WEEKLY CHANGES AGAINST THE USD MACRO & MARKETS COMMENTARY

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1 July 10, 2017 [ W E E K LY E C O N O M I C C O M M E N TA R Y ] WEEKLY ANALYSIS FOR THE MOST CRITICAL ECONOMIC AND FINANCIAL DEVELOPMENTS MACRO & MARKETS COMMENTARY» The minutes of FOMC meeting in June showed that policymakers are divided over when to start to wind down the $4.5 trillion balance sheet. Fed members expressed a range of views about the appropriate timing for a change in reinvestment policy. Those who prefer to delay the decision until the end of the year wanted additional time to assess the outlook for economic activities and inflation.» Dollar spot index (DXY - the index that tracks the performance of the U.S. dollar against major world currencies) rose by 0.40% (or 0.38 points) over the week, closing its weekly trading session at points on the 07th of July, compared to at last week s close. EUR/USD fell slightly by 0.22% [or 25 pips], closing its weekly trading session at $ per Euro on Friday, the 07th of July 2017.» Crude oil benchmarks fell last week as expanded U.S drilling activities and the increase in U.S oil production offset the recent decline in the crude stockpile. U.S. drillers added more seven rigs last week bringing the total count up to 763 (the highest since April 2015) according to Baker Hughes data. West Texas Intermediate WTI (August 2017 Delivery) fell during the week by 3.93% [or $1.81] per barrel to $44.23 per barrel. Brent crude prices (September 2017 Delivery) ended the week lower by 2.53%, or $1.21 per barrel, closing at $46.71 on Friday, the 07th of July WEEKLY CHANGES AGAINST THE USD MAJOR MARKETS 36% 24% 12% 0% (2.35%) (3.93%) (2.53%) (0.22%) (1.04%) 1.36% 0.37% 3.51% 22.80% The claimant unemployment rate is the percentage change of people claiming for unemployment related benefits over the total number of full-time and part-time jobs available in the UK (12%) GOLD WTI BRENT EUR GBP JPY CNY US 10Y Yield GE 10Y Yield

2 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 10 JULY 2017 PAGE 2» The stronger than expected Jobs report in the United States sapped demand for haven bonds. Investors in the bond market started to realize that the era of easy money is going to come to an end specifically after minutes of the FOMC's June meeting showed that some officials at the FED wanted to start reducing its Treasury assets by the end of August. The yield on the benchmark 10 year Treasury touched it highest level since May, increasing by 8.1 basis points (bps) or 3.51% over the week, closing its weekly trading session at 2.39% on the 07th of July ECONOMIC DATA & EVENTS FROM THE LAST WEEK. U.S.A & CANADA Initial jobless claims in the United States rose to 248K in the week ending July 01 following 244K registered in the prior week. Unemployment rate rose slightly to 4.4% in June from 4.3% in May. Employers added 222K jobs in June compared to 138K in May. MBA mortgage applications increased 1.4% in the week ending June 30 following 6.2% decline in the preceding week. Durable goods orders came in at -0.8% in May final estimate compared to -1.1% previously estimated. Factory orders declined 0.8% in May following the revised up decline to -0.3% in April. The trade balance posted a deficit of $46.5 billion in May following $47.6 billion deficit registered in April. Construction spending kept stable in May following the revised down decline to -0.7% in April. Manufacturing PMI remained unchanged at 52 in June (final estimate), the same as previously estimated (revised down). Composite PMI was confirmed at 53 in June final estimate, the same as previously estimated. ISM manufacturing rose above expectations to 57.8 in June from 54.9 in May. ISM nonmanufacturing composite rose to 57.4 in June from 56.9 in May. In Canada, unemployment rate unexpectedly fell to 6.5% in June from 6.6% in May. Net change in employment came in at 45.3K in June compared to 54.5K in May. Building permits rose 8.9% M/M in May, which is way above expectations, and following the revised up reading to 0.5% in April. Manufacturing PMI fell to 54.7 in June from 55.1 in May. UK & JAPAN In the UK, industrial production unexpectedly fell 0.1% M/M in May following 0.2% M/M increase in April. Manufacturing production unexpectedly fell 0.2% M/M in May following 0.2% M/M increase in April. House price index fell 0.1% M/M in June following the revised down increase to 0.3% M/M in May. Manufacturing PMI unexpectedly fell to 54.3 in June following the revised down reading to 56.3 in May. Composite PMI declined to 53.8 in June from 54.3 in May (revised down). In Japan, monetary base grew 17% Y/Y in June (less than expected) compared to 19.4% Y/ Y growth rate registered in May. Manufacturing PMI was revised up to 52.4 in June final estimate compared to 52 previously estimated. Composite PMI fell to 52.9 in June from 53.4 in May. EUROZONE Unemployment rate in the Eurozone kept stable at 9.3% in May, the same as in April. PMI manufacturing was revised up to 57.4 in June final estimate from 57.3 previously estimated.

