BEMO MONTHLY BULLETIN I EQUITY MARKETS

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1 BEMO MONTHLY BULLETIN I EQUITY MARKETS GLOBAL EQUITY BENCHMARK INDICES Last Price MTD % YTD % 30D Vol World % 1.29% -0.26% Developed % 2.36% -0.40% Emerging % -6.13% -1.77% Frontier % -8.37% -2.58% Europe % 0.45% -0.94% Latin America % -4.45% -3.00% Asia Pacific % -3.93% -0.83% Last Price MTD % YTD % 30D Vol EuroStoxx % 0.61% -1.52% FTSE % 0.79% -1.04% CAC % 3.74% 0.03% DAX % -0.87% -0.69% Swiss SMI % -2.21% -2.78% Nikkei % -0.93% 1.42% CSI % % 1.53% S&P Indices INTERNATIONAL EQUITY INDICES Last Price MTD % YTD % 30D Vol S&P % 5.34% -0.27% S&P Value % 0.30% -2.81% S&P Growth % 10.14% 1.98% Sectors Indices S&P 500 IN FOCUS Discretionary % 12.71% -0.62% Staples % -6.43% -2.43% Energy % 6.70% -3.75% Financials % -0.02% -1.80% Healthcare % 7.54% 0.35% Industrials % 1.25% -0.22% IT % 12.41% 4.22% Materials % -1.20% -1.95% Telecom % -9.92% -2.58% Utilities % 0.28% 1.14% Real Estate % 0.03% 0.33% Equities markets were up as trade war fears abated as the EU and the US maintained open discussions regarding tariffs. European equities in particular found support in a Trump-Juncker discussion of trade war agreements reducing tariffs on US imports of European cars and raw materials. Investors turned their focus towards corporate earnings and a macroeconomic data. The earning season remained strong with the exception of social media indicating lower user growth. Moving forward, near-term performance will be highly driven by central banks decisions. The ECB indicated to end its asset purchase program by December, while the BoJ committed to maintaining low yields. However hawkish moves by the BoE and the Fed could result in capital-heavy firms facing a more negative outlook. DEVELOPED VS EMERGING - MONTH TO DATE EMERGING DEVELOPED INTERNATIONAL EQUITY - MONTH TO DATE CAC 40 FTSE 100 DAX NIKKEI 225 VALUE GROWTH S&P 500 SUPPORT & RESISTANCE S&P VALUE VS GROWTH

2 BEMO MONTHLY BULLETIN I FOREIGN EXCHANGE FOREIGN EXCHANGE PERFORMANCE Major Indices Last Price MTD % 30D Vol 25 RR USD Index % -0.03% - EUR/USD % -0.03% USD/JPY % -0.12% GBP/USD % -0.17% USD/CAD % 0.01% AUD/USD % 0.01% NZD/USD % 0.04% USD/CHF % -0.07% USD/NOK % -0.25% USD/SEK % 0.00% USD/CNY % -0.01% Major EUR Cross Rate EUR/GBP % -0.11% EUR/CHF % -0.04% EUR/JPY % -0.01% DISTANCE FROM 52 WEEKS LOW/HIGH The USD saw some pressure relieved following positive talks with European Commission President Juncker, which eased trade war pricing pressures. Meanwhile, the Chinese economy witnessed more relaxed credit conditions and an accommodative policy following a heigher risk of bond defaults. The Euro was more heavily impacted by negative political developments early during the month in Germany, following an immigration dispute between Merkel and interior minister Seehofer almost resulting in the latter s resignation. Meanwhile, Draghi s announcement of the extension of the ECB s asset purchasing program to end-december to support macroeconomic growth provided the Euro with some support. Investors will be attentive to interest rate decisions in the UK and US, with guidance and economic indicator results to continue to impact market trends. EUR/USD 1 MONTH SUPPORT & RESISTANCE GBP/USD 1 MONTH SUPPORT & RESISTANCE USD/JPY 1 MONTH SUPPORT & RESISTANCE USD/CAD 1 MONTH SUPPORT & RESISTANCE

