Morning Update. Market Highlights 18/06/2018. Investment Strategy & Advisory Management

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1 Market Highlights Stocks slip on trade war fears US equities declined on Friday weighed by escalating concerns over trade tariffs between the US and its major trading partners and falling energy prices. The Dow Jones Index decreased,4% to 5.9, the S&P 5 Index fell,% to.78, with energy and utilities the worst performing sectors, while the Nasdaq dropped,9% to close at European markets tracked Wall Street lower as sentiment soured throughout the session. The DAX retreated,74% to., the CAC lost,48% to 5.5, while the FTSE dumped,7% to 7.64, hit by declines in mining stocks. In Asia this morning the Nikkei is in negative territory, down,8% at.66, while the Shanghai Composite Index is closed in observance of the Dragon Boat Festival holiday. Treasuries gain in flight to safety Bond markets strengthened at the back end of the week causing yields to fall across the curve as investors rotated out of risk assets and into fixed income. The yield on the s dropped bps to,5%, the yield on the benchmark -yr Treasury fell bps to,9%, while the -yr yield decreased bps to,%. The spread between the US s and s remained at 7bps, meanwhile the spread between the US -yr Treasury and the German -yr bond ( Bund ) tightened to 5bps, as the yield on the -yr Bund settled at,4%. The itraxx Europe Crossover Index (most liquid subinvestment grade European Corporates) is at 94bps. Investment Strategy & Advisory Management Tasos Hadjinicolaou, Manager Tel:85 tasos.hadjinicolaou@bankofcyprus.com Dr Marios Soupashis, Senior Officer Tel:848 marios.soupashis@bankofcyprus.com Achilleas Petrides, Officer Tel:856 achilleas.petrides@bankofcyprus.com Dollar consolidates The US dollar consolidated its gains made last week in Friday s session, supported by risks emanating from the renewed trade war and political turmoil within Angela Merkel s coalition government. EUR/USD has settled around,6, USD/JPY is at,5 while the dollar index (index against a basket of six major currencies) is just below 95. Sterling is rangebound ahead of ongoing Brexit talks this week and the Bank of England monetary policy announcement. GBP/USD is trading at,7, while EUR/GBP remains at,87. Oil dumps on China threat, Gold drops Crude oil (WTI) prices fell to their lowest point in -months, below $64 per barrel following threats by China to slap duties on American crude imports. Meanwhile gold prices fell sharply towards $.8 per ounce, with traders citing US dollar strength, the hawkish stance of the Fed, and weak physical demand as the cause for Friday s slump. Key events/data today: EU Italian Trade Balance, FOMC Members Bostic & Williams Speak, ECB President Draghi Speaks Major Performances Equity Last Price d Chg % 5d Chg % YTD Chg % 5 HIGH 5 LOW 5Y CHG S&P 5 779,7 -,%,%,97% 87,9 45,7 68,% DAX,6 -,74%,9%,7% 596,9 76,6 6,7% FTSE 76,9 -,7% -,6% -,7% 79,5 6866,9,% Shanghai,9 -,7% -,48% -8,6% 587, 8,7 9,9% Nikkei 66,4 -,8% -,6% -,45% 49, 99,5 74,% Bonds Last Yld d Chg Bps YTD Chg Bps 5 HIGH 5 LOW US Y Yield,9-5,, German Y Yield,4-8 -,8,9 Currencies Last Price d Chg % 5d Chg % YTD Chg % 5 HIGH 5 LOW 5Y CHG EURUSD,59 -,5% -,6% -,4%,555,9 -,4% USDJPY,5 -,6%,4% -,% 4,7 4,56 5,9% GBPUSD,7 -,8% -,8% -,8%,477,589-5,% Commodities Last Price d Chg % 5d Chg % YTD Chg % 5 HIGH 5 LOW 5Y CHG Gold Spot $/Oz 79,7,8% -,58% -,75% 66, 4,9-6,4% Crude Oil WTI 6,9 -,86% -,4% 6,84% 7,9 45, -,4%

