Gold Strategy: West to East

Transcription

1 Disseminated: March 29, :ET; Produced: March 29, :ET RBC Capital Markets, LLC Christopher Louney Commodity Strategist (212) March 29, 217 Gold Strategy: West to East Gold has climbed by roughly $1/oz since the start of the year and we view its most recent bid as the market repricing a number of risks. This month, we also dive deeper into available data in an attempt to uncover unaccounted for Chinese gold demand in the context of the ongoing flow of gold from west to east. This Month in Focus: In this month s focus we dive deeper into the structure of the domestic Chinese gold market, local supply and demand figures, and take a particular focus on trade statistics and implied Chinese domestic gold demand. The structure of the Chinese gold market and the central role of the Shanghai Gold Exchange together provide a useful framework in which to analyze trade flows and ultimately point towards otherwise unaccounted for Chinese gold demand. Trade data (while not perfect) shows continued high levels of shipments to Hong Kong and an increasing flow of gold directly to mainland China; China has remained a significant net importer. In our view, while there is not enough data to definitively point towards any particular source of unaccounted for demand, we do think that there is at least some additional demand that may at least partially account for some of the net long that has developed in supply and demand balances (page 2). Monthly Market Analysis: Gold prices are up an impressive $1/oz since the start of the year. That move however masks a bit of a rocky path, the materialization of unknowns and the pricing in of additional risk something we have cautioned. Most recently, we think gold got a bid due to the US healthcare reform saga as the market repriced its expectations for prospective economic reforms. In our view, the healthcare saga was interpreted by the gold market as an indicator for more gold-relevant economic issues (i.e. tax reform, trade, and other macro-relevant policy issues). Preliminary Q1 average prices are roughly 3% higher than our Q1 forecast and as we approach Q2, gold appears to be trending towards our existing Q2 forecast of $1259/oz. We think gold will be mostly rangebound for the balance of 217 as unknown/economic policy risk premiums get repriced throughout this year, against a backdrop otherwise full of macro headwinds a view still in line with our Trumped Up, Tickle Down trading thesis for 217 (page 6). Figure 1: Modeled gold forecasts and historical ETF holdings 2 Modeled versus actual gold prices ($/oz) Forecast Modeled price ETF holdings (t) Actual price Mar- Mar-2 Mar-4 Mar-6 Mar-8 Mar-1 Mar-12 Mar-14 Mar-16 Mar-18 Source (all): Bloomberg, other sources, proprietary models, RBC Capital Markets Preliminary Q1 17 avg 1 5 All values in USD unless otherwise noted. Priced as of prior trading day s market close, ET (unless otherwise stated). For Required Conflicts Disclosures, please see page 15.