3 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 10 JULY 2017 PAGE 3 PMI composite was also revised up to 56.3 in June final estimate from 55.7 in the previous estimate. In Germany, Industrial production increased 1.2% M/M in May following the revised down increase to 0.7% M/M in April. Factory orders rose 1% M/M in May (less than expected) following the revised up decline to 2.2% M/M in April. PMI manufacturing was revised up to 59.6 in June final estimate from 59.3 previously estimated. PMI composite was also revised up to 56.4 in June final estimate from 56.1 in the previous estimate. In France, Industrial production increased 1.9% M/M in May following the revised up decline to -0.6% M/M in April. PMI manufacturing was revised down to 54.8 in June final estimate from 55 previously estimated. PMI composite was revised up to 56.6 in June final estimate from 55.3 in the previous estimate. Italian retail sales unexpectedly fell 0.1% M/M in May following the revised up decline to - 0.4% M/M in April. Manufacturing PMI rose to 55.2 in June from 55.1 in May. Composite PMI fell below expectations to 54.5 in June from 55.2 in May. Net unemployment in Spain came in at -98.3K in June following K registered in May. Manufacturing PMI unexpectedly fell to 54.7 in June from 55.4 in May. Composite PMI unexpectedly rose to 57.7 in June from 57.2 in May. EMERGING MARKET, Inflation in Brazil came in at -0.23% M/M in June compared to -0.19% M/M expected and following 0.31% M/M registered in the previous month. On yearly basis, inflation decelerated to 3% in June compared to 3.6% in May. Industrial production increased 0.8% M/M in May following the revised up increase to 1.1% M/M in April. Commodity price index fell 4.63% Y/Y in June following 4.64% Y/Y decline in May. The Brazilian trade balance posted a surplus of $7195 million in June compared to $7661 million surplus registered in May. Manufacturing PMI fell to 50.5 in June from 52 in May. Services PMI fell below 50 to 48.5 in June from 50.4 in May. In India, manufacturing PMI fell to 50.9 in June from 51.6 in May. Composite PMI rose to 52.7 in June from 52.5 in May. Manufacturing PMI in China rose above expectations in June to 50.4 from 49.6 registered in May. Composite PMI fell to 51.1 in June from 51.5 in May. Russian gold and FOREX reserve climbed to $412.2 billion in the week ending June 30 compared to $408.8 billion in the previous week. CPI inflation accelerated more than expected to 4.4% Y/Y in June from 4.1% Y/Y in May. Manufacturing PMI fell to 50.3 in June from 52.4 in May. Composite PMI decreased to 54.8 in June from 56 in May. GCC & MENA,

4 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 10 JULY 2017 PAGE 4 GCC & MENA, Saudi Arabia measure of money supply M2 grew 3.4% Y/Y in May compared to 4.2% Y/ Y growth rate in April. SAMA net foreign assets decreased to SAR billion in May from SAR billion in April. PMI fell slightly to 54.3 in June from 55.3 in May. PMI in the United Arab Emirates rose to 55.8 in June from 54.3 in May. CPI inflation in Turkey decelerated more than expected to 10.9% Y/Y in June from 11.72% Y/Y in May. Manufacturing PMI rose to 54.7 in June from 53.5 in May.

