[ ] WEEKLY CHANGES AGAINST THE USD

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1 January 15, 2018 [ ] MACRO & MARKETS COMMENTARY» The European central bank (ECB) has indicated it should revisit its communication stance in early 2018, according to the ECB s minutes of December meeting suggesting that policymakers are preparing to cut its crisis stimulus program faster than anticipated. The continued robust expansion in the Eurozone economic should weigh on the monetary policy stance in the area.» The US dollar fell last week to its lowest level since January 2015 as expectations of monetary tightening outside the U.S made the U.S dollar less attractive. U.S. Dollar spot index (DXY - the index that tracks the performance of the US Dollar against major world currencies) dropped for the 04th consecutive week, declining by 1.06% or 0.97 points closing its weekly trading session at point on Friday the 12th of January, compared to at last week s close. In the Eurozone, The EUR/USD surged on Friday, closing its weekly trading session higher by 1.44% (or 173 pips) to $ per euro on Friday, the 12th of January 2018.» The rally of crude oil prices continued to gain momentum for the fourth consecutive weeks on improving global outlook and tighter supply. The U.S Energy Information Agency (EIA) reported that crude oil inventory fell by million on the 05th of January [Expected decline was at 3.44 M]. West Texas intermediate future contracts (February 2018 delivery) rose by 4.16% [or $2.57] per barrel to $64.30 per barrel. WEEKLY CHANGES AGAINST THE USD MAJOR MARKETS 35% 30% 25% 20% 15% 10% 5% 0% (5%) 1.37% 4.65% 3.33% 1.44% 1.16% (1.76%) (0.30%) 2.87% 32.34% GOLD WTI BRENT EUR GBP JPY CNY US 10Y Yield GE 10Y Yield ECB is the central bank for the euro and administers monetary policy of the EuroZone, which consists of 19 EU member states and is one of the largest currency areas in the world.

2 » The international oil benchmark (Brent crude future contracts for March 2018 delivery) rose by 3.08% W/W [or $2.09] per barrel, closing its weekly trading session at $69.87 on Friday, the 12th of January 2018.» U.S government bonds weakened during the week, pushing the yield lower after inflation data beat expectations [including core CPI data]. The yield on the two-year note settled at 2.001% on Friday marking the first time it closed above 2% since September Yield on the benchmark 10 year treasury rose by 7.1 basis points (bps) or 2.87% over the week, closing its weekly trading session at 2.548% on the 12th of January ECONOMIC DATA & EVENTS FROM THE LAST WEEK. U.S.A & CANADA Initial jobless claims in the United States climbed more than expected to 261K in the week ending January 06 following 250K in the preceding week. MBA mortgage applications increased 8.3% in the week ending January 05 compared to 0.7% increase in the previous week. CPI inflation decelerated to 0.1% M/M in December as expected from 0.4% M/M in November. Excluding food and energy, inflation accelerated to 0.3% M/M in December from 0.1% M/M in November. PPI final demand unexpectedly fell 0.1% M/M in December following 0.4% M/M increase in November. Retail sales advance rose 0.4% M/M in December following the revised up reading to 0.9% in November. In Canada, building permits fell 7.7% M/M in November following the revised up increase to 4.4% M/M in October. Housing starts fell more than expected to 217K in December from 251.7K in November (revised down). UK & JAPAN Industrial production in the United Kingdom increased 0.4% M/M in November as expected following the revised up increase to 0.2% M/M in October. In Japan, the current account posted a surplus of billion in November following billion surplus registered in October. EUROZONE Consumer confidence index in the Euro Area was confirmed at 0.5 in December final estimate as expected. Industrial production in Germany increased by a seasonally adjusted 3.4% M/M in November, which is more than expected, and following the revised up reading to - 1.2% M/M in October. Factory orders fell 0.4% M/M in November following the revised up increase to 0.7% M/M in October. In France, industrial production fell 0.5% M/M in November as expected following the revised down increase to 1.7% M/M in October. Retail sales in Italy climbed 1.4% Y/Y in November following 2.3% Y/Y decline in October. CPI inflation in Spain was unexpectedly revised down to 1.1% Y/Y in December final estimate from 1.2% Y/Y previously estimated.

3 EMERGING MARKET, Retail sales in Brazil increased 5.9% Y/Y in November compared to 3.8% Y/Y increase expected and following the revised up increase to 2.6% Y/Y in October. In India, industrial production increased 8.4% Y/Y in November compared to 2.2% Y/Y increase in October. CPI inflation in China accelerated slightly to 1.8% Y/Y in December from 1.7% Y/Y in November. PPI increased 4.9% Y/Y in December compared to 4.8% Y/Y expected and following 1.7% Y/Y increase in November. The Chinese trade balance posted a surplus of $54.69 billion in December following the revised down reading to $38.98 billion in November. Russian gold and FOREX reserve edged up to $432.6 billion in the week ending January 05 from $432 billion in the prior week. CPI inflation was confirmed at 2.5% Y/Y in December final estimate. Core inflation remained stable at 0.2% Y/Y in December, the same as in November. GCC & MENA, The Turkish current account posted a deficit of $4.2 billion in November following the revised down deficit to $3.74 billion in October.

