Global central banks shift to a more hawkish stance

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1 IM Investment Monthly July 2017 This document contains the views of HSBC Global Asset Management and is distributed by HSBC Investment Funds (Canada) Inc., HSBC Private Wealth Services (Canada) Inc., and the HSBC InvestDirect division within HSBC Securities (Canada) Inc., each of which are subsidiaries of HSBC Bank Canada. This commentary provides a high level overview of the recent economic environment, and is for information purposes only. It is a marketing communication and does not constitute investment advice or a recommendation to any reader of this content to buy or sell investments nor should it be regarded as investment research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination. Global central banks shift to a more hawkish stance Key takeaways We remain neutral on global equities and corporate bonds, and underweight on developed market government bonds. We also continue to be overweight on local currency emerging market government bonds and emerging market equities Global equities were little d in June, supported by data showing robust economic activity that helped offset concerns over a tightening of global monetary policy The Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 bps at its June meeting, also signalling it would begin unwinding its balancing sheet later this year The European Central Bank (ECB) reflected a more positive economic outlook at its June meeting, with the reference to taking rates "lower if needed" dropped from its statement Despite signs of a slowing UK economy, the June Bank of England (BoE) Monetary Policy Committee (MPC) meeting saw three MPC members vote for a rate increase In China, authorities continue to tighten financial and property policies. However, activity growth should remain resilient in the near term Global central banks gradually move to a tighter policy stance Although the acceleration in global economic activity since the summer of 2016 has slowed slightly, overall conditions remain on a solid footing. This positive cyclical backdrop has seen the US Federal Reserve (Fed) continue along its tightening cycle, and the ECB and BoE both strike a more hawkish tone at their June meetings. Nevertheless, we also recognise that inflation trends remain subdued. This should translate to a very gradual normalisation of policy and also support consumer spending. In this context, and given relative valuations, we continue to favour global equities over developed market government bonds, with a preference for Japan, eurozone and emerging market equities over those from the US. For US Treasuries, we now measure a negative implied term premium (i.e., we are being penalised for bearing duration risk). Given upside risks to US inflation in the context of a tightening labour market, this reinforces our underweight positioning in this asset class, along with other developed market government bonds. Elsewhere, the current market-implied odds for taking credit risk are still not particularly attractive, and we maintain a neutral stance amid stable fundamentals. Finally, we remain overweight in emerging market local currency debt and equities, although the investment case for the latter is driven by economic and price momentum and cheap currencies rather than anomalous valuations. Equities Government bonds Corporate bonds and other Asset class View Global View movement Asset class View Developed Market (DM) View movement Asset class View Global investment grade (IG) View movement US US USD IG UK UK Euro and sterling IG Eurozone Eurozone Global high yield Japan Japan Gold Emerging markets (EM) EM (local currency) Other commodities Asia ex Japan Real estate CEE & Latam

2 Long-term asset class positioning (>12 months) Basis of views and definitions of Long-term asset class positioning tables Views are based on regional HSBC Global Asset Management Asset Allocation meetings held throughout June 2017, HSBC Global Asset Management s long-term expected return forecasts that were generated as at 31 May 2017, our portfolio optimisation process and actual portfolio positions. Icons: View on this asset class has been upgraded No View on this asset class has been downgraded, overweight and neutral classifications are the high-level asset allocation tilts applied in diversified, typically multi-asset portfolios, which reflect a combination of our long-term valuation signals, our shorter-term cyclical views and actual positioning in portfolios. The views are expressed with reference to global portfolios. However, individual portfolio positions may vary according to mandate, benchmark, risk profile and the availability and riskiness of individual asset classes in different regions. implies that, within the context of a well-diversified typically multi-asset portfolio, and relative to relevant internal or external benchmarks, HSBC Global Asset Management has (or would have) a positive tilt towards the asset class. implies that, within the context of a well-diversified typically multi-asset portfolio, and relative to relevant internal or external benchmarks, HSBC Global Asset Management has (or would have) a negative tilt towards the asset class. implies that, within the context of a well-diversified typically multi-asset