Text extracted via OCR from the original document. May contain errors from the scanning process.
From:
Tazia Smith
Sent:
5/1212014 9:40:04 AM
To:
jeevacation
ailcom
CC:
Vinit Sahni
; Nav Gu
Vahe Stepanian
Subject:
Copper - positive momentum from China cap mkts reform
Good Morning Jeffrey -
Paul Morris
Your copper option is $300,000 bid (431,250 p/I), vs. ref of 6883. This is up from $239,583 as of Friday. Research and
desk commentary is below.
Bid as of 9:20am 5/12, 3m spot ref 6883, $240/mt. This compares to mid of $252/mt with 0 vol, $240 represents 0.6% vol
(0.75% standard, tightened it). Vega on the option Vega = $20.27/mt. Source: DB Commodities Trading, 5/12/14
As you know, China announced its New National Nine Rules" (in contrast to the earlier "National Nine Rules' issued in
2004), which outline meaningful changes to increase open-ness in Capital Markets out of China on 5/9. DB research
summary below, bottomline takeaway: "Under such endeavor, China capital markets will be much more diverse,
structured and transparent in the future, and will a) mobilize massive private savings, b) encourage inward portfolio flows;
and c) lift market sentiment and valuation."
From Matt's team:
"Copper is a popular choice for use as collateral in financing trades. Now China is proposing that local governments would
be able to issue bonds rather than rely on, among other things, using copper as collateral for financing trades. Indeed it is
expected that use of SPVs will be come increasingly difficult. This should be bearish for copper after the regulation is
passed. Meanwhile, we think that before the regulation is passed, people are trying to secure as much copper-backed
financing as they can, which has resulted in a scramble for copper, and a spike in price. I would further qualify and say
that the news announcement has not resulted in a scramble for physical copper yet, but an expectation for the scramble,
which itself is sufficient to spike up the price. "
S/12/2014
live
Description
Trade Date Expiration Notional
Cost Sash
WM'
MTM• Pit
USW, Triple One-Touch 101 Call'
11/21/2013 11/20/2014
1.000,000 USD S
•
$ (4,865) $
(4,665)
Dec14 Copper MOCalle*
4/712014
12/312014
Lzsornetrictons $331,250 $300A00 $
(31,250)
l'$331,250 $ 295,135 $
(36,11.5)
• Not a bid/offer. Mid Mark- to-Marke. as reported on client's Da Valuation Statement.
•• Bid as of 9:211am 3/12, ref 6833. $240/mt (5252 0 vol mid, $240 represents 0.6% vol, vet on the option Vega = $20.27/m) Source: DB Commodities Trading, 5/12/14
— FONvardad by Tazia Snathklbrdbcom on 051122014 09.22 AM --
From:
Amy Tan,db(cl
To:
Date.
Subiett
05112,2014 06.08 AM
DB China unveils agenda for comprehensive capital market reform
Deutsche Bank - Fixed Income Research
Data Flash - China unveils agenda for comprehensive capital market reform
11 May 2014 (2 pages; 81 kb)
CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e)
DB-SDNY-0112126
CONFIDENTIAL
SDNY_GM_00258310
EFTA01454161