4 WEEKLY CLOSING FX CHART POUND STERLING WEEKLY CLOSING FX CHART EURO & JAPANESE YEN 1.80 GBP/USD Jan 12 CLOSE $ EUR / USD Jan 12 CLOSE $ USD / JPY Jan 12 CLOSE WEEKLY CLOSING CRUDE OIL USD PER BARREL WEEKLY CLOSING SPOT GOLD USD PER OUNCE 150 NYMEX WTI CRUDE WEEKLY CLOSING JAN 12 CLOSE $64.30 ICE BRENT CRUDE WEEKLY CLOSING JAN 12 CLOSE $ ,450 Gold Spot price, quoted as US Dollars per Troy Ounce Jan 12 CLOSE $ , , ,000 WEEKLY CLOSING GOVERNMENT BOND YIELDS USA & GERMANY WEEKLY CLOSING GOVERNMENT BOND YIELDS ITALY & SPAIN U.S 10 - year government Bond Jan 12 CLOSE 2.55% Italy 10 - year government Bond Jan 12 CLOSE 1.98% 3.5 Germany 10 - year government Bond Jan 12 CLOSE 0.58% 4.5 Spain 10 - year government Bond Jan 12 CLOSE 1.49%

5 PROFIT RATE BENCHMARK ENERGY / COMMODITIES USD TENOR LIBOR SIBOR SAR - DEP LAST PRICE WTD 1 - Month GOLD - SPOT 1, % 3 - Month SILVER - SPOT % 6 - Month ALUMINUM - LME 3 MTH 2, (2.89%) 9 - Month COPPER - LME 3 MTH 7, (1.74%) 12 - Month WTI - NYMEX % BRENT - ICE % Foreign Exchange STOCKS INDEXES WEEKLY CLOSING Spot SAR Equ WTD Index Closed WTD GBP / USD % S&P 500 2, % EUR / USD % Dow Jones 25, % AUD / USD % NASDAQ 7, % USD / CHF % FTSE 100 7, % USD / CAD (1.26%) DAX Index 13, % USD / JPY % CAC Index 5, % USD / CNY (0.28%) Nikkei , % USD / SAR % TASI Index 7, % WEEK AHEAD ECONOMIC CALENDAR DATE COUNTRY ECONOMIC RELEASE /EVENTS PERIOD EXPECTED * PRIOR IMPORTANCE Mon 15 / 01 10:00 TU Unemployment Rate Oct % Tue 16 / 01 10:00 GE CPI YoY Dec F 1.70% 1.70% Tue 16 / 01 10:00 GE CPI MoM Dec F 0.60% 0.60% Tue 16 / 01 12:30 UK CPI YoY Dec 3.00% 3.10% Tue 16 / 01 12:30 UK CPI MoM Dec 0.40% 0.30% Tue 16 / 01 12:30 UK CPI Core YoY Dec 2.60% 2.70% Wed 17 / 01 13:00 EC CPI YoY Dec F 1.40% 1.50% Wed 17 / 01 15:00 US MBA Mortgage Applications 12-Jan % Wed 17 / 01 17:15 US Industrial Production MoM Dec 0.40% 0.20% Thu 18 / 01 10:00 CH GDP YoY 4Q 6.70% 6.80% Thu 18 / 01 14:00 TU Benchmark Repurchase Rate 18-Jan 8.00% 8.00% Thu 18 / 01 14:00 TU Overnight Lending Rate 18-Jan 9.25% 9.25% Thu 18 / 01 16:30 US Initial Jobless Claims 13-Jan 250k 261k Thu 18 / 01 16:30 US Housing Starts Dec 1275k 1297k Fri 19 / 01 18:00 US U. of Mich. Sentiment Jan P Source: Bloomberg for forecasting

6 THE WEEKLY ECONOMIC COMMENTARY IS PREPARED & EDITED BY: ABDULKARIM I. ALKADRI Research - Senior Analyst / aialkadri@bankalbilad.com TREASURY CONTACT LIST SAMER.M.A. FARHOUD General Manager - Treasury Division Sm.farhoud@Bankalbilad.com SAJJAD HUSSAIN Chief Dealer S.hussain@bankalbilad.com FOREIGN EXCHANGE Ext Fxdesk@bankalbilad.com MONEY MARKET Ext MMDesk@bankalbilad.com SALES & BANKNOTES Salesdesk@bankalbilad.com TREASURY SUPPORT Halosaimi@bankalbilad.com DISCLOSURE APPENDIX ANALYST DISCLAIMER Research analyst (s) responsible for the content of this research report certify that the views expressed and attributed to the research analyst (s) in the research report accurately reflect their personal views about the subject matters discussed. No part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research report. The views of the author (s) do not necessarily reflect the views of Bank Al Bilad and are subject to change without notice. ADDITIONAL DISCLOSURES This report is dated as at 15 January All market data included in this report are dated as at close 13 January 2018, unless otherwise indicated in this report. DISCLAIMER This report is prepared for information purpose only. It should not be construed as an offer to sell or a solicitation of an offer to purchase or subscribe to any investment. Although the information contained in this report is obtained from many sources believed to be reliable, Bank Al Bilad does not guarantee its completeness or accuracy. To the extent permitted by applicable laws and regulations in the Kingdom of Saudi Arabia, neither Bank Al Bilad nor any of its affiliates, their directors, officers and employees will be liable or have any responsibility of any kind for any loss or damage that may be incurred as a result of using the information contained in this report.