[ ] WEEKLY CHANGES AGAINST THE USD

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1 February 12, 2018 [ ] MACRO & MARKETS COMMENTARY» In the early hours of last Friday, U.S Congress approved a major budget deal that opens the door for more increase in defense and non-defense spending and raises debt limit through March Stock markets, however, suffered one of its worst weeks since the financial crisis. the S&P 500 lost 5.16% in five days to Friday [the worst week since the 08th of January 2016]» U.S dollar closed its weekly trading session higher for the second consecutive week. U.S. Dollar spot index (DXY - the index that tracks the performance of the US Dollar against major world currencies) surged by 1.40% or points [the most since December 2016]. the index closed its weekly trading session at point on Friday the 09th of February compared to at last week s close. In the Eurozone, the EUR/USD closed its weekly trading session lower for the first time since December 2017 (on a weekly basis), falling by 1.69% (or 211 pips) to $1.252 per euro on Friday, the 09th of February 2018.» Crude oil prices dropped last week as the sell-off in equity and debt market undermined the outlook for energy demand. However, the raise in U.S productions played a critical roll in deepening the slump in crude prices. U.S Energy Information Administration (EIA) reported that commercial crude stockpiles increased by million barrels [compared to expectations of 3.25 million barrel] on the week that ended on the 02nd of February, putting total inventories at million barrels. WEEKLY CHANGES AGAINST THE USD MAJOR MARKETS 4% 0% (4%) (8%) (12%) (1.26%) (9.55%) (8.44%) (1.69%) (2.06%) (1.24%) 0.04% 0.35% (3.14%) GOLD WTI BRENT EUR GBP JPY CNY US 10Y Yield GE 10Y Yield Markit Manufacturing PMI : An indicator of the economic health of the manufacturing sector conducted by Markit. Variables such as output, new orders, employment, and prices across key sectors are closely watched and tracked

2 » West Texas intermediate future contracts (March 2018 delivery) fell by 9.55% [or $6.25] per barrel to $59.20 per barrel. The international oil benchmark (Brent crude future contracts for April 2018 delivery) fell by 8.44% [or $5.79] per barrel, closing its weekly trading session at $62.79 on Friday, the 09th of February 2018.» Us government bond prices swung between gains and losses during the week, ending the week almost the same as the close of the week before. Yield on the 10 year treasury moved on the [2.807% %] range. Yield on the benchmark 10 year treasury ended the week higher by 1 basis points (bps) or 0.35% over the week, closing its weekly trading session at 2.852% on the 09th of February ECONOMIC DATA & EVENTS FROM THE LAST WEEK. U.S.A & CANADA Initial jobless claims in the United States fell to 221K in the week ending February 03 from 230K in the preceding week. MBA mortgage applications rose 0.7% in the week ending February 02 following 2.6% decline in the prior week. The trade balance posted a deficit of 53.1 billion in December following the revised down deficit to $50.4 billion in November. ISM non-manufacturing composite rose more than expected to 59.9 in January from 56 in December (revised up reading). Unemployment rate in Canada rose to 5.9% in January from 5.8% registered in December (revised up reading). Employment fell by 88K jobs in January compared to the revised down increase to 64.8K in December. UK & JAPAN On February 08, Bank of England kept its rate unchanged at 0.5% as expected. The bank has also kept its asset purchase target unchanged at 435 billion. Industrial production fell 1.3% M/M in December following the revised down decline to 0.3% M/M in November. Manufacturing production rose 0.3% M/M in December as expected following the revised down increase to 0.2% M/M in November. In January, services PMI fell below expectations to 53 from 54.2 in December. The Japanese current account posted a surplus of billion in December following a surplus of billion in November. Tertiary industry index fell 0.2% M/M in December following 1.1% M/M increase in November. Services PMI climbed to 51.9 in January from 51.1 in December. EUROZONE Composite PMI in the Euro Area was revised up to 58.8 in January final estimate from 58.6 previously estimated. Industrial production in Germany fell 0.6% M/M (seasonally adjusted) in December following the revised down increase to 3.1% M/M in November. Factory orders increased 3.8% M/M in December compared to the revised down decline to 0.1% M/M in November. In France, industrial production climbed 0.5% M/M in December compared to the revised down decline to 0.3% M/M in November. Services PMI was revised down slightly to 59.2 in January final estimate from 59.3 previously estimated.