2 Table of Contents Monthly Market Analysis... 6 Macro Factors... 7 Physical and Financial Demand... 8 Asia Regional Factors... 9 Supply Factors... 1 Pricing, Ratios and Exchange Holdings CFTC Positioning in Precious Metals (managed money and swap dealers) Correlation Matrix Global Economic Calendar Figure 2: Basic diagram of SGE gold flows in China Diving Deeper into Chinese Demand Unlike other financial assets, commodity markets oft struggle with a dearth of data. Whereas in most cases financial markets have a surplus of large data-sets to utilize, the fundamental, physical, and on-the-ground nature of commodity markets means that data is sometimes incomplete, especially given that tracking every molecule of every commodity on a global basis is not always possible gold is by no means an exception. While benchmark data (and our balances) cover most demand categories globally, diving deeper into trade flows data shows that the market is likely underestimating total demand in China to some extent an exercise that is complicated not only by the structure of China s domestic gold market, but also by the fact that China trade flows data is incomplete given that the country does not report its own gold trade statistics, thus forcing us to rely other sources. Before we get to the trade data, let us first establish how China s domestic gold market is structured on a high level. The vast majority of gold circulating in the domestic market flows through the Shanghai Gold Exchange (SGE). Whether domestically mined, recycled or imported, the gold destined for the SGE must first be refined at an approved refiner. After entering the SGE, physical withdrawals then enter the market for consumption in the jewelry, technology, bar/coin, and other sectors. Once gold is withdrawn from the SGE, private investors or non-sge members cannot sell it directly back onto the exchange it must go through the refineries, including recycled gold. Technically, there are two potential paths for gold outside of the direct to SGE path, 1) importing banks can store imported gold on consignment before it goes to the exchange, and 2) some manufacturers with the necessary licenses can potentially import and export gold outside of the SGE (WGC). All said, the vast majority of gold flows through the SGE. Supply Imports (some held on consignment) Mined production Scrap (gold for gold and gold for cash) The vast majority of gold is refined and enters the SGE, with physical withdrawals meeting local demand Refineries Inflationary Shanghai Gold Exchange (SGE) Recycled gold (for gold) Demand Consumer (jewelry, technology, industrial, bar and coin sectors) Recycled gold (for gold and cash), exports (limited) and other Imports Im-Ex licensed manufacturers and possible round tripping Included in most scrap estimates Recycled gold (for cash) Rest of World Limited manufactured items (i.e. jewelry) can be exported Source (all): World Gold Council (WGC), RBC Capital Markets March 29, 217 2

3 Now for the trade data. Historically, the vast majority of gold imported into mainland China came via Hong Kong, but an increasing amount of direct to mainland gold shipments have been reported from other important gold trading partners. That said, Hong Kong remains by far the largest share. Net shipments from Hong Kong into mainland China peaked at over 1,1 tons in 213, higher than any other year prior as a price responsive wave of demand arose when prices fell precipitously over the course of 213. Net gold shipments from Hong Kong to the mainland have remained lower ever since, following a mostly downward trend. In 216, net shipments across all gold products totalled nearly 65 tons, still by far the largest source of shipments into China. Swiss exports, the next most prolific source for China, historically first went to Hong Kong, before at least in part being exported to mainland China. Recently, flows direct to mainland China have reached and even surpassed gold exports to Hong Kong overall. In fact, by our estimates, in 216 gold exported directly to mainland China totalled more than 44 tons, versus more than 16 tons to Hong Kong. By our estimates, flows from Australia to China totaled just 45 tons in 216, far lower than last year and still lower than shipments to Hong Kong, which in contrast were mostly stable y/y in 216. Gold flows from the United Kingdom were weak in 216, at just 23 tons, versus well over 2 tons in 215. With minimal exports from elsewhere going directly to mainland China, the UK, Switzerland and Australia together account for more than 95% of non-hong Kong flows into mainland China. On the next page, we map out global flows of unwrought, semi-manufactured and power gold into China (131.4 tons total) and Hong Kong. Figures 3-6: Hong Kong net gold trade with mainland China, Australia, Swiss and UK net gold trade with China and Hong Kong Hong Kong total gold trade with China (t) Exports Imports Net exports Swiss gold trade (t) China (net, tons) Hong Kong (net, tons) Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 3 Australian gold trade (t) 25 China (net, tons) Hong Kong (net, tons) Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 (4) Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 6 UK gold trade (t) China (net, tons) Hong Kong (net, tons) Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 Source: UN COMTRADE, ABS, Swiss Federal Customs Administration, Hong Kong Census and Statistics Bureau, HM Revenue and Customs, USGS, Bloomberg, RBC Capital Markets March 29, 217 3

