BEMO WEEKLY INSIGHTS I EQUITY MARKETS

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1 BEMO WEEKLY INSIGHTS I EQUITY MARKETS INTERNATIONAL MARKETS INDICES Last Price WTD % YTD % 10D Vol World % 0.28% -0.34% Developed % 2.28% -0.12% Emerging % % -2.37% Frontier % % 0.72% Europe % -3.32% 2.48% Latin America % -6.90% 1.00% Asia Pacific % -8.15% -1.18% INTERNATIONAL EQUITY INDICES Last Price Daily % YTD % 10D Vol EuroStoxx % -5.04% 0.20% FTSE % -5.10% 0.64% CAC % 0.26% 2.87% DAX % -6.86% -1.17% Swiss SMI % -4.36% 1.76% Nikkei % 4.48% 0.89% CSI % % 0.00% INTERNATIONAL MARKETS INDICES Last Price WTD % YTD % 10D Vol Major Indices DowJones % 6.99% 1.03% S&P % 0.00% 2.29% Nasdaq % 0.00% 6.48% Sectors Indices Discretionary % 14.24% 2.79% Staples % -6.38% -3.22% Energy % 7.12% -1.07% Financials % 0.24% 0.47% Healthcare % 14.22% 2.75% Industrials % 4.12% -2.96% IT % 16.84% 7.63% Materials % -4.66% -1.20% Telecom % -5.49% 4.76% Utilities % 1.82% 1.20% Real Estate % -3.68% -2.74% Markets got off to a solid start early in the week but ended the week lower following the joining of Canada to a new and revised trade deal with the U.S and Mexico, dubbed the USMCA. However, larger trade issues with China remained in the background and seemingly slowed the rally later in the day. Tensions with China further escalated following commentary from U.S Vice President Pence, where he harshly criticized Chinese trade policy in addition to accusing the Chinese of attempting to interfere in the mid-term elections. Focus shifted later in the week to the significant rise in longterm treasury yields which in turn, impacted both the stock and bond markets with the yield touched its highest level since Financials consequently performed well due to the increase in yields which boosts banking margins. Within the S&P index, energy shares were among the best performers, buoyed by a rise in oil prices. Consumer discretionary shares lagged, in large due to a weak performance from Amazon with the tech giant now making up a large portion of the sector. European stocks followed their American counterparts lower amid a rise in global bond yields while worries about the Italian government s budget deficit again took center stage and continued to weigh in. The pan- European Stoxx 600 was lower, falling in excess of 1.5 percent. Oil-related equities also rose following the increase in oil prices. Italian banks were notable underperformers following fears that the country s sovereign debt would be downgraded. Fresh worries about Greek banks also weighed in on the broader European banking sector as fears regarding their ability to handle a plethora of bad loans surfaced. Japanese equities were lower for the week despite starting on a positive note with concerns about U.S trade policy receding as U.S President Trump agreed not to impose additional import tariffs on Japan s coveted automotive industry. News in Japan last week centered on Christine Lagarde, the managing director of the International Monetary Fund warning about increasing risks to the Japanese economy, further expressing concern about a potential slowdown. INDICES PERFORMANCE VS VOLATILITY SECTORS PERFORMANCE VS VOLATILITY

2 BEMO WEEKLY INSIGHTS I FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET Last Price WTD % 10D Vol 25RR Major Indices USD Index % 0.15% - EUR/USD % -0.44% USD/JPY % 0.01% GBP/USD % -0.16% USD/CAD % 0.33% AUD/USD % -0.06% NZD/USD % -0.17% USD/CHF % 0.08% USD/NOK % -0.38% USD/SEK % -0.18% USD/CNY % 0.00% Major EUR Cross Rate EUR/GBP % 0.61% EUR/CHF % 0.73% EUR/JPY % -0.84% FX PERFORMANCE VS VOLATILITY MARKET COMMENTARY The US dollar rose for a second consecutive week, fueled by the comments of Fed Chair Jerome Powell stating that rates may need to rise beyond the neutral level. The currency accelerating momentum was further supported by a drop in the unemployment rate to a 48-year low. In such environment the fundamentals will continue to push the dollar higher, and the general momentum is function of this week s CPI/PMI Data. The pound ended the week higher as Brexit negotiations are shifting from being negative (on both sides) to being positive. All stakeholders are actively seeking a trade agreement that is acceptable by all sides, and as long as the sentiments are positive the trend in the currency should not reverse. The EUR ended the week lower, pressured by a stronger US Dollar, future inflation risks in the US, and the Italian political unrest. Moreover, as the Italian government sticks to its position on next year s controversial budget a rally in the currency is highly unlikely. The yen weakened against the dollar, weighed down by higher U.S. yields and a slump in China s yuan after the long holidays. Moreover, during the week the currency fell to its lowest in nearly 11 months as Japanese stocks rose to their highest since 1991, and as a new trade deal between Canada, the U.S. and Mexico buoyed risk sentiment. DISTANCE FROM 52 WEEKS LOW/HIGH 25 RISK REVERSAL

