OFP Monthly Charts Report

Economic analysis and Assets performance

07/31/2014 - 08/31/2014

August 2014 - Monthly 8

Key elements of the month

Main elements of past month

� The global economy growth rate slows under the weakness of the Euro zone, Japan and the BRIC (Brazil, Russia, India, and China).

� Very significant decrease in long-term interest rates for developed countries (German 10Y under 1%, France 10Y is at 1.25%).

� Rise in international political tensions (Ukraine, Middle East).

Europe

� Inflation slightly down in the Euro Zone 0.3% (against 0.4% in July) with a commodity effect. Slight increase in the underlying inflation at 0.9% against 0.8%.

� Decrease in the IFO business confidence index in Germany, downside risk linked to geopolitical tensions in Ukraine.

� Sharp rise in unemployment in France and deterioration in industry confidence surveys. Slight improvement in services.

North and South America

� NAHB index comes back to 55 and suggests a momentum supported to construction thanks to a general trend of low interest rates (08/18).

� GDP 2nd revision in the United States came out at 4.2% annual rate, upward revision mainly due to investment (08/28).

� In Brazil, no change in the main indicators: Industrial PMI in decline (08/27) and the same for household confidence (08/25).

Asia & Pasific

� Japanese economy in sharp contraction in the 2nd quarter (-6.8% compared to Q1) and very low bounce expected for Q3.

� Concerns on Chinese real estate remain, increasing the probabilities of default from real estate developers.

� South Korea policy rates decrease to cope with the global economic downturn.

Commodities Markets

� Small change in North American grain products, Corn and Wheat remain unchanged despite concerns about the Ukrainian harvest.

� On August, WTI price recorded a significant drop (about $5 per barrel), which is a good sign for oil at the pump.

� At the international level, ocean freight rates (containers) showed a slight increase (Harpex index).

2 OFP Monthly Economic Report - 08/31/2014

Prolog - World

OFP Monthly Economic Report - 08/31/2014 3

Prolog - World

Confidence of Purchasing Managers (1/2)

Significant deceleration in confidence indices. Only American purchaseing leaders see a sharp rebound in confidence and in

activity outlooks, with the long-term interest rates decline and the strong equity

market performance.

Source : Oaks Field Partners, Markit, @TTStanton. Source : Oaks Field Partners, Institute for Supply Management, Markit, @TTStanton.

OFP Monthly Economic Report - 08/31/2014 5

42,3

44,0

45,7

47,5

49,2

51,0

52,7

54,4

56,2

57,9

59,7

08/2011 02/2012 08/2012 02/2013 08/2013 02/2014 08/2014

Eurozone - Manufacturing PMI

UK - Manufacturing PMI

Fig. 1 : Business confidence (Europe)

44,0

45,5

47,0

48,4

49,9

51,3

52,8

54,3

55,7

57,2

58,6

08/2011 02/2012 08/2012 02/2013 08/2013 02/2014 08/2014

US - Manufacturing ISM

Brazil - Manufacturing PMI

Fig. 2 : Business confidence (America)

Prolog - World

Consumer Price Indices

Source : Oaks Field Partners, Bureau of Labor Statistics, European Central Bank, UK Office for

National Statistics, @TTStanton.

Source : Oaks Field Partners, IBGE, National Bureau of Statistics, @TTStanton.

OFP Monthly Economic Report - 08/31/2014 9

- 3,06

- 2,10

- 1,14

- 0,18

0,78

1,74

2,70

3,66

4,62

5,58

6,54

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US- IPC YOY

Euro Zone - Inflation HICP

UK- IPC EU YOY

Fig. 9 : Consumer price indices (Developped countries)

- 3,1

- 1,8

- 0,5

0,8

2,2

3,5

4,8

6,1

7,4

8,8

10,1

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China - IPC YOY

Brazil - IPC YOY

Fig. 10 : Consumer price indices (Emerging countries)

Euro Area analytics - UK and EMU

Table of contents

Business confidence 17Credit to non-financial companies 19Current account 20Effective exchange rate 21Equity marquet 13Exchange rate 21Harmonised inflation YoY 14Household confidence 17Household saving rate 19Industrial production (IP) 16Long-term money supply 18Monthly fluctuations in employment 15Public deficit (% of GDP) 22Real estate 22Retail sales in volume 16Short and long-term interest rates 13Short-term money supply 18Trade balances 20Unemployment rate 15Wage trends 14

12 OFP Monthly Economic Report - 08/31/2014

Euro Area analytics - UK and EMU

Inflation & Wages growth rate

The decline in commodities prices contribute to the decline in inflation in Europe. Growth without inflation. England surprises for the non-reactivity of wages to

domestic growth.

Source : Oaks Field Partners, German Federal Statistical Office, UK Office for National Statistics,

@TTStanton.

Source : Oaks Field Partners, UK Office for National Statistics, @TTStanton.