4 Figure 7: Gold exports to mainland China (unwrought, semi-manufactured or powder, tons) Source: UN COMTRADE, ABS, Swiss Federal Customs Administration, Hong Kong Census and Statistics Bureau, HM Revenue and Customs, USGS, Bloomberg, RBC Capital Markets Figures 8 & 9: Gold exports directly to mainland China, Hong Kong imports by source versus net exports to mainland China 2, Gold net-exports to China (tons) (unwrought, semi-manufactured, powder) 2, Hong Kong gold imports (unwrought, semimanuf., powder) vs net exports to China (tons) 1,6 1,2 Hong Kong Europe Australia Other 1,5 1, Europe North America Asia Other Net exports to China Source (all): UN COMTRADE, ABS, Swiss Federal Customs Administration, Hong Kong Census and Statistics Bureau, HM Revenue and Customs, USGS, Bloomberg, RBC Capital Markets Note: These figures cover unwrought, semi-manufactured, and gold in powder form only. Data is sourced from both national and supernational trade statistics sources. March 29, 217 4

5 Now how does this compare to the supply and demand figures for which we have concrete data? Most major data sets (ours included) account for around 9 tons or more of Chinese consumer demand (jewelry fabrication, bar and coin, etc.) and more than 8 tons of official sector purchases in 216, but by stacking net imports (131.4 tons), domestic production (445 tons), and net scrap supply (gold for cash of 241 tons) we can see that a lot of gold is theoretically available for the domestic market. Firstly, let s ignore the possible implications of any mislabling of trade statistics or significant impurities in imports. Then let us consider, as we described earlier, SGE withdrawals (which totalled 197 tons in 216) which satisfy domestic demand. After adjusting our theoretical supply figure for small amounts of manufacturing/processing trade and any possible consignment holdings, we can get roughly to the SGE withdrawal figure. Admittedly, there are a number of unknowns (i.e. trade figures could be overstated, etc.) and there is likely some gold-for-gold recycling and circulation of gold through the domestic market inflating withdrawal figures, however, as mentioned previously, available consumer demand figures are far less, only covering roughly 55% of the withdrawal figure. So where is the rest of the gold going? With regard to the remainder of the balance, there are a number of options which a number of market participants have raised the possibility of any or all could be real. They include direct private sector purchases, institutional demand, industry inventory, banking inventory, exports, leasing, etc. We are not going to decide which of these explanations possesses the most merit (if any) as there is not enough data to do so in our view. We merely point out that this difference likely represents some of the net long that has materialized in our benchmark gold supply and demand balances. While we resist the temptation to put an exact estimate on this given the number of assumptions and estimates necessary to get there, we do think that this merits watching and could represent a significant and perhaps growing portion of the net long in gold supply and demand balances. See the next page for our Monthly Market Analysis and the following pages for our extensive chart deck and monthly figures. March 29, 217 5

6 Monthly Market Analysis Figure 1: Modeled gold prices Mar- Mar-4 Mar-8 Mar-12 Mar-16 Figure 11: Supply & Demand versus Prices Modeled versus actual gold prices ($/oz) Forecast Modeled price Actual price Physical balance versus prices Supply Demand Price ($/oz) F As we head into Q2 217, gold prices are an impressive $1/oz higher than at the start of the year. That move however masks a bit of a rocky path, the materialization of unknowns and the pricing in of additional risk premiums something we have cautioned. January and February were strong, in line with seasonal norms (albeit perhaps not for the usual reasons). In March, gold fell to the midpoint of its Q1 217 range in the lead up to the rake hike, before again rallying. More recently, we think gold got a bid due to the failure of the US healthcare reform saga. To be clear, gold did not rally because of this issue itself, rather, we think that the market repriced its expectations for Trump s prospective economic reforms. In our view, the healthcare saga was interpreted by the market as an indicator of the prospects for more gold-relevant economic issues such as tax reform, trade, and other macro-relevant policy issues. Preliminary Q1 average prices are roughly 3% higher than our Q1 forecast and as we approach Q2, gold appears to be trending towards our existing Q2 forecast of $1259/oz. With little in our supply and demand balance changed, we think gold will be mostly range-bound for the balance of 217 as unknown/economic policy risk premiums get repriced throughout this year against the backdrop of strong equities, strong dollar and rising rates. In terms of risks to our forecast, to the upside a significant unanticipated risk-off event would trigger a material upwards deviation. On the other side, if global economic trends were to materially improve beyond expectations from current levels, then gold could experience notable downside. Overall however, we remain of the view that our Trumped Up, Tickle Down thesis will hold for the balance of the year, resulting in mostly range-bound price dynamics, albeit with an upwards drift, in 217. Figures 12 & 13: Global Supply & Demand Balance and Price Forecasts, annual and quarterly (Commodity Strategy) Note (all): Price forecasts (published as averages) draw from two primary methodologies. Source (all): Thomson Reuters Eikon, GFMS, WGC, Bloomberg, other sources, RBC Capital Markets Gold balance (t) F 218 F Supply Mine production Scrap supply Net producer hedging Total Supply Demand Jewelry Industrial Dental Bar & Coin ETPs Central Bank purchases Total Demand Balance Price ($/oz) Quarterly Q1 17 F Q2 17 F Q3 17 F Q4 17 F 217 F Q1 18 F Q2 18 F Q3 18 F Q4 18 F 218 F Price ($/oz) March 29, 217 6

