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    Macro

    Macro

    Macro | Solid growth ahead

    Region

    2017F

    2018F

    United States

    2.3

    2.3

    Eurozone

    2.3

    2.0

    United Kingdom

    1.5

    1.3

    Japan

    1.5

    1.5

    China

    6.7

    6.5

    World

    3.7

    3.8

    Region

    2017F

    2018F

    United States

    3.5

    3.5

    Eurozone

    1.4

    1.3

    United Kingdom

    3.3

    3.5

    Japan

    4.8

    4.8

    China

    3.4

    3.2

    Region

    2017F

    2018F

    United States1

    1.5

    1.8

    Eurozone

    1.5

    1.4

    United Kingdom

    2.6

    2.7

    Japan

    0.7

    1.0

    China

    1.9

    2.2

    Region

    2017F

    2018F

    United States

    -2.6

    -2.8

    Eurozone

    3.1

    2.9

    United Kingdom

    -4.5

    -3.5

    Japan

    3.5

    3.5

    China

    1.8

    1.8

    Region

    Current*

    Dec 2018F

    United States

    1.00-1.25

    1.75-2.00

    Eurozone

    0.00

    0.00

    United Kingdom

    0.50

    0.75

    Japan

    0.00

    0.00

    China

    4.35

    4.35

    Current*

    Dec 2018F

    Crude oil (WTI)

    57.4

    55

    Gold

    1,275

    1,230

    Copper (LME)

    6,762

    6,600

    * Source Bloomberg Finance L.P. as of 11/30/17 1Core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures) F refers to our forecast as of 11/16/17 WTI = West Texas Intermediate LME = London Metal Exchange

    The arrows signal whether we expect to see an upward trend , a sideways trend or a downward trend .

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    Equities

    Equities

    Equities | Well supported by earnings growth

    Current*

    Dec 2018F

    Total Return (expexted)1

    Forecast

    in %

    Expected earnings growth

    P/E impact

    Dividend yield

    United States (S&P 500 )2

    2,648

    2,750

    6.2

    14%

    -9%

    2.3%

    Europe (Stoxx Europe 600 )

    387

    405

    8.4

    8%

    -3%

    3.7%

    Eurozone (Euro Stoxx 50 )

    3,570

    3,780

    9.6

    9%

    -2%

    3.7%

    Germany (Dax )3

    13,024

    14,100

    8.3

    8%

    -3%

    3.1%

    United Kingdom (FTSE 100 )

    7,327

    7,400

    5.3

    5%

    -4%

    4.3%

    Switzerland (Swiss Market Index )

    9,319

    9,450

    4.7

    13%

    -10%

    3.3%

    Japan (MSCI Japan Index )

    1,026

    1,120

    7.9

    13%

    -7%

    2.4%

    MSCI Emerging Markets Index (USD)

    1,121

    1,210

    10.7

    15%

    -6%

    2.8%

    MSCI AC Asia ex Japan Index (USD)

    696

    760

    11.8

    16%

    -5%

    2.6%

    MSCI EM Latin America Index (USD)

    2,719

    2,850

    7.7

    10%

    -5%

    2.9%

    * Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 11/30/17 1 Expected total return includes interest, dividends and capital gains where applicable 2 Revised target as of 12/4/17 3Total-return index (includes dividends) F refers to our forecasts as of 11/16/17

    Equity indices, exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend , a sideways trend or a downward trend . The arrows' colors illustrate the return opportunities for long-only investors. positive return potential for long-only investors. limited return opportunity as well as downside risk.negative return potential for long-only investors.

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    Fixed Income

    Fixed Income

    Fixed Income | Yields likely to rise only slowly

    Dec 2018F

    United States

    U.S. Treasuries (10-year)

    2.41%

    2.60%

    U.S. municipal bonds

    92%

    85%

    U.S. investment-grade corporates

    92 bp

    80 bp

    U.S. high-yield corporates

    344 bp

    350 bp

    Securitized: mortgage-backed securities 1

    72 bp

    100 bp

    Europe

    German Bunds (10-year)

    0.37%

    0.80%

    UK Gilts (10-year)

    1.33%

    1.40%

    Euro investment-grade corporates2

    95 bp

    75 bp

    Euro high-yield corporates2

    272 bp

    260 bp

    Securitized: covered bonds

    46 bp

    65 bp

    Italy (10-year)2

    138 bp

    160 bp

    Asia-Pacific

    Japanese government bonds (10-year)

    0.04%

    0.10%

    Asia credit

    229 bp

    210 bp

    Global

    Emerging-market sovereigns

    288 bp

    285 bp

    Emerging-market credit

    285 bp

    270 bp

    * Source: Bloomberg Finance L.P. as of 11/30/17 1Current-coupon spread vs. 7-year U.S. Treasuries 2Spread over German Bunds F refers to our forecasts as of 11/16/17 bp = basis points

    Fixed Income: For sovereign bonds, denotes rising yields, unchanged yields and falling yields. For corporates, securitized/specialties and emerging-market bonds, the arrows depict the option-adjusted spread over U.S. Treasuries. depicts a rising spread, a sideways trend and a falling spread. The arrows' colors illustrate the return opportunities for long-only investors. positive return potential for long-only investors. limited return opportunity as well as downside risk.negative return potential for long-only investors.

    Currencies

    Current*

    Dec 2018F

    EUR vs. USD

    1.19

    1.15

    USD vs. JPY

    112.5

    115.0

    EUR vs. GBP

    0.880

    0.885

    GBP vs. USD

    1.35

    1.30

    USD vs. CNY

    6.61

    6.80

    * Source: Bloomberg Finance L.P. as of 11/30/17 F refers to our forecasts as of 11/16/17

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