2 Morning Update Equity Markets Major Indices Performance S&P 5 Index Index Last Price D Chg % YTD Chg % 5 YR Chg % 5 HIGH 5 LOW S&P 5 INDEX 779,7 -,%,97% 68% 87,9 45,7 DOW JONES INDUS. AVG 59,5 -,4%,5% 64% 666,7 97, NASDAQ COMPOSITE INDEX 7746,4 -,9%,% % 7768,6 68, 8 DAX INDEX,6 -,74%,7% 6% 596,9 76,6 CAC 4 INDEX 55,9 -,48%,56% 45% 5657,4 4995, FTSE INDEX 76,9 -,7% -,7% % 79,5 6866,9 6 4 MSCI WORLD 4, -,7%,46% 44% 49,7 95, SWISS MARKET INDEX 864,6 -,55% -7,88% % 966,4 8454, SHANGHAI SE COMPOSITE,9 -,7% -8,6% 4% 587, 8,7 NIKKEI 5 66,4 -,8% -,45% 74% 49, 99,5 HANG SENG INDEX 9,5 -,4%,% 4% 484, 599,9 8 MOEX Russia Index 7,5 -,7% 6,6% 7% 77, 774,6 Athex Composite Share Pr 76,5 -,96% -4,85% -5% 895,6 7, 6 GENERAL MARKET INDEX CS 68,6 -,7% -,% -9% 78, 65, Top S&P 5 Movers VIX Index Company Last Price D Chg % 5d Chg % YTD Chg % Volume DISCOVERY IN 7,7 6,6% 8,%,4% DISCOVERY IN 5, 4,8% 6,% 9,6% HARLEY-DAVID 45,94,9% 7,7% -9,7%.9.46 DAVITA INC 7,47,4%,4%,7%.4.86 ADVANCE AUTO 7,6,7% 4,% 7,6% 6.4 COGNIZANT TE 8,7,7% 4,7%,6% ALLIANCE DAT,,6% 4,5% -8,%.5 NEKTAR THERA 57,86,6% 6,9% -,%.8.88 MICHAEL KORS 67,5,5% 4,4% 7,% FRANKLIN RES,96,4% -,% -4,8% Bank of Cyprus LSE & CSE Info BOC London BOC Cyprus Last Price,89,87 Day chg % -,% -,% 5 Day chg % -4,6% -,6% Since Listing -4,7% -4,9% 5 Week High,4,5 5 Week Low,4,46 Daily Turnover Volume in Shares Market Cap Shares Out. Mil 446, 446, Tier Capital Note BOC Tier Bond ISIN XS Bid Price 94,9 Ask Price 95,74 Yield to Call (Mid),95% Currency EUR Coupon 9,5% Maturity 9//7 Next Call Date 9// Min Piece Amt Outstanding 5MM

3 Mar-6 Sep-6 Mar-7 Sep-7 Mar-8 Fixed Income Government Bonds Major Government Yields US Yr & German Yr Yields CNTRY YR 5 YR YR YR USA,5%,78%,9%,% UK,7%,5%,%,77% GERMANY -,64% -,%,4%,6% FRANCE -,58% -,%,7%,65% ITALY,6%,5%,59%,48% SPAIN -,6%,4%,9%,47% PORTUGAL -,9%,65%,78%,85% IRELAND -,55%,88% GREECE 4,4% JAPAN -,4% -,%,%,7% RUSSIA 6,99% 7,% 7,7% US Yield Curve,5 US YR German YR,5 %,5,5 -,5 US Yr & German Yr Spread,5,5 %,5,5 Current Yields Year Ago Years,5 %,5,5 Fixed Income Corporate Bonds Credit Default Swaps ITraxx Europe & ITraxx Crossover Name Last Price d d Chg bp YTD Chg bp 5Y Chg bp 5 HIGH 5 LOW US Investment Grade 6,48 -,9,5 -,5 69,5 45,4 US High Yield, -,5 4,9 n/a 7,9 9,57 Europe 65,84,, -4,5 77,5 4,6 Europe Crrossover 94,4 4, 6,8-49, 8,9 8,94 Japan 5,65, 6,6-57,7 5, 9,7 Asia ex japan 77,67,,6-57, 89,5 59, Europe Xover

