EFTA Document EFTA01462164

<Client> sells One Touch on USD/JPY payout Barrier: 97 Payout: USD 13,300 Payout Ccy: <PayCurrency> Postpone Rebate: <PostponeRebate Y/N> Expiry: Thu 20-Nov-2014 Settlement: Tue 25-Nov-2014 ZoneCut: NY Premium: USD -378.78 Premium Date: Thu 04-Sep-2014 Net Premium: <Client> Receives USD 41,503 Forwarded by Tazia Smah;dtklbcom on 09/02,2014 08.55 AM --- From. "Taisuke Tanaka. Deutsche Securities Inc" To' TS* Smittildbrilbcom©DBAMERICAS. Date: 06/21/2014 02:42 AM Subject: DEutsche JApan View on FX - USW PY: Stay bullish Deutsche Securities Inc. - Fixed Income Research DEutsche JApan View on FX - USD/JPY: Stay bullish 21 August 2014 (1 page/ 192 kb) Download the complete report There are reasons to believe that the US0(JPY uptrend is sustainable. The USD/JPY is trying to resume an uptrend. The laggard housing sector recovery had been raising concerns about the US economy, but, as suggested by the leading NAHB indicator, housing starts data showed a sharp increase in July. Also, the July FOMC minutes confirmed that committee members are considering the possibility of increasing policy rates sooner. We see the USD/JPY uptrend continuing through 2015 and into 2016, and think the rate could ultimately overshoot 120. Our reasoning is as follows: 1) The US economy's recovery cycle: Once underway, a sustainable cycle should last a few years. We see US interest rates rising (albeit slowly), and continuing to support the USD/JPY. 2) EUR depreciation: With the wrapping up of purchasing operations after the sovereign debt crisis in Southern Europe, the EUR appears to have fallen to a downtrend that reflects the economic and monetary policy gap with the US. USD appreciation facilitates EUR depreciation, and a weakening EUR should continue to reinforce a strengthening USD. 3) Japanese money: Japan's institutional and individual investors have been steadily buying foreign currencies on dips. Their positions are a long way from completely factoring in JPY depreciation. As the JPY weakens, these investors will likely raise the dip levels that they buy on, and continue supporting the JPY depreciation trend. Public pensions are already providing strong support by increasing their overseas investments. 4) Sentiment: The consensus forecast tends to converge around current market levels and recent momentum. As a result of the market deadlock around 102 that continued for several months, average medium term forecasts were down to around 105 by the end of July. Once the USD/JPY regains 105, the consensus forecast for the next 3-12 months would easily rise beyond 110. 5) Speculation: Overseas speculators had been decreasing JPY-shorts until recently, meaning there is amply leeway for JPY selling to help the JPY depreciation trend resume. Even if they start taking profits, the USD/JPY uptrend should be supported by Japanese investors buying on dips. Speculators should find repeatedly entering JPY-shorts to be an CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0124573 CONFIDENTIAL SDNY_GM_00270757 EFTA01462164