FINCOR – Sociedade Corretora, S.A.

Weekly Markets

Perspectives

August 27, 2012

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said content or about any resulting effect that could have occurred.

5,20% 5,70%6,50%

9,80%

15,60%

10,30%9,10%

2005 2006 2007 2008 2009 2010 2011

Greece: Government Deficit as % of GDP

Greece – Anything else Sir?-Samaras met Juncker, Merkel and Hollande. All the Leaders said that a decision about a delay to implement

the austerity measures in Greece will be taken only after Troika’s visit to the country in September. They all

said that if Greece wants to remain in the Eurozone, must accomplish the program designed.

-But, as usual, there is already opposition from some European Leaders about giving more time to Greece.

More recently, both the Finance and Economic Ministers of Germany said that they were against this

decision as it would harm creditors and it isn’t a sustainable solution for the country.

Last year Greece had a deficit of 9,1% of your GDP, so until when will this unsustainable situation last?

We are still waiting

for you: ECB-There is a lots of talk in the markets saying that the

ECB will define a limit to the Yields of each country,

and if that value is exceed they will intervene buying

Sovereign Bonds.

-The Central Bank of Germany opposed immediately

to this, and even Pimco’s El-Erian said this was a bad

idea.

Spain: A bailout is closer and

closer…

-They issued €4,5MM in 12 and 18 months treasury

bills. There is still the rumor that Spain is close to

ask for a bailout as its financing costs are still at

unsustainable levels.

Until when are they going to resist?

4,868

6,421

4

4,5

5

5,5

6

6,5

7

7,5

8

1-2-12 2-2-12 3-2-12 4-2-12 5-2-12 6-2-12 7-2-12 8-2-12

Spain: 10Y Government Bond Yield

Rest of Europe-France issued again treasury bonds with negative Yields.

-And Germany issued 2 Year government bonds with an Yield of 0%.

-0,012

-0,1

0

0,1

0,2

0,3

0,4

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

Germany: 2Y Government Bond

Yield

Rest of Europe-Manufacturing data shows that the region continues slowing down.

40

45

50

55

60

65

PMI Manufacturing

Germany

France

Eurozone

A QE3? Does even the FED knows what should be their

next step?

-Positive FOMC Minutes: if the economy continues providing signs of contracting, new stimulus should be

added.

-And a study from FED revealed that the natural rate for US’ unemployment is 6%, showing that there is still

space to implement new stimulus in the economy as unemployment is currently near 8%.

-But the President of the FED of St. Louis said that he is against a QE3, as the recent economic data in the

country have been providing signs that the growth of the country is gaining pace again. Bullard is hak and a

no voter FED member

-All attentions are now centered on Jackson Hole Speech next Friday, where Bernanke should give more

clues about FED policy.

Economic data-This week the focus was on Real-Estate.

372

270

290

310

330

350

370

390

410

430

New Home Sales

3,39

4,47

3

3,2

3,4

3,6

3,8

4

4,2

4,4

4,6

4,8

5

Existing Home Sales

Do you think Michael Phelps is fast? You didn’t met my

friend Apple.

192,05

662,63

100

200

300

400

500

600

700

Apple

Rest of the World

-“Buy on the rumor and sell on the fact”, but as

for China it has been all just rumors. Are Central

Bank providing more stimulus?

-Japan trade balance still negative.-779,569

293,899

-281,814

-690,422

-205,57

-1481,467

25,41

-87,099

-523,924

-917,212

60,341

-517,382

Japan: Trade Balance (Billion Yens)

Weekly Preview

US Everybody is waiting by the Jackson Hole speech. Last year, Bernanke announced Operation

Twist. This year? Hmm… lets wait and see.

Europe The focus will continue to be Spain and Greece. We should follow closely the visit of Juncker and

Hollande to Madrid.

Rest of

the

World

China, all politicians said that they are going ton intervene in the economy. We and the markets

are backing up. Tensions in Syria, Iran and between China and it’s neighbors are rising up.

Market IndicatorsWe remain positive for the markets, but there are several risks that can prompt them to fall.

Weekly Preview

Option Skew Monitor. As it is positive indicates us

that it is higher the probability of big appreciations

on its value.

Vicious Cycle of Europe. We are currently on level 2.

1,2053

1,2554

1,19

1,2

1,21

1,22

1,23

1,24

1,25

1,26

1,27

1,28

EURUSD

Disclaimer

Disclaimer

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