WEEKLY INSIGHT. November ETF Creations/Redemptions (AuM%) Short-lived optimism from the G20. December 10, 2018

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1 WEEKLY INSIGHT Short-lived optimism from the G20 December 10, 2018 Enthusiasm brought by the G20 summit was short-lived as trade uncertainty returned along with worries about a flattening yield curve weighed on sentiment. Risk aversion returned on Tuesday as Trump issued a series of tweets questioning whether a real deal was possible with China and reiterating his strong believes in tariffs shortly after affirming China s willingness to conclude a deal. Further complication surfaced after Canadian officials arrested Wanzhou Meng, CFO of Huawei and daughter of the founder, at the request of the U.S. Department of Justice on suspicion of violating Iranian sanctions. While the arrest was seen as a shocking event, Huawei had been under the scrutiny of the U.S. for national security concerns for the past few years and have pressured its allies to not engage in business with the company. The other key matter that worried investors was the 3-year rates have exceeded the 5 year rates on the U.S. Treasury curve as an inverted yield curve is known to be a traditional bear-market signal. Nonetheless, the more reliable measure of the 3-month short term rates against the 10-year long term rates did not invert but was trading at its tightest level since In addition, major oil producers have agreed to cut production by more than one million barrels per day to support energy prices beginning in January and last for six months. The US S&P 500, Euro Stoxx 50 and Nikkei 225 ended the week -4.60% w/w, -2.93% w/w and -2.23% w/w, respectively. The yield on the 10-year Treasury tightened to 2.84% along with a stronger Japanese yen traded at against the US dollar on Monday morning during Asian trading hours. U.S. nonfarm payrolls added 155,000 new jobs in November below forecast of 198,000 but was the 98th consecutive month of growth in U.S. hiring, the longest streak of growth since the record began. The employment rate remain at 3.7% and average hourly earnings rose at 3.1% y/y, a sign that inflationary pressures remain soft despite the historically low unemployment rate. The British Parliament will vote on the U.K. withdrawal agreement with the European Union on Tuesday. It is highly unlikely the vote will be pass as Prime Minister Theresa May encountered pressure from both the remain and leave camps. In addition, a senior legal adviser to the European Court of Justice (ECJ) have indicated, in theory, the U.K. could revoke Article 50 independently without the permission of every other EU member state. Hence, the results of the vote can determine whether a second Brexit referendum is possible. French President Macron cancelled his planned hikes in fuel taxes that were scheduled in 2019 due to the pressure from the nationwide yellow vests protest. The protest, currently in its third week, is the worst riots in Paris for the past 50 years that began over rising fuel prices and resulted in a movement over social injustice with the Protesters calling for a return of the French wealth tax. The November Nikkei Japan Manufacturing Purchasing Managers Index (PMI) is at its weakest level since August 2017 due to falling demand from Europe and China. Looking forward, U.K. House of Commons will vote on the EU divorce deal on Tuesday. CHART OF THE WEEK What ETFs Say About Markets Given the always higher stake of ETFs in the portfolios, their net flows is more than ever a good indicator of investor s positioning. After light inflows in October, US and Europe listed ETFs posted $48bn new assets in November, the highest level in almost a year. On equities, the US (+$8.1bn) continued to be the prefered area, followed by Emerging markets (+$6.6bn). The exit from Europe is in line with the previous months (-$2.4bn) and brings the total net outflows to $19.2bn over the last 12 months. In the fixed income space, governement bonds posted an astonishing +$9.5bn, the highest level in almost 3 years. EM bonds also benefited from inflows in line with the previous months (+$0.8bn). In contrast, the HY segment suffered from significant outflows. Finally, Gold did not record as much as October, but still remain in positive territory with +$0.7bn net creations. November ETF Creations/Redemptions (AuM%) EM equities EM bonds US equities Gold IG corporate Inflation Japan equities European equities HY corporate -1.8% -1.8% -1.9% -1.2% 0.0% 0.7% 0.9% 1.6% 3.1% 7.1% Source: CBH, SG, Bloomberg 1

