EFTA01457976.pdf

Asia: Chinese equities In China, margin trading for the Shanghai and Shenzhen Composites has fallen to around RMB1.4tn vs. RMB2.1tn at its peak EMEA: European sentiment data as leverage continues to be flushed out of A slight upwards move in European sentiment the system. At the same time we in July — as measured by the European understand that government-linked Commission's Business and Consumer Survey authorities are stabilizing the market — index — provides further evidence that the through share purchases. 12% of A-share region is still slowly getting back on its feet. market cap still remains suspended, down from 34% at its peak. Mainland stock The Eurozone Economic Sentiment Indicator markets still remain fragile, which continues (ESI) rose by 0.5 points to 104, its highest level to place pressure on offshore-listed H- since June 2011. Sentiment improved in the shares. We still expect volatility to continue industrial and, in particular, services sectors. throughout the summer. The rise in the export indicators index was encouraging although this has not yet been The reality is that Chinese interest rates are accompanied by a similarly strong pick-up in still very high in real terms and the cost of actual exports. funding needs to come down. This should slowly happen, as reserve requirement The ESI for the European Union as a whole ratios (RRR) and interest rates are lowered. rose by a larger 1.1 points to 106.6 due to But this cannot happen very quickly as it higher confidence in the U.K. and Poland. could put pressure on the currency through capital outflows. So we would suggest that Consumer —as opposed to business — investors take a medium term view, invest confidence however fell to its lowest level since into real franchises with sustainable the start of 2015. It is difficult to know whether operations. would look at fundamentals first this was largely due to the Greek crisis, which but also be mindful of stocks that could was very much in the headlines when the benefit from policy changes, particularly survey was made. Another big question is those related to the 'one belt, one road' whether the boost to consumption from lower (OBOR) development strategy, water, oil prices is now starting to decline. intemet, environment, travel, communications, transportation networks and new energy. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Deutsche Asset Investments come with risk. The value of an investment can fall as well as rise and 2 a Wealth Management you might not get back the amount originally invested at any point in time. Your July 31. 2015 capital may be at risk. CONFIDENTIAL — PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0117714 CONFIDENTIAL SDNY_GM_00263898 EFTA01457976