7 Macro Factors Figures 14 & 15: Gold versus S&P 5, Gold versus 1yr US Treasuries 2, 1,8 1,6 1,4 1,2 1, S&P 5 (RHS) Gold ($/oz, LHS) 2,6 2,4 2,2 2, 1,8 1,6 1,4 1,2 2, 1,8 1,6 1,4 1,2 1, 1yr US Treasuries (%, RHS) Gold ($/oz, LHS) , 8. Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Figures 16 & 17: Gold versus inflation expectations, Gold versus US CPI 2, 1,8 Inflation Expectations (%, RHS) Gold ($/oz, LHS) , 1,8 CPI (% y/y, RHS) Gold ($/oz, LHS) ,6 2. 1,6 2. 1, , ,2 1. 1,2.5 1,.5 1, Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Figures 18 & 19: Gold versus Trade Weighted Dollar, Gold versus Euro 2, 1,8 1,6 TW$ (level, LHS) Gold ($/oz, LHS) 1 9 2, 1,8 1,6 EUR/USD (RHS) Gold ($/oz, LHS) ,4 8 1, ,2 1, 7 1,2 1, Mar-13 Mar-14 Mar-15 Mar-16 Mar Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Note (all): Index data was sourced from the CFTC IID reports until October 215, all data since is RBC Commodity Strategy s proprietary estimate. Adjusted AUM only accounts for underlying flows. Breakdown between underlying and price effect does not cover non-us investments. Source (all): Bloomberg, CFTC, RBC Capital Markets March 29, 217 7

8 Physical and Financial Demand Figures 2 & 21: Key quarterly gold demand factors, Reported monthly official sector activity 1,5 1, Quarterly demand (WGC, t) Jewellery Investment Central banks Gold Price ($/oz, RHS) 1, Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Figures 22 & 23: Quarterly technology demand factors, Quarterly investment demand factors 2, 1,8 1,6 1,4 1, Reported official sector activity (t) Purchases Sales Jan-16 Apr-16 Jul-16 Oct-16 Jan Quarterly technology demand (WGC, t) Electronics Other Dentistry Gold Price ($/oz, RHS) 2, 1,8 1,6 1,4 1, Quarterly investment demand (WGC, t) Physical bars Official coins Medals/Imitation coins ETPs Gold Price ($/oz, RHS) 2, 1,8 1,6 1,4 1,2 1, Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Figures 24 & 25: Gold ETF holdings, US gold coin sales -6 1, Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 3, 2,5 2, 1,5 1, SPDR ishares ZKB ETFS (UK) GBS (UK) Sprott Other Gold ETF holdings (t) Gold coin sales (koz) Gold price ($/oz) Jan-4 Jan-6 Jan-8 Jan-1 Jan-12 Jan-14 Jan-16 Source (all): WGC, IMF, Thomson Reuters Eikon, Bloomberg, US Mint, RBC Capital Markets Mar-92 Mar-97 Mar-2 Mar-7 Mar-12 Mar-17 March 29, 217 8

