Morning Briefing. Global Economic Trading Calendar. Markets. January 4 th 2016

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1 A Eurex publication focused on European financial markets, produced by MNl Morning Briefing January 4 th 2016 There is a full calendar of releases for the first full trading day of the New Year, with the Continental calendar dominating proceedings. The calendar gets underway from around 0800GMT, with the release of the French December car registrations data is published. At the same time, the first of the German state inflation numbers will be released, with the Saxony flash number for December published. Also due Monday are the euro area final manufacturing PMI numbers for December, starting with Spain at 0815GMT, Italy at 0845GMT, France at 0850GMT, Germany at 0855GMT and the combined euro area data at 0900GMT. Germany s Nov VDMA machine orders data will also be published at 0900GMT. At 0930GMT, the EMU January sentiment index will cross the wires. The UK releases are also due at 0930GMT, with both the Bank of England November Money & Credit report and the CIPS/Markit December manufacturing PMI data due to be published. German state CPI data for December will continue to cross the wires during the morning, with the flash pan-german data set for release at 1300GMT. At 1440GMT, the ECB will call for bids on Tuesday's 7-day MRO, before announcing the latest QE bond-buying data at 1450GMT. Across the Atlantic, the first US data release of 2016 comes at 1445GMT, when the December Markit final manufacturing PMI crosses the wire. At 1500GMT, the November construction spending and December I manufacturing index will be released. The I manufacturing index is expected to rise slightly to a reading of 49.1 in December after a sharp decline in November. Regional conditions indicated another weak month is possible. The flash Markit estimate declined to a reading of 51.3 in December from 52.8 in November. November construction spending is expected to post a 0.6% increase after rising by 1.0% in October. Housing starts rose sharply in the month, suggesting private residential construction posted another increase. Late Monday, at 2230GMT, San Francisco Fed Pres John Williams sits on panel discussing macro-prudential policies, in SF. Global Economic Trading Calendar Markets

