EFTA01458619.pdf

26 September 2015 FX Forecasts and Valuations: Don't throw in the towel FX Behavioral and Fundamental Equilibrium Exchange Rates (BEER and FEER)' 'Figure 1: USD-cross BEER and FEER valuations. TVVI PPP valuations 30 • 26 26 ■ 21 22 19 19 20 15 in 13 13 1° 11 33 24 1 10 7 7 4 8 10 10 14 6 0 . ••• 0 -10 - • -5 -8 -8 -$ -10 -20 -30 , ■ BEER -24 -25 -25 -26 -26 .27 -28 -28 -29 -31 -40 • FEER 47 47 49 -39 •REER vs 10y average -42 O 9 n a. a cc Fa ok i2E5B 0 4T Fcz 2>- "E lce 2 c%>= z a E co a. >- cc 0 u SOUP.' DI FX Romeo% Oseeenem, licanbey NwwwelLI [Figure 2. EURIUSD is cheap vs. BEER FV Figure 3: USDIJPY is above fair value vs. BEER FV 1.8 1 EUR M.0' BEER Fair Value in BEER Fair Value —Spot 1.6 I —Spot 250.0 1.4 200.0 1.2 150.0 • 1.0 • 0.8 1000 0.6 I 50.0 80 83 86 89 92 95 98 01 04 07 10 1.3 15 80 83 86 89 92 95 98 01 04 07 10 13 15 Sant DO FXSisiven Sown FXAnal ..... Page 16 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED R CRIA1 P. 6(e) DB-SDNY-0118614 CONFIDENTIAL SDNY_GM_00264798 EFTA01458619