3 Industrial production in Italy climbed 1.6% M/M in December (more than expected) compared to the revised up reading 0.2% M/M in November. EMERGING MARKET, On February 07, the Brazilian Central Bank cut its Selic rate from 7% to 6.75%. Inflation in Brazil decelerated more than expected to 0.29% M/M in January from 0.44% M/M in December. Retail sales increased 3.3% Y/Y in December following 6% Y/Y increase in November (revised up reading). On February 07, Reserve Bank of India kept its repurchase rate unchanged at 6% as expected. CPI inflation in China decelerated to 1.5% Y/Y in January as expected compared to 1.8% Y/Y in December. PPI increased 4.3% Y/Y in January as expected compared to 4.9% Y/Y increase in the previous month. The Chinese trade balance posted a surplus of $20.34 billion in January, which is less than expected at $54.65 billion, and following $54.69 billion surplus in December. Exports increased 11.1% Y/Y in January following 10.9% Y/Y increase in December. Russian gold and FOREX reserve declined to $449.8 billion in the week ending February 02 compared to $452.8 billion in the previous week. On February 09, the Russian Central Bank cut its key rate from 7.75% to 7.50% as expected. CPI inflation decelerated more than expected from 2.5% Y/Y in December to 2.2% Y/Y in January. GCC & MENA, CPI inflation in Turkey decelerated more than expected to 10.35% Y/Y in January from 11.92% Y/Y in December. Industrial production increased 0.9% M/M in December following the revised down increase to 0.2% M/M in November.

4 WEEKLY CLOSING FX CHART POUND STERLING WEEKLY CLOSING FX CHART EURO & JAPANESE YEN 1.80 GBP/USD Feb 09 CLOSE $ EUR / USD Feb 09 CLOSE $ USD / JPY Feb 09 CLOSE WEEKLY CLOSING CRUDE OIL USD PER BARREL WEEKLY CLOSING SPOT GOLD USD PER OUNCE 150 NYMEX WTI CRUDE WEEKLY CLOSING FEB 09 CLOSE $59.20 ICE BRENT CRUDE WEEKLY CLOSING FEB 09 CLOSE $ ,450 Gold Spot price, quoted as US Dollars per Troy Ounce Feb 09 CLOSE $ , , ,000 WEEKLY CLOSING GOVERNMENT BOND YIELDS USA & GERMANY WEEKLY CLOSING GOVERNMENT BOND YIELDS ITALY & SPAIN U.S 10 - year government Bond Feb 09 CLOSE 2.85% Italy 10 - year government Bond Feb 09 CLOSE 2.04% 3.0 Germany 10 - year government Bond Feb 09 CLOSE 0.74% 4.5 Spain 10 - year government Bond Feb 09 CLOSE 1.47%

5 PROFIT RATE BENCHMARK ENERGY / COMMODITIES USD TENOR LIBOR SIBOR SAR - DEP LAST PRICE WTD 1 - MONTH GOLD - SPOT 1, (1.26%) 3 - MONTH SILVER - SPOT (1.36%) 6 - MONTH ALUMINUM - LME 3 MTH 2, (3.94%) 12 - MONTH COPPER - LME 3 MTH 6, (4.12%) WTI - NYMEX (9.55%) BRENT - ICE (8.44%) FOREIGN EXCHANGE STOCKS INDEXES WEEKLY CLOSING SPOT SAR EQU WTD INDEX LAST PRICE WTD GBP / USD (2.06%) S&P 500 2,620 (5.16%) EUR / USD (1.69%) DOW JONES 24,191 (5.21%) AUD / USD (1.49%) NASDAQ 6,874 (5.06%) USD / CHF % FTSE 100 7,092 (4.72%) USD / CAD % DAX INDEX 12,107 (5.30%) USD / JPY (1.24%) CAC INDEX 5,079 (5.33%) USD / CNY (0.28%) NIKKEI ,383 (8.13%) USD / SAR % TASI INDEX 7,403 (3.30%) WEEK AHEAD ECONOMIC CALENDAR DATE COUNTRY ECONOMIC RELEASE /EVENTS PERIOD EXPECTED * PRIOR IMPORTANCE Tue 13 / 02 12:30 UK CPI Core YoY Jan 2.60% 2.50% Tue 13 / 02 12:30 UK CPI YoY Jan 2.90% 3.00% Wed 14 / 02 02:50 JN GDP Annualized SA QoQ 4Q P 1.00% 2.50% Wed 14 / 02 02:50 JN GDP SA QoQ 4Q P 0.20% 0.60% Wed 14 / 02 10:00 GE CPI YoY Jan F 1.60% 1.60% Wed 14 / 02 10:00 TU Current Account Balance Dec -7.50b -4.20b Wed 14 / 02 13:00 EC GDP SA QoQ 4Q P 0.60% 0.60% Wed 14 / 02 13:00 EC GDP SA YoY 4Q P 2.70% 2.70% Thu 15 / 02 07:30 JN Industrial Production MoM Dec F % Thu 15 / 02 16:30 US Initial Jobless Claims 10-Feb 228k 221k Thu 15 / 02 17:15 US Industrial Production MoM Jan 0.20% 0.90% Fri 16 / 02 16:30 US Housing Starts Jan 1231k 1192k Fri 16 / 02 18:00 US U. of Mich. Sentiment Feb 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 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 12 February All market data included in this report are dated as at close 10 February 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.