2 EUROPE MSCI EUROPE % -7.1% -11.0% 13 STOXX % -7.6% -11.2% 13 STOXX 50 3, % -7.1% -12.7% 13 CAC 40 4, % -8.4% -9.4% 13 DAX 10, % -9.8% -16.5% 12 FTSE 100 6, % -6.9% -11.8% 12 IBEX 35 8, % -3.9% -12.2% 12 MIB 18, % -8.3% -14.2% 10 PSI 20 4, % -7.6% -10.2% 14 SMI 8, % -1.2% -6.8% 16 MSCI EUROPE 1W 1M 3M YTD Est. P/E Cons. Disc. -2.6% -6.7% -9.8% -13.9% 11 Cons.Staples -2.0% -3.0% -3.4% -7.7% 18 Energy -1.5% -6.9% -5.6% -1.3% 11 Financials -4.8% -7.1% -9.5% -20.2% 10 Health Care -4.2% -3.4% -2.3% -0.7% 16 Industrials -4.8% -6.4% -12.3% -13.7% 15 Inf. Technology -3.4% -7.5% -12.7% -6.2% 20 Materials -2.9% -10.1% -10.1% -16.3% 11 Telecom Serv. -3.4% 2.6% 6.5% -11.2% 15 Utility -0.5% -1.1% 0.6% -1.2% 14 IT Industrial Production MoM Oct -0.3% 10-Dec18 Markit France Manufacturing index Nov F 50.7% 50.8% UK Industrial Production MoM Oct 0.1% 10-Dec18 Markit Eurozone Manufacturing index Nov F GE Expectation of Economic Grow th Dec -25.0B 11-Dec18 Sw itzerland inflation YoY Nov 1.0% 0.9% UK Unemployment Monthly Change Nov [20.2K] 11-Dec18 Markit Eurozone Composite index Nov F FR CPI YoY Nov F 1.9% 13-Dec18 Euro Area GDP 3Q F 1.7% 1.6% GE CPI YoY Nov F 2.3% 13-Dec18 Germany Industrial Production Oct 2.0% 1.6% EU GE CH UK 2Y -0.6% 0.1% 0.2% -0.3% 10Y 0.2% 0.3% 0.5% 0.7% 2Y -0.6% 0.0% 0.0% -0.4% 10Y 0.2% 0.4% 1.1% 2.6% 2Y -0.8% -0.1% -0.1% -0.8% 10Y -0.2% 0.4% 0.5% 0.4% 2Y 0.7% 0.1% 0.3% 0.3% 10Y 1.3% 0.6% 1.9% 1.5% Corporates 1-5Y* HY IG 5-10Y* 1.3% -0.1% -0.9% -1.6% 10+Y* Y* 4.9% -0.6% -3.5% -4.1% 5-10Y* Y* * quoted in EUR vs. EUR AUD % 2.9% -2.7% CHF % -0.7% 3.7% GBP % 0.0% -0.7% JPY % -0.1% 5.4% USD % 1.5% 5.5% BRL % 5.6% -10.9% MXN % -3.2% 2.4% NOK % 0.9% 1.7% RUB % 6.8% -8.5% SEK % 1.7% -4.5% ECB 13-Dec % 0.00% 0.00% 0.00% BOE 20-Dec % 0.75% 0.75% 0.90% SNB 13-Dec % -0.75% -0.75% -0.75% Euro GE FR IT ES PT UK CH GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

3 NORTH AMERICA MSCI NORTH AM. 2, % -8.5% -2.3% 16 S&P 500 2, % -8.3% -1.5% 16 DOW JONES 24, % -5.9% -1.3% 15 NASDAQ 6, % -11.8% 1.0% 20 TORONTO 14, % -8.0% -8.7% 14 MEXICAN IPC 41, % -14.5% -15.2% 14 MSCI USA 1W 1M 3M YTD Est. P/E Cons. Disc. -4.2% -7.2% -9.2% 4.9% 21 Cons.Staples -3.1% -3.9% 0.3% -5.0% 19 Energy -3.1% -9.3% -12.0% -11.4% 16 Financials -7.0% -8.0% -11.6% -10.9% 12 Health Care -4.7% -3.0% -2.2% 9.2% 17 Industrials -6.2% -7.6% -12.7% -10.7% 16 Inf. Technology -5.0% -9.1% -12.6% 2.3% 16 Materials -5.4% -8.2% -13.3% -15.7% 14 Telecom Serv. -4.0% -2.6% -0.9% -7.7% 16 Utility 1.4% 2.2% 4.5% 6.8% 18 US CPI MoM Nov 0.0% 12-Dec18 Mexico Consumer Confidence Index Nov [103.0] US Mortgage Market Index WoW Dec 7 [2.0%] 12-Dec18 US Initial Jobless Claims Dec K 231 MX Industrial Prod. Yearly Change Oct 1.7% 12-Dec18 US Durable Goods New Orders Oct F 0.0% -4.3% US Initial Jobless Claims Dec K 13-Dec18 Mexico inflation YoY Nov 0.0% 4.7% US Markit Manufacturing PMI Dec P Dec18 US Unemployment Rate Nov 3.7% 3.7% US Industrial Production MoM Nov 0.3% 14-Dec18 Michigan Consumer sentiment Dec P US CANADA 1-3Y 2.7% 0.2% - 0.7% - 1.0% - 3-5Y 2.7% 0.6% - 1.1% - 0.5% - 5-7Y 2.8% 0.9% - 1.4% - 0.2% Y 2.8% 1.3% 1.6% -0.5% 1-3Y 2.0% 0.3% - 0.8% - 1.5% - 3-5Y 2.0% 0.8% - 1.3% - 1.4% - 5-7Y 2.0% 1.1% - 1.8% - 1.6% Y 2.1% 1.6% 2.3% 1.9% Corporates 1-5Y* 3.7% 0.2% - 0.2% - 0.3% Y* 4.3% 0.6% %- -2.4%- 10+Y* 4.9% 1.6% -2.2% -7.9% IG HY 1-5Y* 7.3% -0.1%- -1.8%- 0.2% Y* Y* 7.8% -0.2% -4.5% -5.2% * quoted in USD vs. USD AUD % 1.3% -7.8% CHF % -2.3% -1.8% EUR % -1.4% -5.1% GBP % -1.5% -5.8% JPY % -1.5% 0.0% BRL % 3.8% -15.2% ILS % -3.6% -6.6% MXN % -4.7% -3.0% RUB % 5.2% -13.2% FED 19-Dec % 2.45% 2.70% 2.95% BOC 09-Jan % 1.75% 2.00% 2.20% BdeM 20-Dec % 8.00% 8.05% 7.90% US CA MXN GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