14 OFP Monthly Economic Report - 08/31/2014

- 1,36

- 0,68

0,00

0,68

1,36

2,04

2,72

3,40

4,08

4,76

5,44

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Germany - IPC YOY

UK- IPC EU YOY

Fig. 15 : Harmonised inflation YoY

- 4,1

- 2,9

- 1,7

- 0,5

0,7

1,9

3,1

4,3

5,5

6,7

7,9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

UK - Average Weekly Earnings YOY

Fig. 16 : Wage trends

Euro Area analytics - UK and EMU

Monthly change in payrolls & Unemployment Rate

France remains in a significant worsening trend (+26 100 job seekers in July)1.

(1) http://travail-emploi.gouv.fr/etudes-recherches-statistiques-de,76/etudes-et-recherches,77/publications-dares,98/dares-analyses-dares-indicateurs,102/2014-065-demandeurs-d-emploi,17959.html

Source : Oaks Field Partners, Deutsche Bundesbank, French Labor Office, UK Office for National

Statistics, @TTStanton.

Source : Oaks Field Partners, Deutsche Bundesbank, Eurostat, INSEE National Statistics Office,

Istat (Institut national des statistiques italien) , ONS (Office for National Statistics), @TTStanton.

OFP Monthly Economic Report - 08/31/2014 15

- 126

- 97

- 68

- 38

- 9

21

50

80

109

139

168

2006 2007 2008 2009 2010 2011 2012 2013 2014

Germany - Job creation and destruction MoM

France - Job Seekers Total Change MoM

UK - Jobs Creation/Destruction MoM

Fig. 17 : Monthly fluctuations in employment

2,0

4,7

7,4

10,1

12,8

15,5

18,2

20,9

23,6

26,3

29,0

2004 2006 2008 2010 2012 2014

Germany - Unemployment Rate

France - Unemployment Rate

UK - Unemployment Rate

Spain - Unemployment Rate

Italy - Unemployment Rate

Fig. 18 : Unemployment rate

Euro Area analytics - UK and EMU

Trade Balance & Current Account

Source : Oaks Field Partners, Bank of Spain, Deutsche Bundesbank, ISTAT, Ministry of the

Economy (France), UK Office for National Statistics, @TTStanton.

Source : Oaks Field Partners, German Federal Statistical Office, INE, INSEE National Statistics

Office, Istat (Institut national des statistiques italien) , ONS (Office for National Statistics),

@TTStanton.

20 OFP Monthly Economic Report - 08/31/2014

-13 414

-9 835

-6 255

-2 676

903

4 483

8 062

11 641

15 221

18 800

22 379

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Germany - Trade Balance

France - Trade Balance

UK - Trade Balance

Spain - Trade Balance

Italy - Trade Balance

Fig. 27 : Trade balances

- 12,9

- 10,6

- 8,3

- 6,0

- 3,8

- 1,5

0,8

3,1

5,4

7,7

9,9

2004 2006 2008 2010 2012 2014

Germany - Current Account Balance

France - Current Account Balance

UK - Current Account Balance

Spain - Current Account Balance

Italy- Current Account Balance

Fig. 28 : Current account

Americas analytics - North and South America

Retail Sales & Industrial Production

Brazil confirms its slowdown. Brazilian recession (Negative GDP on Q1 and Q2) will weigh heavily on general

elections results on 5th October, 2014.

Source : Oaks Field Partners, ANTAD, IBGE, STCA - Statistics Canada, U.S. Census Bureau,

@TTStanton.

Source : Oaks Field Partners, Federal Reserve, IBGE, INEGI, STCA - Statistics Canada, @TTStanton.

28 OFP Monthly Economic Report - 08/31/2014

- 14,8

- 11,4

- 8,0

- 4,6

- 1,2

2,2

5,6

9,0

12,4

15,8

19,2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US - Retail Sales YOY

Canada - Retail Sales YOY

Mexico -Retail Sales YOY

Brazil - Retail Sales YOY

Fig. 39 : Retail sales

- 21,5

- 17,0

- 12,5

- 8,0

- 3,5

1,0

5,5

10,0

14,5

19,0

23,5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US - IP Canada - IP

Mexico - IP Brazil - IP

Fig. 40 : Industrial production

Comments on Financial Assets

Bond Markets

Source : Oaks Field Partners, Bundesbank, European Central Bank, @TTStanton. Source : Oaks Field Partners, BGN, Banca d'Italia, Banque de France, @TTStanton.

OFP Monthly Economic Report - 08/31/2014 49

- 0,68

- 0,08

0,52

1,12

1,72

2,32

2,92

3,52

4,12

4,72

5,32

ECB - Refinancing rate

Germany - Rate 2 Year

Germany - Rate 10 Year

Fig. 73 : ECB interest rates and German interest rates

0,49

1,25

2,01

2,77

3,53

4,29

5,05

5,81

6,57

7,33

8,09

France - Rate 10 Year

Italy - Rate 10 Year

Spain - Rate 10 Year

Fig. 74 : Main European interest rates

Comments on Financial Assets

Energy - Crude Oil (Barrel) & Gasoline per Gallon

Decline in global growth and high inventories take part in the decline in oil prices.