5 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 10 JULY 2017 PAGE 5 WEEKLY CLOSING FX CHART POUND STERLING WEEKLY CLOSING FX CHART EURO & JAPANESE YEN 1.80 GBP/USD Jul 07 CLOSE $ EUR / USD Jul 07 CLOSE $ USD / JPY Jul 07 CLOSE WEEKLY CLOSING CRUDE OIL USD PER BARREL WEEKLY CLOSING SPOT GOLD USD PER OUNCE NYMEX WTI Crude Weekly closing Jul 07 CLOSE $44.23 ICE Brent Crude Weekly closing Jul 07 CLOSE $ Gold Spot price, quoted as US Dollars per Troy Ounce Jul 07 CLOSE $ WEEKLY CLOSING GOVERNMENT BOND YIELDS USA & GERMANY WEEKLY CLOSING GOVERNMENT BOND YIELDS ITALY & SPAIN U.S 10 - year government Bond Jul 07 CLOSE 2.39% Italy 10 - year government Bond Jul 07 CLOSE 2.34% 3.7 Germany 10 - year government Bond Jul 07 CLOSE 0.57% 6.5 Spain 10 - year government Bond Jul 07 CLOSE 1.72%

6 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 10 JULY 2017 PAGE 6 PROFIT RATE BENCHMARK ENERGY / COMMODITIES USD TENOR LIBOR SIBOR SAR - DEP LAST PRICE WTD 1 - Month GOLD - SPOT 1, (2.35%) 3 - Month SILVER - SPOT (6.12%) 6 - Month ALUMINUM - LME 3 MTH 1, % 9 - Month COPPER - LME 3 MTH 5, (1.84%) 12 - Month WTI - NYMEX (3.93%) BRENT - ICE (2.53%) Foreign Exchange STOCKS INDEXES WEEKLY CLOSING Spot SAR Equ WTD Index Closed WTD GBP / USD (1.04%) S&P 500 2, % EUR / USD (0.22%) Dow Jones 21, % AUD / USD (1.14%) NASDAQ 6, % USD / CHF % FTSE 100 7, % USD / CAD (0.68%) DAX Index 12, % USD / JPY % CAC Index 5, % USD / CNY (0.28%) Nikkei ,929 (0.52%) USD / SAR (0.01%) TASI Index 7,204 (2.99%) WEEK AHEAD ECONOMIC CALENDAR DATE COUNTRY ECONOMIC RELEASE /EVENTS PERIOD EXPECTED * PRIOR IMPORTANCE Mon 10 / 07 04:30 CH CPI YoY Jun 1.60% 1.50% Mon 10 / 07 04:30 CH PPI YoY Jun 5.50% 5.50% Tue 11 / 07 17:00 US Wholesale Inventories MoM May F 0.30% 0.30% Wed 12 / 07 11:30 UK Claimant Count Rate Jun % Wed 12 / 07 11:30 UK Jobless Claims Change Jun k Wed 12 / 07 11:30 UK ILO Unemployment Rate 3Mths May 4.60% 4.60% Wed 12 / 07 14:00 US MBA Mortgage Applications Jul % Thu 13 / 07 09:00 GE CPI YoY Jun F 1.60% 1.60% Thu 13 / 07 09:45 FR CPI YoY Jun F 0.70% 0.70% Thu 13 / 07 15:30 US PPI Final Demand MoM Jun 0.00% 0.00% Thu 13 / 07 15:30 US Initial Jobless Claims Jul k 248k Fri 14 / 07 15:30 US CPI MoM Jun 0.10% -0.10% Fri 14 / 07 15:30 US Retail Sales Advance MoM Jun 0.10% -0.30% Fri 14 / 07 16:15 US Industrial Production MoM Jun 0.30% 0.00% Fri 14 / 07 17:00 US U. of Mich. Sentiment Jul P Source: Bloomberg for forecasting

7 TREASURY RESEARCH WEEKLY ECONOMIC COMMENTARY 03 JULY 2017 PAGE 7 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 10 July All market data included in this report are dated as at close 8 July 2017, 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.