Financial Markets Recap Week ended April 10th, 2015

Issued by: Treasury & Investment Department

Global stock markets moved up this week, extending year-to-date gains on increased optimism for renewed growth as central banks continued their accommodative policies. European and Japanese stock indices reached 15-year highs.The release of US Federal Reserve March policy meeting minutes revealed mixed views on the timing of interest rate hikes. With another spree of large deals announced this week, corporate M&A activity is on pace for its second busiest year since 2007.The price of oil was volatile, driven alternately by growing demand and potentially increasing supply if a nuclear agreement reached with Iran results in the rollback of economic sanctions. The yield on the 10-year US Treasury note climbed above 1.90%. The US dollar rallied relative to the euro, which fell back to $1.06.

Overview

US Fed split over when to raise rates

Members of the Federal Open Market Committee were undecided over whether to raise

rates in June, late 2015 or 2016, according to minutes of their mid-March policy meeting

released Wednesday. A report released Friday showing import prices falling 0.3% in March

lent support to waiting beyond June, as deflation concerns remain.

US job openings hit 14-year highUS job openings advanced to a seasonally adjusted 5.1 million in February, a 14-year high, according to the US Department of Labor. This contrasts with surprisingly weak nonfarm payroll growth of 126,000 for March, reported last Friday. The March jobs report ended a year-long string of monthly employment gains above 200,000 — the longest stretch since 1995.

US services sector continues to expand

Two measures of US services activity moved in opposite directions this week, but both

showed the sector remaining in an expansionary phase. The Market Services Purchasing

Managers’ Index rose to 59.2 in March, the highest level since August, from 57.1 in

February, while the Institute for Supply Management’s services gauge edged down to 56.5

from 56.9

US economic news

US jobless claims rise to 281,000Initial claims for US unemployment benefits climbed 14,000 to 281,000 for the week ended 4 April. The four-week moving average fell 3,000 to 282,250. Continuing claims fell 23,000 to 2.30 million for the week ended 28 March. The four-week average and continuing claims figures were the lowest since 2000.

US economic news cont’d

U.S. Stocks

Index Friday's Close Week's Change % Change Year-to-Date

DJIA 18,057.65 294.41 1.32%

S&P 500 2102.06 35.10 2.10%

NASDAQ Composite 4995.98 109.04 5.49%

Germany shows mixed signs of recoveryGerman exports rose 3.9% in February from a year earlier. February’s industrial production was up 0.2%, which was less than expected, while January’s number was revised down to a 0.4% decrease from the 0.6% increase previously reported.

Bank of Japan continues stimulusThe Bank of Japan maintained its policy of providing ¥80 trillion ($666 billion) annually in monetary stimulus. Though policymakers see progress in rising profits, wages and confidence, Japan is still struggling to spur 2% annual inflation, and the BOJ is expected to add more stimulus by October.

China’s inflation stays at 1.4%China’s consumer price index remained at 1.4% annually in March, while the producer price index fell 4.6%, slightly less than the forecast 4.8%. Weak inflation data raised expectations of further central bank easing.

UK services index climbs to seven-month highGrowth in UK service sector activity accelerated to a seven-month high in March as the economy picked up momentum. First-quarter gross domestic product is expected to grow 0.7% from the previous quarter.

Week ended April 10th, 2015

The performance of main indices compared to last month and year to date

Week ended April 10th, 2015

Region/Country Week's Return % Change Year-to-Date

Europe ex-U.K.

France 0.73% 6.96%Germany 0.79% 9.86%Italy 1.23% 8.95%

Spain 2.26% 1.94%

Switzerland 0.59% 6.68%

United Kingdom -0.59% -0.10%Japan -0.05% 11.97%

AC Far East ex-Japan

Hong Kong 1.59% 7.01%Singapore 0.76% -0.58%

EM Latin America

Brazil 9.06% -10.12%Argentina -0.23% 26.68%

EM (Emerging Markets)

India 2.60% 6.24%

Russia 9.30% 26.50%

Turkey 4.03% -12.89%

Oil Forecast for the week April 13th, 2015, Technical AnalysisThe light sweet crude market rose during most of the week, but found quite a bit of resistance at the $54 level. By doing so, it ended up forming a shooting star which of course is a very bearish sign. With that, it appears that the consolidation range will continue, and that there is a significant amount of resistance near the $55 handle. With this, the market looks as if it is going to continue to go back and forth between the aforementioned $55 handle, and the $45 handle on the downside. It is believed that this market will be difficult to trade for longer-term traders, but should continue to offer back and forth trading opportunities on shorter-term charts. It is believed that the downward pressure should continue in this marketplace overall, so therefore it would anticipate seeing this market possibly breaking down overall.