portfolio, and relative to relevant internal or external benchmarks, HSBC Global Asset Management has (or would have) neither a particularly negative or positive tilt towards the asset class. For global investment-grade corporate bonds, the underweight, overweight and neutral categories for the asset class at the aggregate level are also based on high-level asset allocation considerations applied in diversified, typically multi-asset portfolios. However, US-dollar investment-grade corporate bonds and euro and sterling investment-grade corporate bonds are determined relative to the global investmentgrade corporate bond universe. The asset class positioning table shows the view of the asset class in general and may not be reflective of the asset class positioning and strategy of HSBC World Selection Portfolios and HSBC World Selection Diversified Funds Equities Asset class View Movement Rationale Global Positive factors: Global economic growth momentum remains solid, driving global equity markets to deliver positive returns over the long term. Overall, support from still loose accommodative monetary policy and an increased willingness for looser fiscal policy will, in the medium and longer term, likely outweigh any headwinds from more modest Chinese growth, tighter US and eurozone monetary policy, and political uncertainty in many regions. Risks to consider: Fairly narrow implied equity premia (excess return over bonds) limits the ability of the market to absorb bad news. Episodic volatility may be triggered by concerns surrounding Chinese growth, US economic policy and/or a potentially more rapid than expected Fed tightening cycle, coupled with political risks. A notable and persistent deterioration of the global economic outlook could also dampen our view. US Positive factors: US profit data has shown improvement amid a broadly robust economic backdrop. Corporate tax reform, looser regulation and fiscal stimulus under the Trump administration present an upside risk to earnings. Overall, our measure of the implied risk premium (excess returns over government bonds) remains consistent with a neutral position. Risks to consider: Relatively high current valuations lead to an implied risk premium that is lower than in many other developed markets. The policy outlook under the Trump administration remains highly uncertain. More recently we have seen slight softness in US whole-economy profits. Canada Positive factors: Given the nominal returns of the Canadian equity market year-to-date despite expectations for reasonable earnings growth, the valuation outlook has recently improved. Moderate but sustainable macro indicators (driven by improving global economic growth and easy monetary policy) should enable commodity price stability and earnings growth to resume. Domestic equity valuations are reasonable and show potential for positive absolute and favourable relative- return opportunities over the medium-term. Thus, a relatively neutral position in Canadian equities appears to be appropriate at this time. Risks to consider: Disappointing global growth, less accommodative monetary policy, geopolitical concerns and a resumption in commodity price weakness would put pressure on domestic employment trends and corporate profits, resulting in compressed earnings estimates and higher risk premiums. July 2017 Investment Monthly 2

3 Asset class View Movement Rationale UK Positive factors: Positive global economic momentum (and the potential for further sterling weakness) supports the UK earnings outlook given a large dependency on foreign earnings. Gains in commodity prices would also be a positive. Overall, current valuations are consistent with a neutral positioning, in our view. Risks to consider: The prospective reward to bearing equity risk in the UK is relatively low compared to other markets. The UK economy could slow amid sterling-induced inflationary pressures and Brexit-related uncertainty. Eurozone Rationale for overweight views: We favour eurozone equities due to their higher implied risk premia and scope for better earnings news given the region s earlier point in the activity cycle. Furthermore, the monetary backdrop remains supportive, with ultra-low interest rates likely to persist until the end of the decade. Risks to consider: Valuations have become less attractive following the recent rally. According to recent polls, the upcoming Italian elections should see the eurosceptic five-star movement perform well. Also, the outcome of Brexit negotiations is highly uncertain. Brexit-related trade disruptions and/or slower UK GDP growth will likely hit eurozone exports. ECB monetary policy may also be less accommodative than expected. Japan Rationale for overweight views: Relative valuations and risk premia are attractive, in our view, while the Bank of Japan s (BoJ) extremely loose monetary policy and the government s recent fiscal stimulus package may boost earnings. Large corporate cash reserves provide Japanese firms with the scope to boost dividends or engage in stock repurchases. Earnings momentum is showing signs of picking up. Risks to consider: Domestic economic fundamentals are relatively sluggish, with an absence of momentum in wage growth, despite tight labour market conditions. Emerging markets Rationale for overweight views: We believe emerging