3 BEMO MONTHLY BULLETIN I FIXED INCOME July saw upwards parallel shifts in yield curves across most developed economies, as the US and UK are expected to increase monetary tightening policies. The BoJ decided to keep rates low by increasing its purchase of ETFs tied to the Topix, adding 1.5 trillion to its ETF amount. In the US, a positive quarterly GDP report increased the probability of a fourth rate hike. The Fed decision warrants more decisive wage growth data and clearer inflation indicators. Benchmark Indices GLOBAL BOND INDICES Yield Yield (in Bps) US 10 Years Benchmark EU 10 Years Benchmark UK 10 Years Benchmark Sovereign Bonds US Treasury Bond Eurozone Sovereign Bond U.K. Sovereign Bond Japan Sovereign Bond The EU has already decided to extend QE to end-december, citing growth concerns amid inconsistent macroeconomic data. Hopes for a conclusion to the trade dispute between the US and China helped European yields up regardless. Moving forward, a BoE rate hike scheduled for Thursday may have a reduced investor confidence impact due to Brexit concerns, while a Fed rate hike would negatively affect dollardenominated emerging market bonds. US TREASURIES YIELD CURVE - 1 MONTH EUR GENERIC YIELD CURVE - 1 MONTH Corporate Bonds US Investment Grade Bond US High Yield Bond EUR Investment Grade Bond EUR High Yield Bond USD Emerging Market IG & HY OVERNIGHT RATES - SWAPS Rate Rate (in Bps) 3M USD LIBOR M EUR EURIBOR M GBP LIBOR Y USD SWAP Y USD SWAP Y USD SWAP Y USD SWAP FIXED INCOME SPREADS Spread Spread (in Bps) USD 3M vs 10Y Spread (0.0032) USD 2Y vs 10Y Spread (0.0415) USD IG Spread 1.48 (0.1600) USD HY Spread 3.34 (0.2900) EU vs US 10Y Spread EU vs US 2Y Spread (0.0529) EM vs Benchmark Spread 2.48 (0.2230) USD CORPORATES - 1 MONTH SPREAD EU VS US - 1 MONTH SPREAD

4 BEMO MONTHLY BULLETIN I COMMODITIES GLOBAL COMMODITIES MARKET Last Price Daily % Commodity Index % Energy WTI Crude Future % Brent Crude Future % NYMEX Gasoline % NYMEX Heat Oil % ICE Gasoil % NYMEX Natural Gas % Precious Metals Gold Spot $/Oz % Silver Spot $/Oz % Platinum Spot $/Oz % Palladium Spot $/Oz % Gold Future % Silver Future % Platinum Future % Palladium Future % Base Metals LME Aluminum % LME Copper % LME Zinc % LME Nickel % LME Lead % LME Tin % Agricultural 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 % Gold continued its recent decline as investors turned to yield generating assets in a rising interest rates environment. Furthermore, as trade war fears were assuaged, investors turned away from safe-haven instruments, putting further pressure on bullion prices. Oil prices were lower weighed down by oversupply concerns as the US and Saudi Arabia plan to boost output to counterbalance sanctions on Iran and Venezuela and as Libya continues to increase its output. Basic metals and agricultural commodities recovered after witnessing bouts of volatility driven by trade negotiations and their impact on global growth. The US and EU trade agreement resulted in lower tariffs on steel and aluminum, and also led to the EU agreeing to boost soybean imports from the US. COMMODITY INDEX SUPPORT & RESISTANCE GOLD 1 MONTH SUPPORT & RESISTANCE

5 BEMO MONTHLY BULLETIN I MARKET TRENDS KEY ASSETS TRENDS * Monthly trends are calculated based on the last two-month period CENTRAL BANKS WATCH - IMPLIED RATES PROBABILITIES FEDERAL RESERVES EUROPEAN CENTRAL BANK BANK OF ENGLAND BANK OF JAPAN FEAR BAROMETERS LOW FEAR HIGH FEAR The CS Fear Barometer measures investor sentiment for 3-month investment horizons by pricing a zero-cost collar. The higher the level, the greater the fear. LOW VOLATILITY HIGH VOLATILITY The Chicago Board Options Exchange Volatility Index reflects a market estimate of future volatility, based on the weighted average of the implied volatilities for a wide range of strikes.

6 DAILY MARKETS BRIEF I ECONOMIC DATA KEY ECONOMIC INDICATORS Country Event Date China CPI YoY 8/9/2018 4:30 Eurozone CPI YoY 8/17/ :00 France Markit France Manufacturing PMI 8/1/ :50 France Markit France Manufacturing PMI 8/23/ :00 Germany IFO Business Climate 8/27/ :00 Germany ZEW Survey Expectations 8/14/ :00 Italy Manufacturing Confidence 8/28/ :00 Japan Industrial Production MoM 8/14/2018 7:30 Japan Industrial Production MoM 8/31/2018 2:50 Japan Jobless Rate 8/31/2018 2:30 Japan GDP SA QoQ 8/10/2018 2:50 Japan GDP Annualized SA QoQ 8/10/2018 2:50 United Kingdom Bank of England Bank Rate 8/2/ :00 United Kingdom GDP QoQ 8/10/ :30 United Kingdom GDP YoY 8/10/ :30 United Kingdom CPI YoY 8/15/ :30 United States Change in Nonfarm Payrolls 8/3/ :30 United States Initial Jobless Claims 8/2/ :30 United States Initial Jobless Claims 8/9/ :30 United States Initial Jobless Claims 8/16/ :30 United States Initial Jobless Claims 8/23/ :30 United States Initial Jobless Claims 8/30/ :30 United States FOMC Rate Decision (Upper Bound) 8/1/ :00 United States GDP Annualized QoQ 8/29/ :30 United States CPI MoM 8/10/ :30 Banque BEMO sal Wealth & Investment Management research@bemobank.com Head Office - Private and Corporate Banking 96 Pasteur Building, Pasteur Street, Medawar Area, P.O. Box: , Beirut - Lebanon Tel: Fax: General Management 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.