4 Morning Update Oct-5 Fixed Income Cyprus Government Bonds Outstanding Cyprus Bonds Cyprus 4.5% 5 Bond Yield ISIN Last Price Yld Yld % d Chg bp Coupon Maturity XS887 4,6,% -, 4,75% 5/6/9 XS ,6,5% -,7 4,6% // XS7479 7,7,8% -,,88% 6/5/ XS ,87,% -,,75% 6/7/ XS ,67,45%,,75% 7/6/4 XS494 9,9,8%, 4,5% 4//5 % 4,5 4,5,5,5 Rating Moody's Fitch S&P Cyprus Ba BB+ BB+ Foreign Exchange Major Pairs /$ Pair Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW EURUSD,59 -,5% -,4% -,4%,555,9 EURGBP,876 -,% -,6%,4%,967,868 EURRUB 7,5 -,% 5,67% 7,87% 8, ,57 EURJPY 8, -,7% -5,%,% 7,5,66 EURCHF,5547 -,7% -,7% -6,5%,55,8 USDJPY,5 -,6% -,96% 5,89% 4,7 4,56 GBPUSD,7 -,8% -,8% -5,8%,477,589 USDCHF,9967 -,9%,% 8,%,57,988 AUDUSD,7444,% -4,67% -,5%,86,74 USDCNY 6,487,58% -,5% 5,% 6,844 6,4 USDRUB 6,69,87% 9,6% 98,8% 65,96 55,5577 USDCAD,8 -,4% 4,84% 9,6%,48,6,5,,5,,5 / $ Index,95,9,85,8,75,7,

5 Commodities Commodities Table Crude Oil Spot ($ per barrel) Energy Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW Crude Oil 6,9 -,86% 5,68% -5,4% 7,8 4,5 Brent Oil 7,77 -,9% 8,8% -,6% 8,5 44,5 Casoline -,65%,7% -,9% 8,55 9,55 Heating Oil 7, -,7% -,6% -,%,69 5,4 Natural Gas,5,4%,78% -,8%,66,5 Metals Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW Gold 79,9,% -,77% -6,4% 66,8 4,68 Silver 6,5 -,8% -,46% -,8% 8, 5,9 Platinum 99,5 -,% -6,9% 9,55% 9,68 89,4 Copper, -,7% -5,7% -,7%, 5,95 Agriculture Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW Corn 59,75 -,4%,57% -46,57% 4,5 8,5 Soybeans 98,5,% -4,54% -9,86% 7 9,5 Coffee 5, -,4% -8,7% -5,77% 4,75, Gold Spot ($ per oz) Alternatives Major Hedge Fund Strategies Index Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW Macro 54,7,76% -,9% 4,4% 69,57 46,67 Macro CTA 48,46,58% -,%,69%,9,47 Event Driven 6,6 -,49% -,9% 7,% 7,4 58,48 Market Neutral,7 -,8%,6% 6,9%,7 99,8 Global Hedge Fund 7,97 -,4% -,% 7,% 5,98,8 Equity Hedge 9,67 -,7%,65% 7,5% 8,9 9,99 Credit 6, -,5%,5% 4,97% 77,96,85 Convertible Arb 8,45,%,78% 5,% 8,5 769,7 M&A 84,5,9% -,5% 9,84% 857,6 79,9 Absolute Return 74,8,%,8%,6% 75,64 4,5 Global Hedge Fund Index

6 Shipping Shipping Indices Baltic Dry Index & Baltic Dirty Index Index Last Price d d Chg % YTD Chg % 5y Chg % 5 HIGH 5 LOW Baltic Dry 445,84% 5,78% 5,% 74 8 Handysize 59,7% -5,% 9,% Clean Tanker 55 -,58% -8,47% -9,% Dirty tanker 746 -,84% -9,79% 7,96% 9 64 Panamax 495 -,% 7,7% 67,6% Baltic Dry Dirty Tanker Supramax 9,8% IMPORTANT DISCLOSURES AND DISCLAIMER Bank of Cyprus Group, Investment Strategy & Advisory Management Tel: , 856, 848 Fax Postal Address: P.O. Box 47, Nicosia 599, Cyprus This report is intended for informative purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy, any security. It is recommended that investors independently evaluate particular strategies and consult a financial adviser before proceeding to the purchase or sale of any security or other financial instrument. Note also that past performance may not be a reliable indicator of future results, while financial forecasts may not be a reliable indicator of future performance. Investors may not get back the original amount invested. This report has been compiled based on information obtained from sources we believe to be reliable, but their accuracy, completeness, or correctness cannot be guaranteed. The opinions contained within the report are based upon publicly available information at the time of publication and are subject to change without notice. The use of forward looking wording such as expect, estimate, forecast, involve known and unknown risks and uncertainties which may mean that the actual results may differ from any future results implied by the forward looking wording included in the relevant statements. Bank of Cyprus and/ or its affiliated companies or persons connected with it and/or directors and/or employees and/or clients may have a position, or engage in transactions in any of the securities mentioned herein or any related investment, or solicit business from any company mentioned in this report. More details on the conflicts of interest policy can be found in the MiFID Pre-Contractual Information Package 6