2 Markets Eurex Published Zürich AG by Selnaustrasse Eurex Frankfurt 30AG ARBN Number Mergenthalerallee 61 Eurex Frankfurt 8021 Zurich AG ARBN Frankfurt Switzerland / Main FOREX: It's the first trading day of 2016 and risk aversion has been the overarching theme Germany in the Asia-Pacific morning, with commodity currencies like the aussie and New Zealand dollar bearing the brunt of the declines along with regional stocks. The US Eurex, January dollar and the yen have been the main beneficiaries of the move, said to be linked to a number of factors including rising geopolitical tensions and weaker-than-expected China Caixin PMI. Aussie-dollar earlier fell to a $ low, its lowest in almost 2 weeks, and last trades off that, at $ It started the day at $ today. Euro-dollar meanwhile, fell to a $ low but rebounded to last trade at $ vs the $ open this morning. Dollar-yen was last at Y119.78, in a Y to Y range today and down from the Y open. US INDEX FUTURES: After opening the first trading session of 2016 on a positive note, US stock index futures are trading lower as weaker-than-expected Chinese PMI data and a stronger USD/CNY fix have reversed the earlier 'risk-on' bid. The open saw US equity futures trade higher on the back of surging crude oil prices after Saudi Arabia and Iran cut off diplomatic ties, due to Saudi Arabia's execution of a prominent Shiite cleric over the weekend. Currently the Mar'16 e-mini S&P futures are trading down 6.50 points at 2,029.00, the Mar'16 e-mini Nasdaq futures are trading down points at 4,573.00, while the Mar'16 e-mini Dow futures are trading down 59 points at 17,282. US STOCKS CLOSE: US stocks pared losses in early afternoon action Thursday, but then saw late day selling into the close. As a reminder, while cash bonds closed at 2:00 pm ET Thursday, equities had a normal 4:00 pm ET close. The DJIA closed down 179 pts or 1.02% at 17,425.03, the Nasdaq Composite closed down 58 pts or 1.15% at 5, and the S&P 500 closed down 19 pts or 0.94% at 2, US TSY FUTURES: Treasury futures have continued to add to their CNY fix inspired gains after the weaker-than-expected Caixin PMI. The Caxin PMI printed at 48.2 in December, compared to estimates of a 48.9 rise and a 48.6 reading in November, with the data pointing to a further contraction in the Chinese economy. Ten-year futures added 2-ticks on the news to trade to fresh session highs. The data perhaps may have vindicated the much stronger-than-expected USD/CNY fix this morning, which started the rally in treasuries. After fixing at , the USD/CNY opened at compared to Thursday's close of (not Friday's fix as reported incorrectly in the previous bullet). Cash 10's are now unchanged on the session, to last trade back to Thursday's closing levels of %. JAPAN STOCKS: Japanese stocks have been hammered so far during the first session of Weaker than expected China PMI data and a stronger yen as a result of Mid-East tensions has seen major indexes post sharp losses during Monday's morning session. The Nikkei has closed for lunch down 2.59% or points at 18,541.41, while the Topix is down 2.05% or points at 1, GOLD: Spot gold was ending the year around $1,061.12/oz, after trading in a $1, to $1, range. The precious metal posted a low of $1, on Dec. 17, nearly revisiting the Dec low of $1,046.44, seen Dec. 3, which was the 2015 low also. The Dec high was $1,088.93, seen Dec. 4 and more recently, gold topped at $1, on Dec. 21. Gold would need to vault the Nov. 16 highs just under $1,100 for upward momentum to mount. After closing at $1, on Dec. 31, 2014, gold peaked at $1, and then tumbled in fits and starts over the course of 2015, bottoming at $1, Dec. 3. The increase in geo-political tensions in the mid-east has seen gold gain a small bid during Asian trade, with overall risk-aversion after a firm USD/CNY fix and poor China PMI data also lending gold support. Currently spot gold is last at up 4.10, with Asia seeing a /61.95 range. OIL: WTI crude oil futures for Feb'16 delivery last up $0.54 at $37.58 per barrel, after a $37.47 to $38.32 range in Asia today, with prices giving back some of the early gains seen on the escalating tensions between Iran and Saudi Arabia after the execution of popular Shia cleric, Nmir Baqr al-nmir over the weekend. Brent crude marched much higher than the WTI contract in response to the mid-east tensions, but this issue has been ongoing for years and also somewhat of a extension of the situation in Syria. The reality of a slowing world economy hit home instead with the release of the December Caixin Chinese PMI which dropped to 48.2 from 48.6, reversing some of the gains seen since September 2015's recent low of 47.2.

3 Technical Analysis BUND: (H16) Bears Focused On Region *RES 4: High Dec 11 *RES 3: High Dec 21 *RES 2: High Dec 28 *RES 1: High Dec 30 *PREVIOUS CLOSE: *SUP 1: Low Dec 17 *SUP 2: Rising weekly channel base *SUP 3: Low Dec 16 *SUP 4: Monthly Low Nov 9 *COMMENTARY: Bulls were unable to capitalise on last week s bounce from the 100-DMA with a reversal lower that confirmed bearish focus on layers of support where the weekly channel base, 21 & 55-WMA are noted. Bulls need a close above to ease immediate bearish pressure and above to initially target key resistance layers Bears look for a close below to add weight to their case. EUROSTOXX: Looking Heavy Again

4 *RES 4: DMA *RES 3: High Dec 7 *RES 2: DMA *RES 1: High Dec 29 *PREVIOUS CLOSE: *SUP 1: Low Dec 23 *SUP 2: Low Dec 22 *SUP 3: Bollinger band base *SUP 4: Low Dec 14 *COMMENTARY: Despite recent flirtations with the 21 & 100-DMAs bulls were unable to extend gains to test the 55-DMA with the relatively bearish close for 2015 leaving the index looking heavy. Bears continue to look for a close below to reconfirm a bearish bias with below needed to confirm focus on 2015 lows. Bulls need a close above the 55-DMA to initially target and then the region where the 200-DMA is located. Eurex Futures Market Close (Cob 30-Dec-2015)

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