10 12 14 lOy yield, inverted axis (lhs) Equity Risk Premium, over lOy (rhs) pp 11 ERP (over 10y) = 10.48 - 0.874 * lOy yield Adj R-Sq: 77.9% Correl EFTA01476171 Since 1933: -88% Since 1980: -92% 1933 1947 1961 1975 1989 2003 2017 Source: Bloomberg Finance LP, Deutsche Bank Research -3 -1

ds productivity USD TWI (dev from PPP implied, 12q lead, lhs) US Nonfarm Productivity (dev from trend) (rhs) 10 20 30 40 -30 -20 -10 0 10 Correl (since 1982): 51% -10 -8 -6 -4 -2 0 2 4 6 8 Source: BLS, Deutsche Bank Research Figure 8: Over allocation to bonds Cumulative bond flows