9 Asia Regional Factors Figures 26 & 27: Hong Kong and China monthly gold trade, Shanghai Gold Exchange volume and average local prices Hong Kong total gold trade with China (t) Exports Imports Net exports -1 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17 Figures 28 & 29: Quarterly East Asian gold demand, East Asian gold bar premiums Consumer demand by country (t) China Hong Kong Singapore Japan Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Figures 3 & 31: Quarterly Indian gold demand, Indian gold bar premiums Average trading volume (LHS) Average price (RHS, CNY/g) Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Asian gold bar premiums ($/oz) China Hong Hong Singapore Tokyo -5 Mar-16 Jun-16 Sep-16 Dec-16 Mar Consumer demand (t) India 2 Indian gold bar premiums ($/oz) India Q4 12 Q4 13 Q4 14 Q4 15 Q Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Source (all): China and Hong Kong Customs, SGE, WGC, Bloomberg, Thomson Reuters Eikon, RBC Capital Markets March 29, 217 9

10 Supply Factors Figures 32 & 33: Mine and scrap supply, Other supply factors 5 4 Gold supply versus prices Mine production Scrap supply Price ($/oz) Other supply items versus prices Net producer hedging ETPs Central Bank sales Price ($/oz) F F Figures 34 & 35: Mine supply by region, Scrap supply by region 4 3 Gold supply by region (t) North America South America Europe Asia Africa Oceania 2 15 Gold scrap supply by region (t) North America South America Europe Asia Africa Oceania Figures 36 & 37: Quarterly cash costs versus actual prices, Annual cash costs Gold price versus cash costs and all-in costs ($/oz) Gold price Average cash cost Marginal cash cost Average all-in cost Marginal all-in cost 2,5 2, 1,5 Cash costs vs all-in sustaining costs (preliminary $/oz) , 15 4 Average (5%), Marginal (9%) Mar-5 Mar-8 Mar-11 Mar-14 Mar all-in sustaining 216 cash cost 5 Average difference Marginal difference -5 % 25% 5% 75% 1% Source (all): Thomson Reuters Eikon, GFMS, Bloomberg, WGC, company reports, RBC Capital Markets March 29, 217 1

11 Pricing, Ratios and Exchange Holdings Figures 38 & 39: Gold prices in other currencies, Silver prices in other currencies 95 Gold in key currencies Silver in key currencies USD/oz (LHS) EUR/oz (LHS) RMB/oz (RHS) INR/.1oz (RHS) USD/oz (LHS) EUR/oz (LHS) RMB/oz (RHS) INR/.1oz (RHS) Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Figures 4 & 41: Gold forward curve, Silver forward curve 6 1 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 1,6 Gold forward curve ($/oz) As of: 3/29/ Silver forward curve ($/oz) As of: 3/29/217 1,4 19 1,2 1, 8 Months forward Figures 42 & 43: Gold-oil ratio, Gold-silver ratio 6 month range 1 year ago 6 months ago 1 month ago Latest Months forward month range 1 year ago 6 months ago 1 month ago Latest 5 Gold-oil ratio Average over period 1 Gold-silver ratio Average over period Jan-95 Mar-99 Jun-3 Aug-7 Nov-11 Jan-16 2 Jan-95 Mar-99 Jun-3 Aug-7 Nov-11 Jan-16 Source (all): Thompson Reuters Eikon, Bloomberg, exchange information, RBC Capital Markets March 29,