The Brent markets rose during the course of the week as well, but found the $60 level above as being resistive. With that, the market didn’t quite form a shooting star, but it did form a candle that showed that the market is struggling. The $64 level above is a massively bearish level, and as a result the market will struggle to get above there. It is believed that anytime this market rallies there will more than likely be a selling of that shortly thereafter, and that the market could very well head back to the $50 level given enough time.

Even if the market breaks out to the upside, it is most certainly in a massive downtrend, and as a result it should eventually see resistance above. Anytime a resistive candle would be a selling opportunity and it would take advantage of it. It is believed that the US dollar should continue to strengthen overall, and that it’s going to be difficult to own any type of commodity with of course the Brent market being no different at this point in time. Demand is soft, and the US dollars strong, which of course is a perfect storm for oil weakness.

Oil, Gold & Silver Forecast

Silver Forecast for the week April 13th, 2015, Technical Analysis

Silver markets fell during the course of the week, testing the $16 level at one point. However, it did bounce a little bit from there, so is feels the market isn’t quite ready to completely break down yet. Nonetheless, it will continue to consolidate, with the $15 level below being massively supportive. it looks at supportive candles in that area as a potential buying opportunity, just as it looks at resistive candles near the $18 level as a selling opportunity. Overall though, this is going to be a difficult market for longer-term traders to be involved in.

Gold Forecast for the week April 13th, 2015, Technical Analysis Gold markets did very little during the course of the week, essentially forming a neutral

candle. However, it does look like the $1200 level is trying to offer a bit of support. If it

can break the top of the range ($1,224- $1,192), it feels this market probably goes to the

$1300 level given enough time. At the same time, but if it breaks down below the bottom

of the range for the week, it is believed that the market then could go as low as $1150

given enough time. Regardless, this marketplace should continue to be volatile.

GBP/USDThe GBP/USD pair broke down during the course of the week, slicing through the 1.48 level. In fact, it made a lower level at one point, so the market is going to continue to grind down to the 1.45 handle. Any rally at this point time should be a selling opportunity as well, and with that it is very bearish. It has no interest in buying the GBP/USD pair, at least not until it gets well above the 1.52 level, as it could signify the market heading to the 1.55 level.

EUR/USDThe EUR/USD pair fell hard during the course of the week as the 1.10 level continues to be resistive. The 1.05 level below has been supportive, but it would be only a matter of time before is falls below there in our opinion. It would head to the parity level at that point in time, and believe that bounces continue to be nice selling opportunities as the European Central Bank continues to offer significant liquidity measures that of course can work against the value of the Euro. No interest in buying.

USD/JPYThe USD/JPY pair broke out during the course of the week, testing the top of the shooting star from the previous week. With that, the market looks as if it is ready to head to the 122 handle, and it believes that short-term pullback should offer buying opportunities going forward. It looks as if it could be forming a bit of an ascending triangle as well, so it’s very likely that it continues to go higher given enough time. Regardless, the 115 level below is the absolute “floor.”

The Week Ahead

• Fed minutes suggest no hurry to hike rates• US labor measures strong despite weak payroll gains• Bank of Japan holds steady• China’s inflation remains muted• Shell acquisition tops week of mergers

Next week important events:• The European Union reports industrial production on Tuesday, 14 April.• China reports first-quarter gross domestic product on Wednesday, 15 April.• Intel, Wells Fargo and JPMorgan Chase report quarterly earnings on Tuesday, 14 April.• The US Federal Reserve releases the Beige Book on Wednesday, 15 April.• General Electric reports quarterly earnings on Friday, 17 April.

Stay focused and diversifiedIn any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

Key highlights

Disclaimer:The information and opinions contained in this document have been compiled in good faith from sources believed to be reliable. Bank Al Etihad makes no warranty as to the accuracy and completeness of the information contained herein. All opinions and estimates included in this report constitute and reflect independent judgments as of the date published on the report and are subject to change without notice. Bank Al Etihad accepts no liability whatsoever for any loss of any kind arising out of the use of all or any part of this report. Bank Al Etihad may has performed or seek to perform any financial or advisory services for the company mentioned in this report Bank Al Etihad, its funds, or its employees may from time to time take positions or effect transactions in the securities issued by the company mentioned in this report.