3 BEMO WEEKLY INSIGHTS I FIXED INCOME GLOBAL BOND INDICES Yield Yield (in Bps) Benchmark Indices US 10 Years Benchmark EU 10 Years Benchmark UK 10 Years Benchmark Sovereign Bonds US Treasury Bond Eurozone Sovereign Bond Japan Sovereign Bond Corporate Bonds US Investment Grade Bond US High Yield Bond EUR Investment Grade Bond EUR High Yield Bond USD Emerging Market IG & HY DAYS HIGH YIELD VS INVESTMENT GRADE Yields across the U.S sovereign curve rose significantly last week pushing bond prices lower, with the benchmark 10-year Treasury note settling at its highest level since 2011, above 3.20 percent. An interview with Federal Reserve Chairman Powell seemed to spark a selloff on Wednesday, where he described the economy as firing on all cylinders. U.S economic data also released Wednesday complemented his commentary. The non-farm payrolls report was released Friday, where it revealed that employers added 134,000 jobs in September with the unemployment rate falling to its lowest since 1969, consequently adding to inflationary fears in the market. European bond yields across the continent followed American Treasuries higher with Italian yields being the most notable underperformers amid budget deficit worries with the European Union. An announcement by the European Central Bank that it would reduce its monthly bond purchases to 15 billion in October, half the amount purchased in September, equally weighed in. Yields on 10-year German, Spanish and Portuguese bonds all reached multi-months highs. The United Kingdom s 10-year gilts yield rose to its highest level since the country voted to leave the European Union in SOVEREIGN BENCHMARK 10 Y YIELD CHANGES UNITED STATES EUROPEAN UNION UNITED KINGDOM LAST WEEK - CURRENT EU VS US 2Y & 10Y BENCHMARK SPREAD

4 BEMO WEEKLY INSIGHTS I COMMODITIES ENERGY PRECIOUS METALS BASE METALS Energy Last Price WTD % WTI Crude Future % Brent Crude Future % NYMEX Gasoline % NYMEX Heat Oil % ICE Gasoil % NYMEX Natural Gas % ENERGY PERFORMANCE VS VOLATILITY Precious Metals Last Price WTD % Gold Spot $/Oz % Silver Spot $/Oz % Platinum Spot $/Oz % Palladium Spot $/Oz % Gold Future % Silver Future % PRECIOUS METALS PERFORMANCE VS VOLATILITY Base Metals Last Price WTD % LME Aluminum % LME Copper % LME Zinc % LME Nickel % LME Lead % LME Tin % AGRICULTURAL Agricultural Last Price WTD % Corn CBT % Wheat CBT % Soybeans CBT % Bean Meal CBT % Rough Rice CBT % MDE Palm Oil % Soybean CBT % Coffee ICE % Sugar #11 ICE % Cotton #2 ICE % Cocoa ICE % Ethanol CME % Lumber CME % Orange Juice ICE % Live Cattle CME % Feeder Cattle CME % Lean Hogs CME % Oil recorded its fourth weekly climb in a row as market participants continued to ponder how major producers will offset the decreased output from Iranian exports amid looming U.S sanctions. OPEC reported that 15 members raised their crude-oil output in September to 33 million barrels a day, constituting a rise of 180,000 barrels per day from August according to Standard & Poor s Global Platts survey. Figures released also showed that OPEC and non-opec producers have surpassed their stated aim of raising production by a combined 1 million barrels per day from May levels. Goldman Sachs also estimates a loss of 1.5 million barrels per day in the fourth quarter with Venezuelan and Iranian exports on a downward spiral. The number of active U.S rigs drilling for oil, fell by 2 this week to 861, the third consecutive weekly decline. In other oil-related news, Bloomberg reported on Friday that Saudi Arabian Crown Prince Mohammed Bin Salman plans to hold an initial public offering for Saudi Aramco by Gold was able to register a weekly increase of several dollars in the wake of non-farm payrolls reported by the U.S indicating that the economy added fewer jobs than expected in September. Increased yields this week, reaching multi-year highs, and a stronger dollar failed to stop gold s advance.