Source : Oaks Field Partners, ICE, NYM, @TTStanton. Source : Oaks Field Partners, American Automobile Association, NYM, @TTStanton.

OFP Monthly Economic Report - 08/31/2014 59

14

29

43

58

73

87

102

116

131

145

160

Crude Oil WTI Index

Brent Index

Fig. 89 : Oil (WTI: Texas & Brent: North Sea)

1,31

1,63

1,95

2,27

2,59

2,91

3,23

3,55

3,87

4,19

4,51

20

34

48

62

76

90

104

118

131

145

159

Crude Oil WTI Index (L. Scale)

Gasoline - National average (R. Scale)

Fig. 90 : Oil and gas (USA)

Performances of Main Asset Classes

Table of contents - Equity Markets

TS 1 month 3 months 6 months 1 year 2014 2 years Value

WorldMSCI AC WORLD VALUE - 0,38% + 1,97% + 5,73% + 17,82% + 6,00% + 33,45% 204,79

Developped MarketsMSCI Daily Net TR World Euro + 2,22% + 6,05% + 10,73% + 21,22% + 12,17% + 35,07% 179,78

S&P 500 Total Return + 1,52% + 4,68% + 8,84% + 25,25% + 10,32% + 48,28% 3643,3

Canada S&P/TSX 60 Total Return Index + 1,05% + 8,14% + 12,05% + 27,19% + 16,94% + 38,91% 2188,8

Germany DAX Index - 1,80% - 4,76% - 2,29% + 16,87% - 1,24% + 35,08% 9470,2

France CAC 40 Total Return + 1,17% - 2,54% + 2,03% + 15,10% + 5,17% + 37,67% 10042

Italy FTSE MIB Net Total Return - 2,91% - 5,11% + 1,68% + 25,33% + 9,66% + 43,70% 30233

Spain IBEX 35 Net Return - 1,44% + 0,30% + 8,13% + 34,14% + 11,09% + 58,35% 22146

United Kingdom FTSE 100 Tot. Return + 1,13% + 0,67% + 2,44% + 10,13% + 3,85% + 27,65% 5110,8

Nikkei Total Return Index - 0,15% + 5,62% + 4,89% + 17,11% - 3,72% + 76,31% 22539

Australia S&P/ASX 200 Net Tot Ret + 1,50% + 3,38% + 6,20% + 14,10% + 8,63% + 40,20% 46536

New Zealand Portfolio Index + 0,97% + 0,88% + 5,67% + 15,33% + 10,04% + 46,12% 3168,3

Emerging MarketsMSCI Emerging Markets + 3,07% + 10,85% + 20,07% + 20,11% + 16,31% + 14,06% 323,68

Bovespa + 6,00% + 19,61% + 30,14% + 22,55% + 19,55% + 6,83% 61288

Mexico IPC 35 Total Return + 2,80% + 10,31% + 17,65% + 15,56% + 6,72% + 14,33% 45628

Poland WIG 20 Total Return + 0,69% + 1,20% - 1,89% + 5,55% + 2,77% + 16,76% 3768,7

MICEX Index + 0,89% - 2,19% - 3,05% + 2,64% - 6,30% - 2,53% 1400,7

CSI 300 Total Return Index + 3,69% + 10,94% + 10,20% + 3,90% + 4,25% + 11,28% 2690,7

India National Stock Exchange + 2,28% + 10,80% + 27,87% + 47,21% + 27,25% + 54,13% 10457

Jakarta Composite Index + 0,94% + 4,96% + 11,18% + 22,45% + 21,93% + 25,50% 5136,9

Stock Exchange of Thailand SET + 1,73% + 10,48% + 18,97% + 22,22% + 21,51% + 33,38% 8646,1

62 OFP Monthly Economic Report - 08/31/2014

Next Month

Europe

� Monthly ECB meeting, details on the ABS purchase plan, but no implementation in September (09/04).

� France, announcements of the new government, what reforms will be waited for the beginning of September?

� Geopolitical tensions development in Ukraine.

North and South America

� Retail sales in August in the United States will be released on 09/12 in a falling oil price context.

� Housing starts (new homes) in the USA on 09/18 will allow seeing the first effects of lower interest rates after the very good Architecture Billing Index.

� In Brazil, the central bank meeting (COPOM on 09/03) will have to be followed in a cycle of easing credit conditions (lower RRR 07/28).

Asia & Pacific

� BoJ (Japan) meeting on September 4th an precisions from Shinzo Abe about the possibility to extend the Japanese bond purchase program.

� Monetary dynamics in China (10-15 September), with government help to avoid a sudden growth deceleration.

� Monetary policy meeting of the New Zealand central bank (maintenance or recovery rate hike cycle) (11th September).

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