Market Insights End of the Year Trading Market Overview/Analysis. A technical overview of the holiday period.

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1 Market Insights 2018 End of the Year Trading Market Overview/Analysis By Alistair Schultz, Dealing Operations A technical overview of the holiday period. Markets have been relatively stable throughout the Christmas and New Years holiday period, with most markets trading in a phase of consolidation. This activity is not unexpected for the time of year and is regularly year after year. The below image is of the AUDUSD: Price has been trading in a consolidated range since late November 2018, as can be seen price has been trading within the same channel but in an upgoing trend. At the end of last week, a Double Top Pattern was presented which resulted in an exact 100% price movement.

2 The Chart below shows the USDJPY: Price on the USDJPY has again been flat in action post the New Years news spike, we have seen rangebound behaviour continuing with little in the way of patterns to help discern a direction. Trading in the range bound behaviour, can be difficult so use caution in any markets that resemble the above. Several currency markets have been operating in the same fashion as the above charts, either flat and unspectacular or with simple movement. Crypto markets have been affected by the price action in Bitcoin, which is not an anomaly, moves have been rapid with minimal price action in between, especially in the last year.

3 The Sleeping Silver Giant By Bobby Winters, Head of Institutional Sales, Asia The start to 2019 has been nothing less than remarkable regarding the major moves across equities, commodities, FX and fixed income. Whether Brexit, Trade War jitters, Italian Banks, US government shutdown, or the Fed, there is an abundance of market event risk that could change the global economic outlook for Given all the uncertainty and potential downside risks to the market, there is one trade which I believe takes all these factors into consideration and provides unique opportunity in the market. That trade is silver.

4 Silver Overview Silver has fallen from grace since the last major rally during the Great Financial Crisis. From mid-2011 to the end of 2015, silver lost over 60% of its value, to a low of Since then silver has been consolidating for the past 2 years into a descending triangle from a high of to the lows and support around Source: Zerohedge Gold/Silver Ratio The weekly chart above is split between the Gold/Silver Ratio (top) and a chart of XAG/USD (bottom). Over the past 20 years, when the Gold/Silver Ratio has risen above 80, we ve seen a strong rally in Silver in the subsequent months averaging over 7%. In late 2018 the Gold/Silver Ratio initially breached 80 and reached a high of on December 17 th. While correlation does not imply causation, this is one chart which traders should monitor closely.

5 May 2003 March 2004 September 2008 April 2011 February 2016 July 2016 November 2018 Present GoldSilver Ratio ?? Silver Price ?? % Change in Silver 43.60% % 42.80%?? Gold/Silver Ratio vs Price Movement in Silver The chart above shows the last 3 times the Gold/Silver Ratio reached 80 and silver s subsequent price after the Gold/Silver ratio reverted to more normalized levels. While most of the moves happened within the first 3 months, patient traders were rewarded exponentially, especially between 2008 to 2011.

6 More Dovish Fed Another major factor for silver is interest rates. Like gold, silver struggles when interest rates rise or are expected to rise. However, at the latest FOMC meeting, there were two significant points made which were bullish for silver. First, the fed dot plots have been revised down significantly as the median interest rate expectation for 2019 fell from 3.125% to 2.875%. Secondly, Fed Chairman Powell comments were much more dovish, noting that the Fed will be flexible with all its monetary policy tools, including the important balance sheet. Summary Gold/Silver Ratio currently above 80 Silver trading near decade lows Less hawkish Fed and lower expectations for rate hikes in 2019 Large geopolitical and market event risks may push traders towards safe haven assets: Brexit, Trade Wars, Italian Banks, US Government Shutdown. The Trade Long XAG/USD between 14 to Stop Loss at st Profit Target 17 2 nd Profit Target 19.50

7 The United Kingdom Could be Looking at a New Prime Minister as Early as Wednesday By Alistair Schultz, Dealing Operations A Vote is meant to be occurring on Tuesday on Prime Minister Theresa May, the unfavourable Brexit deal, naturally pending with no further delays. According to polls, PM Mays deal is expected to receive a no vote. Some economists and politicians are looking at the way PM May has conducted herself and the consistent calls for voting and delays as strategy. The strategy being implied is to push the EU to offer more concessions, failing this to run the clock out till B-day, giving MPs a choice between PM Mays deal or a no deal Brexit scenario. Another possibility exists where without Theresa May as Prime Minister, MPs have passed amendments to take control of the Brexit process, including a no deal Brexit requiring parliament s approval. News crossed the wire that a no confidence vote may be scheduled for as early as Tuesday, and that a general election after could be a possibility.