4 Deutsche Bank AG/London EFTA00610289 9 January 2014 FX Blueprint: Thin end of the wedge Theme #8: Balti not faulty, China yet finer 2013 saw Asian FX fracture into a North and South complex. Relative sensitivity to the yen, the EM debt bubble, and the developed world equity/growth cycle all serv

ion for the more medium term. • appear to have priced in the end of equity outflows for Recall that equity outflows were a much bigger driver of Asian FX weakness over the summer than bond outflows (this was a 'growth tantrum' more than a 'taper tantrum'). The relationship between average FX returns

Dashing Buck Theme #7: Japanese Takeaway 3E We expect sensitivity to the JPY and offshore portfolio allocation preferences will continue to drive Asian FX. We are long USD/KRW, USD/SGD & MYR/JPY. Asian FX returns this year have largely been driven by varying sensitivities to the JPY. Correlations to

term. • Currencies appear to have priced in the end of equity outflows for now (Chart 9). Recall that equity outflows were a much bigger driver of Asian FX weakness over the summer than bond outflows (this was a 'growth tantrum' more than a 'taper tantrum'). The relationship between average FX returns

9 January 2014 FX Blueprint: Thin end of the wedge Theme #8: Balti not faulty, China yet finer 2013 saw Asian FX fracture into a North and South complex. Relative sensitivity to the yen, the EM debt bubble, and the developed world equity/growth cycle all serv