5 BEMO WEEKLY INSIGHTS I ECO CALENDAR KEY ECONOMIC INDICATORS Country Event Surv(M) Prior Time Date Time Canada Housing Starts 208.4k 201.0k 15:15 10/9/ :15 China Money Supply M2 YoY 8.30% 8.20% 10/10/18-10/15/18 China Trade Balance $19.15b -- 10/12/2018 France CPI YoY 2.20% 2.20% 9:45 10/11/2018 9:45 France Industrial Production MoM 0.20% 0.70% 9:45 10/10/2018 9:45 France Industrial Production YoY 1.50% 1.80% 9:45 10/10/2018 9:45 Germany Industrial Production SA MoM 0.30% -1.10% 9:00 10/8/2018 9:00 Germany CPI YoY 2.30% 2.30% 9:00 10/12/2018 9:00 Germany CPI MoM 0.40% 0.40% 9:00 10/12/2018 9:00 Italy Industrial Production MoM 0.80% -1.80% 11:00 10/10/ :00 Japan BoP Current Account Balance b b 2:50 10/9/2018 2:50 Japan Core Machine Orders MoM -3.70% 11.00% 2:50 10/10/2018 2:50 Japan PPI YoY 2.90% 3.00% 2:50 10/11/2018 2:50 Japan Tertiary Industry Index MoM 0.30% 0.10% 7:30 10/12/2018 7:30 Jordan CPI YoY % 10/11/18-10/18/18 United Kingdom Industrial Production MoM 0.10% 0.10% 11:30 10/10/ :30 United Kingdom Manufacturing Production MoM 0.10% -0.20% 11:30 10/10/ :30 United States Initial Jobless Claims 210k 207k 15:30 10/11/ :30 United States CPI MoM 0.20% 0.20% 15:30 10/11/ :30 United States U. of Mich. Sentiment :00 10/12/ :00 United States DOE U.S. Crude Oil Inventories k 18:00 10/11/ :00 United States MBA Mortgage Applications % 14:00 10/10/ :00 United States PPI Final Demand MoM 0.20% -0.10% 15:30 10/10/ :30 United States Wholesale Inventories MoM 0.80% 0.80% 17:00 10/10/ :00 United States Import Price Index MoM 0.20% -0.60% 15:30 10/12/ :30 Banque BEMO sal Head Office - Private and Corporate Banking 96 Pasteur Building, Pasteur Street, Medawar Area, P.O. Box: , Beirut - Lebanon Tel: Fax: Investment & Research research@bemobank.com Beirut Central District Riad El Solh Square, Esseily Building Bloc A, 7th Floor Beirut - Lebanon Tel: Fax: Disclaimer: This report is published for information purposes only. The information herein has been compiled from, or based upon sources considered to be reliable (Bloomberg, SeekingAlpha, DailyStar ), but we do not guarantee or assume responsibility for its completeness and accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. This report is not to be relied upon in substitution for the exercise of specialists. We may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. The investments and services contained or referred to herein are not purported to be exhaustive, any person considering an investment should seek specialist advice on the suitability of an investment. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation. Clients understand that it is their responsibility to seek legal and/or tax advice regarding the legal and tax consequences of their investment transactions. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient. Investment instruments are subject to risk, including possible loss of principal amount invested. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Some investments mentioned in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realized. Some investments may not be readily realizable and it may be difficult to sell or realize those investments, similarly it may prove difficult to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of websites or references. We have not reviewed any such site and takes no responsibility for the content contained therein. Such address or reference is provided solely for convenience and information. Accessing such website through this report shall be at the recipients own risk.