EFTA02481168

From: jeffrey E. <jeevacation@gmail.com> Sent: Thursday, November 5, 2015 4:33 PM To: Jabor Y.; Jennie Enterprise Subject: Re: Fwd: Saudi rates and CDS core club, 66 east 55 , andrea wil= bring you to jennie. 2 pm as you requested. On Thu, Nov 5, 2015=at 11:26 AM, Jabor Y. <mailto > > wrote: Interesting information Thanks <=p> On 5 Nov 2015 10:51 am, "jeffrey E." &=t;jeevacation@g=ail.com <mailtoleevacation@gmail.com» wrote: S&P cut Saudi Arab=a from A+ to AA- earlier this week as they expect the fiscal deficit will =ncrease to 16% of GDP in 2015, from 1.5% in 2014, primarily reflecting the=sharp drop in oil prices As a follow-up to the below, it is also interesting to look at playi=g the idea through FX. </=pan> USD/SAR is currently p=gged. While our base case is that the government will defend the peg, if h=adlines get worse, revenues collapse from depressed oil prices and the gov=rnment has to address fiscal spending, we believe forward points and volatility will continue to increase. Althou=h, it may be a low probability event that the government breaks the peg, i= we look at Kazakhstan's actions in August (see chart below), we s=e buying USD call/ SAR put options as an interesting risk reward. </=pan> USD/KZT lyr</=> Source: Bloomberg 11/0=/2015 Chart 2 below shows Saudi CDS Syr Saudi CDS 1 EFTA_R1_01597502 EFTA02481168 please =ote The information contained in this communication is confiden=ial, may be attorney-client privileged, may constitute inside informati=n, and is intended only for the use of the addressee. It is the propert= of JEE Unauthorized use, disclosure or copying of this communica=ion or any part thereof is strictly prohibited and may be unlawful. If =ou have received this communication in error, please notify us immediat=ly by return e-mail or by e-mail to jeevacation@gmail.com <mailto:jeevacation@gmail=com> , and destroy this comm=nication and all copies thereof, including all attachments. copyright -=11 rights reserved 2 EFTA_R1_01597503 EFTA02481169