4 ASIA MSCI ASIA PACIFIC % -5.6% -13.0% 12 NIKKEI , % -2.8% -4.8% 15 HANG SENG 26, % -3.4% -12.9% 11 SHANGAI 2, % -3.6% -21.2% 11 SENSEX 35, % -7.1% 4.7% 20 KOSPI 2, % -9.0% -15.9% 9 S&P/ASX 200 5, % -7.5% -6.3% 14 MSCI ASIA-PAC 1W 1M 3M YTD Est. P/E Cons. Disc. -1.6% -1.6% -7.5% -18.0% 14 Cons.Staples 0.4% 1.8% -1.9% -3.9% 23 Energy -2.3% -5.6% -9.1% -6.2% 10 Financials -2.2% -2.7% -3.6% -14.1% 10 Health Care -2.7% -3.3% -8.8% -0.6% 27 Industrials -1.7% 0.6% -3.3% -11.9% 12 Inf. Technology -2.5% -2.8% -9.9% -18.7% 10 Materials -1.9% -4.4% -7.4% -18.2% 10 Telecom Serv. -1.4% 3.4% -4.8% -8.4% 18 Utility 1.0% 4.3% 1.4% 2.6% 14 JN GDP QoQ 3Q F -0.5% 10-Dec18 Nikkei Japan Manufacturing index Nov F [51.8%] 5.9% AU Home Loans MoM Oct -0.4% 10-Dec18 Australia Cash Rate Target Dec 4 1.5% 1.5% IN Industrial Production YoY Oct [4.5%] 12-Dec18 Reserve Bank of India Repurcha Dec 5 6.5% 6.5% China industrial production YoY Nov 5.9% 14-Dec18 Australia GDP YoY 3Q 3.3% 2.8% JN Industrial Production MoM Oct F [2.9%] 14-Dec18 China Trade balance Nov 36.0B 44.8B JN Nikkei Manufacturing PMI Dec P [52.2%] 14-Dec18 China inflation YoY Nov 2.4% 2.2% JAPAN AUSTRALIA 1-3Y -0.2% 0.0% 0.1% -0.1% 3-5Y -0.1% 0.1% 0.2% 0.1% 5-7Y -0.1% 0.2% 0.5% 0.3% 7-10Y 0.0% 0.3% 0.7% 0.5% 1-3Y 1.9% 0.2% 0.6% 2.2% 3-5Y 2.0% 0.6% 0.8% 3.4% 5-7Y 2.2% 0.9% 1.2% 4.1% 7-10Y 2.4% 1.1% 1.5% 4.3% Corporates 1-5Y* 0.3% 0.1% 0.3% 0.4% IG 5-10Y* Y* * quoted in JPY vs. USD AUD % 1.3% -7.8% HKD % 0.4% 0.0% JPY % -1.5% 0.0% NZD % 5.1% -3.3% SGD % 0.6% -2.5% CNY % -0.4% -5.3% IDR 14, % 2.3% -6.4% INR % 1.3% -9.8% KRW 1, % 0.3% -4.7% MYR % -0.5% -2.9% RBA 05-Feb % 1.50% 1.50% 1.55% BOJ 20-Dec % -0.10% -0.10% 0.00% RBNZ 13-Feb % 1.75% 1.75% 1.75% RBIN 06-Feb % 6.55% 6.65% 6.75% PBOC % 4.35% 4.30% 4.30% CN JP IN AU NZ SK HK SI GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

