EFTA Document EFTA01454161

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