EFTA01797261.pdf

From: Brad Wechsler Sent: Tuesday, July 28, 2015 1:27 PM To: Paul Barrett; Jeffrey Epstein Subject: Re: Short EUR / Long GBP Paul-be back to you soon. Jeffrey, shld u and I speak briefly. Sent from my Verizon Wireless BlackBerry From: "Barrett, Paul S' Date: Tue, 28 Jul 2015 13:13:25 +0000 To: 'Brad Wechsler' ; 'Jeffrey Epst=in [email protected]@gmail.com> Cc: Barrett Team ;'Richard Jos=in' Subject: RE: Short EUR / Long GBP Brad=/p> Given that we don't =et have an ISDA on file we should consider using a structured note to impl=ment the EURGBP trade. Nicole had sent through pricing yesterday. I would =ecommend $500K-S1MM. Paul=/p> =span style="font-size:8.0pt;font-family:"Verdana","sans- s=rif";colorl5F5F5F"> NOT =N OFFICIAL CONFIRMATION: For informational=purposes only. This report does not represent an official account of=the holdings, balances, or transactions made in your account and is being =rovided at your request. Please refer to your monthly account statement for the official record of all of your a=count activities. For question, please call your J.P. Morgan represe=tative. EFTA_R1_00134171 EFTA01797261 In discussion of options and other strategies, results and risks =re based solely on hypothetical examples cited; actual results and risks w=ll vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related=products in general, as well as the products or strategies discussed herei= are suitable to their needs. In actual transactions, the client's count=rparty for OTC derivatives applications is JPMorgan Chase Bank, N.A., and affiliates. For a copy of the "Charact=ristics and Risks of Standardized Options" booklet, please contact your =PMorgan Advisor. This=email is confidential and subject to important disclaimers and conditions =ncluding on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, con=identiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.com/pages/disclo=ures/email <http://www=jpmorgan.com/pages/disclosures/email> . From: Wolf, Ni=ole Sent: Monday, July 27, 2015 3:05 PM To: Brad Wechsler Cc: Barrett Team Subject: Short EUR / Long GBP Hi Brad, Here is our latest piece on short EUR vs. long GBP. = will follow-up with some structure pricing that we like. Nicole </=:p> Trade Idea: S=ort Euro / Sterling (i.e. Long GBP vs Short Euro) <=span> Recent comm=nts from several Bank of England (BoE) members suggest the time for rate h=kes in the UK is approaching. As a result, the market is repricing t=e timing of the first rate hike from mid-2016 to O12016. o =931n the current circumstances there is no need to wait to raise rates bec=use of a risk management approach and run the risk of inflation overshooti=g target.... In my view, the decision as to when to start such a process of adjustment will likely come into sharper r=lief around the turn of this year." - Mark Carney (BoE Governor), 16 July 2015 2 EFTA_R1_00134172 EFTA01797262 • Additionall=, the U.K. economy is improving rapidly (see charts below). o Retail sale= are growing at of 4.8%yoy, 3mma — the strongest run rate since 2004. o Wage growth=has finally started to pick up with private sector wages up 3.8%yoy, 3mma,=up from sub-2% in late 2014 and the strongest pace since 2008.<=o:p> o Inflation i= low at 0.0%yoy, largely due to the oil price drag, but is expected to pic= up significantly into year-end as the base effect fades out and growth dr=gs prices higher. Consensus forecasts are for a 1.6% rate by end 2016 and 1.9% by end 2017. • At the same=time, the ECB is in the beginning of a mandated period of suppressed inter=st rates and quantitative easing which is on plan to last through Septembe= 2016, if not extended thereafter. <=pan style="text-decoration:none"> ` Given the m=netary policy divergence between the ECB (extremely loose) and the BoE (pr=paring for tightening), GIO expects GBP to appreciate against the Euro ove= the next 6 months by up to 5%. Risks to the Tra=e * Although th= BoE is approaching rate hikes, strong data over the next few months is ne=ded to corroborate their move. Notably, if CPI prints surprise to the down=ide on August 18th and September 15th, the argument for BoE rate hikes and GBP strengt= will weaken. </=pan> • Some very i=fluential BoE members such as Andrew Haldane remain dovish and continue to=highlight the risks of moving too soon. To the extent that they can persua=e other members to refrain for a few months, the market may price out rate expectations back to mid-2016. </=pan> * A substanti=l GBP trade-weighted appreciation could depress imported prices and push o=t rate hikes. The trade- weighted GBP appreciated 8% in Q1 2015 leading som= BoE doves to express concerns. Source: JP Morgan a=d Bloomberg, July 2015 </=pan> This material is in=ended as a general market commentary, and not intended to be a forecast of=future events, a guarantee of future results or investment advice. The opi=ions expressed are those of GIO based on current market 3 EFTA_R1_00134173 EFTA01797263 conditions and may differ from those of other l.P. Morga= employees and affiliates, which are subject to change without notice.