5 EM & OTHER COUNTRIES MSCI EMERGING MKT % -4.1% -15.3% 12 MSCI EM LATAM 2, % 5.6% -8.4% 14 MSCI EAST EUROPE % 7.0% -3.4% 7 MSCI SOUTH AFRICA 1, % -8.0% -17.0% 14 TEL AVIV 25 1, % -2.4% 5.7% 12 RUSSIAN RTS 1, % 10.2% 0.3% 5 FTSE/JSE AFRICA 45, % -11.5% -14.3% 13 IBOVSPA BRAZIL 88, % 15.3% 15.3% 13 MSCI EM 1W 1M 3M YTD Est. P/E Cons. Disc. -3.1% -4.1% -9.8% -30.4% 19 Cons.Staples -0.9% -1.1% -3.7% -16.0% 24 Energy 0.0% -3.0% 1.9% 6.9% 8 Financials -1.3% -1.2% 2.6% -11.0% 9 Health Care -4.3% -5.7% -15.3% -18.5% 27 Industrials -0.4% 1.1% -0.8% -14.1% 12 Inf. Technology -2.3% -1.9% -9.9% -19.1% 9 Materials -0.3% -4.3% -7.5% -13.8% 10 Telecom Serv. -0.7% -0.6% -0.6% -17.1% 22 Utility 0.0% 2.0% 2.7% -6.9% 14 CH Unemployment Rate Nov 2.5% 10-Dec18 Markit Brazil Manufacturing PM Nov [51.1%] 52.7% TU Balance of Payments CA Balance Oct 2.5B 11-Dec18 Turkey inflation YOY % Nov 22.9% 21.6% SA Manufacturing Production MoM Oct [-1.0%] 11-Dec18 Markit Russia Composite index Nov [55.8] 55 RU Weekly $ International Reserves Dec 7 [462.1B] 13-Dec18 Colombia inflation YoY Nov 3.3% 3.3% BR Retail Sales MoM Oct 0.0% 13-Dec18 Russia inflation YoY Nov 3.8% 3.8% RU Key Rate Announcement Dec % 14-Dec18 Brazil inflation YoY Nov 0.0% 4.1% IL RU 2Y 0.5% 0.0% -0.1% -4.4% 10Y 2.4% 0.2% -1.0% - 2Y 8.0% 0.0% 0.6% -0.9% 10Y 8.8% 0.2% 3.4% -6.4% BZ CL 2Y 7.1% 0.3% 7.1% 11.5% 10Y 10.1% -0.7% 15.7% - 2Y 3.9% 0.1% 0.5% -2.5% 10Y 4.8% 0.4% 2.9% - vs. USD ARS % -1.1% -50.2% BRL % 3.8% -15.2% CLP % 2.3% -8.8% ILS % -3.6% -6.6% RUB % 5.2% -13.2% SA 2Y 6.1% 0.2% 3.7% 7.6% 10Y 9.0% -0.3% 2.8% 5.8% ZAR % 7.6% -12.6% BOI Field Not Appli 0.25% 0.10% 0.20% 0.35% BCB 12-Dec % 6.55% 6.70% 7.00% BCCE 01-Feb % 2.80% 3.05% 3.30% CBR 14-Dec % 7.60% 7.65% 7.65% SARB 17-Jan % 6.65% 6.80% 6.80% IL RU SA BZ AR CL GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

6 COMMODITIES LAST LAST 6M 1W 3M YTD COMMODITY INDEX % 1.1% -5.3% PRECIOUS METALS 1, % 4.4% -6.2% GOLD ($/oz.) 1, % 4.4% -4.1% SILVER ($/oz.) % 3.2% -13.7% PLATINUM ($/t oz.) % 0.9% -17.2% GOLD $/oz ENERGY % -0.9% 6.8% WTI CRUDE ($/bbl.) % -21.7% -8.9% BRENT CRUDE ($/bbl.) % -18.8% -2.1% NATURAL GAS ($/MMBtu) 4-2.7% 51.4% 45.7% INDUSTRIAL METALS % -0.6% -17.3% STEEL ($/T.) % -12.1% 14.8% ALUMINUM ($/mt) 1, % -3.9% -13.4% COPPER ($/lb.) % 4.4% -17.9% SOFT COMMODITIES % 2.4% -19.0% CORN ($/bu.) % 1.6% -2.0% WHEAT ($/bu.) % 0.0% 7.7% WTI CRUDE OIL $/bbl IMPRINT Publication date : All data as of :

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