12 CFTC Positioning in Precious Metals (managed money and swap dealers) Figure 44: Managed money and swap dealer positioning table ( lots) As of: 3/21/217 Futures (net long) as % of open interest Open interest (futures) Futures (net long) Futures & Options (net long) Managed money Current month ago Current m/m Current m/m Current m/m Palladium Nymex 65.% 73.4% (.73) Silver Comex 34.% 3.1% (17.33) (12.65) 65.7 (1.4) Platinum Nymex 15.4% -7.2% (15.34) 1.28 (15.48) Gold Comex 12.6% 7.4% (21.85) (16.49) Total/average 31.7% 25.9% (47.86) (4.28) Swap dealers Current month ago Current m/m Current m/m Current m/m Gold Comex -6.8% -3.7% (3.48) (29.5) 18.3 Platinum Nymex -8.4% 1.7% (5.65) 6.84 (5.62) 7.5 Palladium Nymex -12.5% -15.7% (.73) (3.71) (.81) (3.75) (.86) Silver Comex -17.3% -15.7% (17.33) (33.7) 5.82 (34.) 4.47 Total/average -11.3% -8.3% (72.92) (72.87) This page provides a breakdown of managed money positioning and swap dealer positioning in major commodity futures (and options) as defined by the CFTC Commitment of Traders Report. The tables above rank commodities by net long futures position as a percentage of futures open interest versus a month prior. A money manager is defined by the CFTC as a registered commodity trading advisor (CTA); a registered commodity pool operator (CPO); or an unregistered fund identified by CFTC. These traders are engaged in managing and conducting organized futures trading on behalf of clients. A swap dealer is defined by the CFTC as an entity that deals primarily in swaps for a commodity and uses the futures markets to manage or hedge the risk associated with those swaps transactions. The swap dealer s counterparties may be speculative traders, like hedge funds, or traditional commercial clients that are managing risk arising from their dealings in the physical commodity. Figures 45 & 46: Gold managed money positions, Net long as a percentage of futures open interest ' lots Long Short Net 8 6 ' lots Open interest (LHS) % of open interest (RHS) 5% 4% 3% 1 4 2% % % -2-1% Apr-12 Jun-13 Sep-14 Dec-15 Mar-17 Apr-12 Jun-13 Sep-14 Dec-15 Mar-17 Figures 47 & 48: Gold swap dealer positions, Net long as a percentage of futures open interest 2 1 ' lots Long Short Net 8 6 ' lots Open interest (LHS) % of open interest (RHS) 2% 1% % 4-1% % -3% -3 Apr-12 Jun-13 Sep-14 Dec-15 Mar-17-4% Apr-12 Jun-13 Sep-14 Dec-15 Mar-17 Source (all): CFTC, Bloomberg, RBC Capital Markets March 29,

13 WTI Crude Brent Crude Natural Gas Gold Platinum Copper Aluminum Corn Wheat Soybeans S&P 5 TSX Index Nikkei Index Shanghai Comp. US Inflat. Index US 1yr Canadian 1yr Japan 1yr USD Index EUR/USD USD/JPY USD/CAD Gold Strategy: West to East Correlation Matrix Figure 49: Cross asset correlation matrix covering major commodities, equity, yield and foreign exchange marks Correlation Matrix 1 month As of: 29-Mar-17 3 month WTI Crude Brent Crude Natural Gas Gold Platinum Copper Aluminum Corn Wheat Soybeans S&P TSX Index Nikkei Index Shanghai Comp US 1yr Tips US 1yr Canadian 1yr Japan 1yr USD Index EUR/USD USD/JPY USD/CAD Scale: 3 month correlation (bottom) Positive -> Negative 1 month correlation (top): Positive -> Negative Source: Bloomberg, RBC Capital Markets This page provides cross asset correlations. Source data is from Bloomberg as of the date indicated in the table. Darker colors indicate more positive correlations while lighter colors indicate more negative correlations. The top right section indicates one-month correlations of daily changes while the bottom left indicates three-month correlations of daily changes. Yield markets were calculated on the yields themselves. This table covers the major commodity markets (energy, precious metals, base metals and agriculture), major global equity indexes, major yield markets, and major FX indexes and crosses. March 29,