market equities remain attractive for Western-based investors (US dollar, pound sterling or euro based) given our expectation of longer-term currency appreciation. However, we continue to be selective, focusing on countries with strong underlying macro fundamentals and positive price momentum. Risks to consider: Aggregate emerging market equity valuations no longer look anomalously cheap. There could be some near-term volatility as worries persist around the uncertain path for future Fed tightening, the potential for increased trade protectionism, economic transition in China, and the robustness of the global economy as a whole. Geopolitical uncertainty also poses risks. Asia ex Japan Rationale for overweight views: Improving earnings and profitability and more efficient use of cash levels on balance sheets support rising returns on equity amid an export recovery, better domestic growth, and supportive global and regional monetary policy. Structural reforms and shareholder-return policies are potential catalysts in some markets. Valuations look reasonable. Risks to consider: A sharp rise in US Treasury yields is a key risk. Fed balance sheet reduction and ECB tapering could raise uncertainty. US protectionist policies remain a major risk. Other risks include geopolitical events, commodity price volatility, a fragile or faltering global growth recovery and renewed concerns about China s growth and financial risks. Central and Eastern Europe and Latin America Positive factors: Brazil exited recession in Q1 and is embarking on an ambitious reform agenda, while Mexico s economy is resilient. Poland has low levels of US-dollar-denominated debt and, along with Russia and Hungary, offers attractive risk premia, in our view. Risks to consider: Geopolitical tensions are also high and unpredictable. High local cash rates and sovereign yields in many countries diminish the case for bearing equity risk. July 2017 Investment Monthly 3

4 Government bonds Asset class View Movement Rationale Developed Markets Rationale for underweight views: Prospective returns still look low relative to competing asset classes. In a bond-unfriendly environment (strong global activity, the prospect of fiscal easing), global bond yields could move higher still. Positive factors: Government bonds still provide diversification benefits and reduce volatility within multi-asset portfolios. Meanwhile, secular stagnation forces are powerful (ageing populations, low productivity and investment), and the global pool of safety assets is limited. Therefore, the normalisation of bond yields could take several years. US Rationale for underweight views: The US labour market is at (or close to) full employment so underlying inflationary pressures are likely to build, especially if fiscal stimulus materialises. In addition, prospective returns still look low relative to competing asset classes. Positive factors: Today s environment of price stability means that the term premia (compensation for bearing duration risk) may be capped at a lower level relative to history. Canada Rationale for underweight views: In June many key central banks including the Fed, BoE and even the ECB began to signal that global policy rates were likely to be moving higher in concert following years of aggressive, coordinated monetary stimulus. The messaging from the Bank of Canada took an abrupt about face, moving from an easing to a tightening bias in only a few weeks. This shift in tone from the global central banks sent yields sharply higher at the end of the second quarter. Fixed income investors continue to weigh the implications of a Trump presidency on the US fiscal and monetary policy outlook and what might be the impact on economic growth, inflation and yields. Overall, the increasing evidence of a more universal global expansion continues to provide a positive backdrop for equity markets and challenging outlook for fixed income assets going forward. The Government of Canada 10-year yield, considered to be a proxy for the overall government bond market, initially jumped from ~1.15% prior to the US election to a mid-december 2016 high of ~1.85%. It has since traded thus far in 2017 within a 45 bps range (~ %) and is currently testing the high-end of its recent trading band. Thus, current valuations in government bonds are more attractive than they were early this year. That said, our medium-term outlook continues to expect yields levels to move higher. Therefore, we have maintained our underweight view on Canadian government bonds and have maintained our preference for corporate bonds. Positive factors: If Canadian growth disappoints, more accommodative monetary policy may prove supportive for this asset class. Periods of risk aversion and flight to liquidity may also prove to be supportive. In addition, government bonds continue to offer a diversification element, important in a volatile environment. UK Rationale for underweight views: Prospective UK gilt returns remain very low. Although the UK economy could slow, any support in this respect may be offset by inflationary pressures. Positive factors: Amid downside risks to growth, UK monetary policy is likely to stay accommodative for a longer period. Eurozone Rationale for underweight views: Similarly, core European bonds are overvalued, in our view. A key