&nbs=; This information in no way constitutes J.P. Morgan Research and should n=t be treated as such. The views expressed may differ from those contained in J.P. Morgan research reports. The inves=ment products and services described herein may not be suitable for all cl=ents, you should speak to your financial representative before engaging in=any investment product or strategy. </van> Outlooks and pas= performance are not reliable indicators of future results. </=pan> Bank products and s=rvices, are offered by JPMorgan Chase Bank, N.A. and its affiliates. Secur=ties are offered by J.P. Morgan Securities LLC, member NYSE, FINRA and SIP=. 4=pan> INVESTMENT PRODUCTS= NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE =/p> &n=sp; NOT AN OFFICIAL CONFIRMATION: For informational p=rposes only. This report does not represent an official account of t=e holdings, balances, or transactions made in your account and is being pr=vided at your request. Please refer to your monthly account statement for the official record of all of your acco=nt activities. For question, please call your J.P. Morgan representa=ive. In discussion of options and other strategies, results and risks =re based solely on hypothetical examples cited; actual results and risks w=Il vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related=products in general, as well as the products or strategies discussed herei= are suitable to their needs. In actual transactions, the client's count=rparty for OTC derivatives applications is JPMorgan Chase Bank, N.A., and affiliates. For a copy of the "Charact=ristics and Risks of Standardized Options" booklet, please contact your =PMorgan Advisor. This=email is confidential and subject to important disclaimers and conditions =ncluding on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, con=identiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.com/pages/disclo=ures/email chttp://www=jpmorgan.com/pages/disclosures/email> . 4 EFTA_R1_00134174 EFTA01797264 The mate=ial on this page was prepared by an Associated Person with responsibilitie= for the marketing and sale of swaps and OTC financial derivatives. All qu=stions related to swaps and OTC financial derivatives referenced in these materials must be directed to Nicole Wolf<=:p> &nb=p; These in=icative prices are provided for information purposes only, do not represen= a commitment from JPMorgan to transact at those prices, or at any price, =n the future, and are intended solely for your use. These indicative prices were created as of a specific =ime and market condition and do not represent (i) the actual terms at whic= new transactions could be entered into, (ii) the actual terms at which ex=sting transactions could be liquidated or unwound, or (iii) the calculation or estimate of an amount that would b= payable following the early termination of transactions pursuant to any m=ster trading agreement to which we are parties. JPMorgan expressly d=sclaims any responsibility for (i) the accuracy of the models or estimates used in deriving the prices, =(ii) any errors or omissions in computing or disseminating the prices, and=nbsp; (iii) any uses to which the prices are put. The indicative pri=es do not take into account any specific ISDA credit terms, client credit ratings or credit reserves or charges that mig=t be relevant to a dealer negotiating a firm pricing level. Note tha= the transaction that is the subject of these indicative prices does not h=ve JPMorganChase credit approval. This document is not intended as investment or other advice or as a recommendat=on that you, any of your affiliates or any other person participate in any=transaction. It does not generally constitute an offer to buy or sel=, or a solicitation of an offer to buy or sell any security or financial instrument. =/p> </apan> This email is c=nfidential and subject to important disclaimers and conditions including o= offers for the purchase or sale of securities, accuracy and completeness =f information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.com/pages/disclosures/email 5 EFTA_R1_00134175 EFTA01797265