14 Global Economic Calendar Figure 5: Major commodity-relevant economic data releases 27-Mar 28-Mar 29-Mar 3-Mar 31-Mar EIA Petroleum Status Report EIA Natural Gas Report US Jobless Claims US GDP EC Economic Sentiment Japan CPI, Unemployment Baker-Hughes rig count Canada Monthly GDP UK GDP 3-Apr 4-Apr 5-Apr 6-Apr 7-Apr US ISM Manufacturing Index RBC Announcement EIA Petroleum Status Report FOMC Minutes EIA Natural Gas Report US Jobless Claims ECB Minutes Baker-Hughes rig count 1-Apr 11-Apr 12-Apr 13-Apr 14-Apr UK CPI, PPI EZ Industrial Production China CPI, PPI EIA Petroleum Status Report UK Labor Market Report Bank of Canada Announcement Bank of Canada Monetary Policy Report Australia Labor Force Survey EIA Natural Gas Report US Jobless Claims Baker-Hughes rig count 17-Apr 18-Apr 19-Apr 2-Apr 21-Apr RBA Meeting Minutes US Industrial Production EIA Petroleum Status Report EIA Natural Gas Report US Jobless Claims Baker-Hughes rig count German, Euro Zone PMI Source: WSJ, Econoday, Bloomberg, Reuters, RBC Capital Markets Recent Commodity Strategy Research OPEC: Ready to Roll? (March 26, 217) Commodity Comment: Opposition Forces (March 23, 217) OPEC: Agents of Influence (March 21, 217) Commodity Comment: Who s the Boss? (March 16, 217) Oil Strategy: Blind Spots? (March 16, 217) March 29,

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Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license. Copyright RBC Capital Markets, LLC Member SIPC Copyright RBC Dominion Securities Inc Member Canadian Investor Protection Fund Copyright RBC Europe Limited 217 Copyright Royal Bank of Canada 217 All rights reserved March 29,

17 Fixed Income & Currency Strategy Research Team Europe RBC Europe Limited: Adam Cole Chief Currency Strategist adam.cole@rbccm.com Vatsala Datta UK Rates Strategist vatsala.datta@rbccm.com Sam Hill, CFA Senior UK Economist sam.hill@rbccm.com Cathal Kennedy European Economist +44() cathal.kennedy@rbccm.com Peter Schaffrik Global Macro Strategist peter.schaffrik@rbccm.com Asia-Pacific Royal Bank of Canada Sydney Branch: Su-Lin Ong Head of Australian and New Zealand FIC Strategy su-lin.ong@rbccm.com Michael Turner Fixed Income & Currency Strategist michael.turner@rbccm.com Royal Bank of Canada Hong Kong Branch: Sue Trinh Head of Asia FX Strategy sue.trinh@rbccm.com North America RBC Dominion Securities Inc.: Mark Chandler Head of Canadian FIC Strategy (416) mark.chandler@rbccm.com George Davis Chief Technical Analyst (416) george.davis@rbccm.com Simon Deeley Fixed Income Strategist (416) simon.deeley@rbccm.com RBC Capital Markets, LLC: Michael Cloherty Head of US Rates Strategy (212) michael.cloherty@rbccm.com Tania Escobedo Jacob Latam FX Strategist (212) tania.escobedo@rbccm.com Elsa Lignos Global Head of FX Strategy (212) elsa.lignos@rbccm.com Jacob Oubina Senior US Economist (212) jacob.oubina@rbccm.com Tom Porcelli Chief US Economist (212) tom.porcelli@rbccm.com Daria Parkhomenko Associate (212) daria.parkhomenko@rbccm.com Commodities Strategy Research Team North America RBC Capital Markets, LLC: Helima Croft Global Head of Commodity Strategy (212) helima.croft@rbccm.com Christopher Louney Commodity Strategist (212) christopher.louney@rbccm.com Michael Tran Commodity Strategist (212) michael.tran@rbccm.com March 29,