risk is the likelihood of further tapering of the ECB s asset purchase programme after December Positive factors: Core inflationary pressures in the region remain subdued, which should keep accommodative monetary policy in place for an extended period of time. Japan Rationale for underweight views: Japanese government bonds are overvalued, in our view, while the BoJ s commitment to peg 10-year yields close to zero could be re-evaluated. The BoJ has also recently reduced the amount of its Japanese government bond purchases. Positive factors: The Yield Curve Control framework should limit volatility and reduce the risk of higher yields in the near term. Meanwhile, BoJ Governor Haruhiko Kuroda has indicated that cutting policy rates could play a central role in future policy decisions. Emerging markets Rationale for overweight views: The yield available on emerging market sovereign bonds makes them attractive relative to developed market government debt, in our view. Furthermore, our estimate of the sustainable return on emerging market currencies reinforces our choice to hold this position unhedged. Risks to consider: Spreads in the emerging market debt universe are at risk of widening as US policy tightens. July 2017 Investment Monthly 4

5 Corporate bonds Asset class View Movement Rationale Global investment grade Positive factors: The prevailing macro environment remains supportive for credits. Implied recession probabilities are near zero the default outlook appears benign. Risks to consider: Valuations do not appear anomalously cheap, with low implied credit premia meaning that the margin of safety is now very thin against any negative shocks (such as tighter than expected US monetary policy). US dollar investment grade Positive factors: US investment grade debt looks more attractive relative to European credit. Carefully selected US credit may outperform. Risks to consider: Lower relative valuations for US-dollar-denominated credit is offset in the nearer term by the risk of a more aggressive pace of Fed tightening. The US credit cycle is more mature than that in Europe, which remains nascent. Euro and sterling investment grade Positive factors: The ECB s corporate bond-buying programme remains supportive. Meanwhile, in the eurozone, the latest survey data suggests a gradual improvement in credit conditions, and default rates remain low. Valuations are still around neutral levels. Risks to consider: European credits could be hit as the ECB tapers its asset purchase programme. UK credits are vulnerable given the recent completion of the BoE corporate bond buying programme amid downside risks to the UK economic outlook. Global highyield Positive factors: Corporate fundamentals are improving following a pickup in the global activity cycle. Defaults remain comparatively low and we think they are likely to be contained to commodity-related sectors. Risks to consider: Further credit spread compression leaves a thin margin of safety. We are neutral with a negative bias. Other Asset class View Movement Rationale Gold Positive factors: Fed hikes are likely to remain historically gradual, limiting the opportunity cost of holding the non-yield-generating asset. Rising inflationary pressures could boost hedging demand, while high political risks/uncertainty could also be supportive. Risks to consider: A stronger than expected Fed hiking cycle may push the US dollar higher. Other commodities Positive factors: With oil demand growth remaining robust, there is scope for the market to continue to rebalance, particularly following OPEC s November output cut deal (extended to March 2018). Risks to consider: Oil markets could remain oversupplied, especially if US production remains resilient. Industrial metals remain exposed to the pace of China s economic rebalancing and global growth. Real Estate Positive factors: Based on our dividend growth assumptions and current yields, which offer a premium of around 1.4 percentage points above the dividend yield from wider equities, we believe real estate equities are priced to deliver reasonably attractive long-run returns compared to developed market government bonds. In the long run, rents are positively related to wider economic growth and offer a partial inflation hedge. Risks to consider: The US has underperformed other listed property markets in recent months. Concerns over the health of some retailers have dragged down retail-oriented Real Estate Investment Trusts. In this environment, we believe higher-quality malls and shopping centres are likely to outperform stocks with weaker portfolios. The UK's decision to leave the European Union has reduced rental growth prospects, especially in central London, and increased uncertainty around future occupier demand. July 2017 Investment Monthly 5

