk of loss in trading commodities can be substantial. The price of commodities (e.g., raw industrial materials such as gold, copper and aluminium) may be subject to substantial fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. Additionally, valuations of commodities may be susceptible to such adverse global economic, political or regulatory developments. Prospective investors must independently assess the appropriateness of an investment in commodities in light of their own financial condition and objectives. Not all affiliates or subsidiaries of Deutsche Bank Group offer commodities or commodities-related products and services.

Investment in private equity funds is speculative and involves significant risks including illiquidity, heightened potential for loss and lack of transparency. The environment for private equity investments is increasingly volatile and competitive, and an investor should only invest in the fund if the investor can withstand a total loss. In light of the fact that there are restrictions on withdrawals, transfers and redemptions, and the funds are not registered under the securities laws of any jurisdictions, an investment in the funds will be illiquid. Investors should be prepared to bear the financial risks of their investments for an indefinite period of time.

Investment in real estate may be or become nonperforming after acquisition for a wide variety of reasons. Nonperforming real estate investment may require substantial workout negotiations and/or restructuring.

Environmental liabilities may pose a risk such that the owner or operator of real estate may become liable for the costs of removal or remediation of certain hazardous substances released on, about, under, or in its property. Additionally, to the extent real estate investments are made in foreign countries, such countries may prove to be politically or economically unstable. Finally, exposure to fluctuations in currency exchange rates may affect the value of a real estate investment.

Structured solutions are not suitable for all investors due to potential illiquidity, optionality, time to redemption, and the payoff profile of the strategy. We or our affiliates or persons associated with us or such affiliates may: maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation. Calculations of returns on the instruments may be linked to a referenced index or interest rate. In such cases, the investments may not be suitable for persons unfamiliar with such index or interest rates, or unwilling or unable to bear the risks associated with the transaction. Products denominated in a currency, other than the investor’s home currency, will be subject to changes in exchange rates, which may have an adverse effect on the value, price or income return of the products. These products may not be readily realizable investments and are not traded on any regulated market.

Contact us on [email protected]

Global Chief Investment OfficerChristian Nolting1

Regional Chief Investment OfficerLarry V. Adam4

CIO Americas

Tuan Huynh5

CIO Asia

Stéphane Junod8

CIO EMEA

Johannes Müller1

CIO Germany

International locations1. Deutsche Bank AG

Mainzer Landstrasse 11-17 60329 Frankfurt am Main Germany

2. Deutsche Bank AG, London ZigZag Building, 70 Victoria Street London SW1E 6SP UK

3. Deutsche Bank Trust Company 345 Park Avenue 10154-0004 New York, NY United States

4. Deutsche Bank Securities 1 South Street 21202-3298 Baltimore, MD United States

5. Deutsche Bank AG, Singapore One Raffles Quay, South Tower 048583 Singapore Singapore

6. Deutsche Bank AG, Hong Kong 1 Austin Road West Hong Kong Hong Kong

7. Deutsche Bank (Switzerland) Ltd. Hardstrasse 201 8005 Zurich Switzerland

8. Deutsche Bank (Switzerland) Ltd. Place des Bergues 3 1211 Geneva 1 Switzerland

9. Deutsche Bank Trust Company Floor 1, 5022 Gate Parkway, Suite 400 32256 Jacksonville, FL United States

Strategy GroupLarry V. Adam4

Global Chief Strategist

Matt Barry4

Investment Strategy Analyst

Moshe Levin4 Investment Strategy Analyst

Dr. Helmut Kaiser1

Chief Strategist Germany

Daniel Kunz7

Senior Strategist EMEA

Chief Investment OfficeMarkus Müller1

Global Head CIO Office

Sebastian Janker1

Head CIO Office Germany

Jürg Schmid7

Head CIO Office EMEA

Graham Richardson2

Financial Writer, CIO Office

Khoi Dang9

CIO Office Americas

Enrico Börger8

CIO Office EMEA

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Contacts CIO Wealth Management