EFTA01377506.pdf

Real Assets: Commodities — The weakness in commodities that has been 255 Index seen over the past year continued this week as 235 the Bloomberg Commodity Index fell to the lowest level since 2002. Additionally, as of July 215 28, the Index has fallen 9.5% month to date, 195 which is on pace to be the worst month since 175 • September 2011. 155 - — While the fall in energy, in particular crude oil 135 (-19.3% month-to-date. MTD), has led the 115 • weakness, it is interesting to note that this Index decline is not just a crude oil story as all five 95.: commodities sectors are negative MTD. — Precious metals have declined as gold (-7% te le teteette MTD) fell to the lowest level since 2010 as we Figure 3: Bloomberg Commodity Index at lowest level since 2002 move closer to the first Fed rate hike. Source: Bloomberg Finance LP, Deutsche AWM. Data as of July 30. 2015. — Additionally, as investors fear slowing global demand due to the slowdown in Chinese growth, industrial metals have also suffered. Copper (-8% MTD) fell to the lowest level since 2009 due to its sensitivity to China. Focus of the week — While commodities may stabilize in the near term Commodities: Recent weakness in from oversold levels, further US dollar strength commodities is likely to continue as the dollar could pose a continued headwind. strengthens ahead of the first Fed rate hike. he. Global FX Global FX: Diverging monetary policy should — The primary driver of the U.S. dollar going continue to drive dollar appreciation. forward will be the market's perception of the timing and magnitude of eventual Fed rate hikes. — With the much anticipated Q2 GDP coming in 105 Index relatively in line with expectations, the Fed can be optimistic that the acceleration is underway. — In the absence of a Fed meeting in August, any significant deviations from expectations in key economic data such as next week's payroll report (Friday), ISM report (Monday) and inflation data throughout the month could fuel 75 volatility. te / it ee re et — From a technical perspective the U.S. Dollar # oa. 1 of Index (DXY)* has been able to bounce above U.S. Dollar Index X50 Day Moving Avoiage the 50 day moving average which may suggest —200 Day Moving Average this could be a near term support level. — Due to this, we expect the U.S. dollar to Figure 4: U.S. Dollar Index (OXY)* Source: FactSet. Deutsche AWM appreciate to parity against the euro and to 130 Data as of July 30. 2015. against the Japanese yen by June 2016. • Weighted index against a basket of six other currencies. 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 Deutsche Asset be Incorrect. Past performance is not indicative of future returns. Investments come with 4 S. Wealth Management risk. The value of an investment can fall as well as rise and you might not get back the July 31. 2015 amount originally invested at any point In time. Your capital may be at risk. CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0074404 CONFIDENTIAL SDNY_GM_00220588 EFTA01377506