6 Global central banks shift to a more hawkish stance Markets: Global equities little d in June, oil prices fell on oversupply concerns and 10-year Treasuries dipped Global equities were little d in June, supported by data showing robust economic activity that helped offset concerns over a tightening of global monetary policy. The MSCI AC World Index closed flat over the month. In the US, the S&P 500 Index rose 0.5%, with financial stocks outperforming on a steeper yield curve (supporting banks profitability outlook) and the US Federal Reserve s decision to allow major US banks to engage in share buybacks. European stocks retreated, however, as a surge in the euro against the US dollar weighed on exporter shares in the region. In emerging markets, the MSCI Emerging Markets Index rose (+1.2%), although the MSCI Russia Index fell for the third consecutive month amid further falls in oil prices, as investors remained concerned that the market is oversupplied due to rising output from Libya and the US. In the government bond space, 10-year US Treasuries and core European bonds fell (yields rose), mainly on concerns about the trajectory of global monetary policy (all data above as of close of 30 June in local currency, price return, month-to-date terms). US: The Fed is committed to its rate-hiking cycle despite soft inflation prints US underlying economic activity remains positive. Our Nowcast measure of underlying activity is tracking growth of 3.2% for June, slightly higher than May (+2.9%). Meanwhile, core PCE inflation declined for the fifth consecutive month to 1.4% in May, further away from the Fed s 2% target. This continued anaemic inflation backdrop is puzzling to many in the context of labour market tightening. Nevertheless, the Fed appears committed to its rate hiking cycle, raising the fed funds target rate by 25 bps at its June meeting and maintaining its projection for one more hike by year-end. This meeting also saw the Fed signal it would begin unwinding its balancing sheet later this year. Overall, we think that the current environment of strong growth alongside higher interest rates and balance sheet normalisation reinforces the case for being underweight in US Treasuries, especially given that we now measure a negative implied term premium (i.e., compensation for bearing duration risk). Eurozone: Strength of activity maintains speculation of ECB taper in 2018 In the eurozone, recent data remains very robust, with the final release of Q1 GDP revised up to 0.6% qoq. Positively, there seems to be a broadening of growth drivers to investment and exports, and more high-frequency indicators, such as the PMIs, indicate this strength continued into Q2. The ECB reflected the more positive outlook at its June meeting, with the reference to taking rates lower if needed dropped from its statement. Although inflationary pressures remain elusive (the preliminary estimate for June headline inflation fell to 1.3% yoy), the strength of recent economic data (and importantly diminished deflation risks) combined with technical buying constraints remain compelling arguments for a taper of the ECB s quantitative easing programme next year. Macron s election victory in France also removes a key event risk, and the unlocking of EUR8.5 billion in new loans for Greece during the month ensures the country will be able to make bond payments due in July (amid signs that the country will regain market access in the near term). An important breakthrough for Greece also came in the form of the eurozone s agreement to introduce a growth-dependent debt-profiling mechanism. This means more debt relief will be granted if Greek growth deteriorates. Overall, we retain our overweight view on eurozone equities given relatively attractive risk premia on offer. UK: Election outcome raises Brexit-related uncertainty A year on from the UK s referendum on European Union membership, the UK economy is looking increasingly vulnerable as inflationary pressures bite into disposable incomes. Despite this, the June BoE meeting saw the MPC take a hawkish turn, with three MPC members voting for a rate increase, predominantly driven by concerns over accelerating inflation. Although the probability of a near-term rate hike has risen, we expect the doves to prevail given risks to the UK economic outlook are firmly tilted to the downside. Furthermore, June s UK general election result has also complicated the outlook for Brexit, with uncertainty over the stability of the Conservative-DUP alliance struck in the aftermath of the result. The range of outcomes remains very wide. For the time being, we retain our neutral stance on UK equities. Asia: Chinese growth should remain resilient despite policy tightening; Japan quantitative easing taper remains a long way off In China, the impact of financial deleveraging is evident in May s M2 (money supply) growth, which fell to a record low of 9.6% yoy. Despite recent signs of an incrementally slower pace of liquidity and regulatory tightening, we think the authorities are not likely to reverse their tightening of financial and property policies. However, activity growth should remain resilient in the near term. Elsewhere, the BoJ kept its monetary policy und in June, although it has recently reduced the amount of Japanese government bond purchases, fuelling speculation about a possible quantitiative easing tapering. However, BoJ Governor Haruhiko Kuroda stated following the meeting that with the 2% inflation target still some way off, it is not appropriate to talk about how an exit is going to work. Overall, a continuation of ultra-loose BoJ policy, along with attractive risk premia, supports our overweight view on the country s equities. Emerging markets: Economic performance broadly remains on an improving trend, although political risk is a key constraint Following two years of contraction, Brazil s economy expanded in Q1 GDP (by +1.1% qoq annualised). Positively, an improving inflation profile may hasten the path to recovery, as it gives the central bank extra room for monetary easing. Against this encouraging economic backdrop, investors shrugged off news during the month of President Michel Temer s indictment for corruption. Similarly, Russia s economy is improving amid closeto-target inflation and central bank accommodation. This is particularly positive given the recent volatility in oil prices. Elsewhere, Mexico s central bank raised interest rates by another 25 bps at its June meeting, but signalled that this could be the end of the tightening cycle. An aggressive Fed tightening path and US policy shifts, in particular NAFTA renegotiations, remain a key risk. Less positively, South Africa unexpectedly slipped into recession in Q1 for the first time since 2009, and is still vulnerable to political upheaval. Finally, in India, even though it stood pat on interest rates at its June meeting, the country s central bank turned dovish in its policy statement, after slashing its inflation forecasts and reducing its growth projections for the coming quarters. Importantly, the Goods and Services Tax, which will be rolled out on 1 July, could pose some risks to near-term growth due to inventory drawdowns and potential disruption to small and medium enterprises, but the impact is likely to be transitory. July 2017 Investment Monthly 6

7 Market data Equity indices MTD 3M YTD High Low Close World MSCI AC World Index (USD) North America US Dow Jones Industrial Average 21, ,535 17, US S&P 500 Index 2, ,454 2, US NASDAQ Composite Index 6, ,342 4, Canada S&P/TSX Composite Index 15, ,943 13, Europe MSCI AC Europe (USD) Euro STOXX 50 Index 3, ,667 2, UK FTSE 100 Index 7, ,599 6, Germany DAX Index* 12, ,952 9, France CAC-40 Index 5, ,442 4, Spain IBEX 35 Index 10, ,184 7, Asia Pacific MSCI AC Asia Pacific ex Japan (USD) Japan Nikkei-225 Stock Average 20, ,318 15, Australian Stock Ex 200 5, ,957 5, Hong Kong Hang Seng Index 25, ,090 20, Shanghai Stock Ex Composite Index 3, ,301 2, Hang Seng China Enterprises Index 10, ,727 8, Taiwan TAIEX Index 10, ,546 8, Korea KOSPI Index 2, ,403 1, India SENSEX 30 Index 30, ,523 25, Indonesia Jakarta Stock Price Index 5, ,910 4, Malaysia Kuala Lumpur Composite Index 1, ,797 1, Philippines Stock Ex PSE Index 7, ,118 6, Singapore FTSE Straits Times Index 3, ,275 2, Thailand SET Index 1, ,601 1, Latam Argentina Merval Index 21, ,624 14, Brazil Bovespa Index* 62, ,488 50, Chile IPSA Index 4, ,920 3, Colombia COLCAP Index 1, ,466 1, Mexico Index 49, ,154 43, EEMEA Russia MICEX Index 1, ,294 1, South Africa JSE Index 51, ,717 48, Turkey ISE 100 Index* 100, ,991 70, *Indices expressed as total returns. All others are price returns. Fwd P/E (X) Equity Indices Total return 3-month YTD 3-year 5-year Global equities US equities Europe equities Asia Pacific ex Japan equities Japan equities Latam equities Emerging Markets equities All total returns quoted in US dollar terms. Data sourced from MSCI AC World Total Return Index, MSCI USA Total Return Index, MSCI AC Europe Total Return Index, MSCI AC Asia Pacific ex Japan Total Return Index, MSCI Japan Total Return Index, MSCI Emerging Markets Latin America Total Return Index and MSCI Emerging Markets Total Return Index. July 2017 Investment Monthly 7

8 Market data (cont d) Bond indices Total return MTD 3-month YTD Close BarCap GlobalAgg (Hedged in USD) JPM EMBI Global BarCap US Corporate Index (USD) 2, BarCap Euro Corporate Index (Eur) BarCap Global High Yield (USD) Markit iboxx Asia ex-japan Bond Index (USD) Markit iboxx Asia ex-japan High-Yield Bond Index (USD) Total return includes income from dividends and interest as well as appreciation or depreciation in the price of an asset over the given period Bonds End of last month 3-months ago July 2017 Investment Monthly 8 ago Year end 2016 Close US Treasury yields (%) 3-Month Year Year Year Year Developed market 10-year bond yields (%) Japan UK Germany France Italy Spain Currencies (vs USD) End of last month 3-months ago ago Year end 2016 High Low Latest Developed markets EUR/USD GBP/USD CHF/USD CAD JPY AUD NZD Asia HKD CNY INR MYR KRW 1,144 1,120 1,118 1,152 1,206 1,212 1,090 TWD Latam BRL COP 3,046 2,916 2,874 2,920 3,002 3,208 2,822 MXN EEMEA RUB ZAR TRY Commodities MTD 3-month YTD High Low Latest Gold 1, ,375 1,121 Brent Oil WTI Crude Oil R/J CRB Futures Index LME Copper 5, ,204 4,582

9 Important information This document has been prepared by HSBC Global Asset Management Limited (AMG) and is distributed by HSBC Investment Funds (Canada) Inc. (HIFC), HSBC Private Wealth Services (Canada) Inc. (HPWS), and the HSBC InvestDirect division within HSBC Securities (Canada) Inc. (HIDC) ( we refers to AMG, HIFC, HPWS, and HIDC collectively). The contents of this document may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose or otherwise, without the prior written permission of AMG. All non-authorised reproduction or use of this document will be the responsibility of the user and may lead to legal proceedings. The material contained in this document is for general information purposes only and does not constitute advice or a recommendation to buy or sell investments. 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