Daily Market Reviews by MAYZUS.com

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08 MAY 2013: ASIAN SHARES RISE ON CHINESE TRADE DATA

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The positive sentiment in global equity markets received a new boost on better than expected Chinese trade data. Asian shares rose to their highest level in two years after China reported a 14,7% export increase in April. Imports were up 16.8% with a trade surplus of USD 18,16 Billion for the month. The Chinese data comes on top of new Wall Street highs with Dow Jones closing above 15 000. In Germany industrial orders showed unexpected strength last week and pulled the Dax index into record territory.

The Australian Reserve Bank became yesterday the last central bank to cut interest rate creating an opening for parity between Australian and US dollars. Share prices are helped by decreased bond returns. The cut in interest rates play into the hands of equities. The Asian Pacific MSCI-index rose 0,8% and reached the highest level since August 2011. Global market sentiments were helped by strong quarterly results by one of the world leading banks, HSBC, and a profit jump for the US Disney. Cut in the labor seems to be the driving force behind HSBC’s result.

The Chinese trading numbers are likely to ease recent concerns about weakness in the recovery in the world second-largest economy. Doubts remain, however, over real demand in China, and the accuracy of their figures. Oil and commodity prices are trading firmer after the Chinese data. A successful bond trade in Portugal supported the upbeat mood and strengthened the Euro. Euro/USD is steady at 1.3080. There is still no breakthrough in USD/JPY which sticks to the 99 yen a dollar level. USD/British sterling, GBP is trading at 1.5479 slightly down from yesterday.

Gold continues to be under pressure. Gold lost one percent during yesterday’s trade. It has recovered to 1455. Gold backed exchange traded funds fell to their weakest level since 2009 indicating that investors money is leaving gold for booming stock markets. This suggests that the super cycle of commodities might be over and that tough times might lie ahead especially for metals. Analysts see that commodity prices in the future probably may be more determined by normal supply and demand balances than by speculative money flows.

Gold traders take an opposite opinion. The present equity boom is driven by low interest rates and central banks money printing. This will create inflationary pressure and challenges for the market system as witnessed by the financial crisis in the autumn of 2008. In such an environment investors will still use gold and precious metals as a hedge. Gold bulls, therefore, stress that a rebound to the USD 1700 level is most likely also in a shorter term perspective.

Copyright: MAYZUS Investment Company Ltd

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09 MAY 2013: STOCKS RALLY AS MAJOR CURRENCIES LOSE DIRECTION

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Global equity markets continue to rally as major currencies have lost a clear direction. Encouraging global data and Wall Street’s extended record rally, took Asian shares to a new two-year peak Thursday morning. Australia presented strong unemployment numbers. While 50 100 new jobs were added in April, the South Korean central bank made a surprise 0,5% interest cut lowering the interest rate to 2,5%. These steps further cemented the positive mood in global markets.

Lower interest rates and central banks increased money printing have created spare liquidity which moves into stocks. The Japanese monetary easing brought the Nikkei index within striking distance of a five-years highs outperforming its global peers. Stocks remain the favored asset class among investors as monetary easing depresses return on bonds. Unclear prospects regarding the world economic growth weigh negatively on commodity prices. Commodities trade without any clear direction with precious metals temporarily falling out of favor with investors.

In contrast to the clear uptrend in global equities major currencies have lost direction. This is the case with Japanese yen, JPY, which depreciated continuously since November last year and depreciated and lost 20 – 25% against most currencies. The last weeks USD/JPY has traded in the interval between 97 – 99 yen a dollar unable to make a major breakthrough and jump above the psychological 100 level.

Investors which made huge profits betting on big cash currency positions earlier this year go into equities which regardless of economic fundamental outlooks are strongly buoyed by monetary easing. As long as central banks keep their accommodative stance the uptrend in stocks would continue. Stocks were also helped by the upbeat US unemployment figures last Friday, Chinese trading data and more promising prospects for the German industry.

In spite of the economic outlook for the Euro zone continues to be dismal, the Euro remains resilient. Euro/USD trades at 1.3160. The economic problems in Europe are indeed serious, but traders have recently burnt their fingers on going short on Euro and stay away. The Euro seems to have discounted eventual bad news, and the balance of payment and real interest rates are no lower than anywhere else. There is no clear conviction among traders as to the timing of Euro weakness. In this financial climate oil prices are keeping up steady. Brent is hovering around USD 104 a barrel. Gold price which fell to USD 1449 on Tuesday, has picked up and trades at 1474.

Copyright: MAYZUS Investment Company Ltd

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10 MAY 2013: YEN BREAKS THROUGH 100

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

After flirting with the 100 yen to a dollar mark for weeks USD finally smashed through this psychological important hurdle indicating further weakness in the Japanese yen. USD/JPY traded as low as 101.20 early Friday, down two percent from Thursday’s 98,75, the lowest level seen in four and a half years. The record low represents a victory for Prime Minister Shinzo Abe’s “Abenomics” and his deliberate efforts to weaken the yen and strengthen economic growth through monetary easing.

In an effort to counter the weaker yen and boost its own competitiveness both Australia and South Korea have during this week cut their interest rates, sparking what seems as a currency war among Asian trading partners. Both countries cited their strong currencies as one of the reasons for their 0,5% cuts. A South Korean finance ministry official said Friday that Seoul was worried about the pace of the yen’s decline. The yen has depreciated 25% since the decline started in October/November.

Japan economy minister Akira Amari reiterated as Japan did during the recent G-20 meeting, that Tokyo has no intention to manipulate currency levels. Analysts expect a further fall in yen as dollar/yen finally have gotten over the psychological hurdle of 100. A continued downward pressure on the currency was underscored by data published on Friday showing that Japanese investors finally have reversed their relentless selling of foreign bonds. Japanese investors have over the last 12 weeks been net sellers of foreign bonds.

The Nikkei index soared to a four and half year high, up 6,5% only this week. The US dollar was buoyed by new strong jobless claims. The last weekly report published yesterday confirm the stronger than expected monthly nonfarm payrolls for April when jobless claims fell to its lowest level in five years. Signs of a steady US recovery has already could fuel speculation that the Federal Reserve (FED) might scale back its aggressive quantitative easing.

After reaching 99,95 in early April the USD has stalled one month against the yen. EURO/JPY simultaneously rose to 131,91, its highest since January 2010. There is no major changes in oil prices, copper and other commodities. Gold fell back from its high on USD 1474 and has recovered to 1462 in early Asian trading.

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13 MAY 2013: FED WARNS AGAINST EXCESSIVE SPECULATION

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

A stronger dollar weighed in on commodities across the board during Friday and Monday morning trades. USD has continued to strengthen towards the Japanese yen. After the break through of the critical 100 hurdle USD is trading at 101,90 yen a dollar. The weak yen is giving Japanese equities a strong boost while other Asian stocks are trading lower. Both oil and gold prices fluctuated wildly during Friday’s trade. Euro/USD trades at 1,2973.

Brent crude was down to USD 101 a barrel on Friday, but has recovered to 103.10. Gold which dipped to USD 1415, trades at 1431. The drop in commodities prices weighed on the Australian dollar which eased to an 11 month low of 0,991. The G-7 finance ministers meeting on Friday cemented the firmness of the dollar when Japan avoided criticism for its bold reflationary policies. “Abenomics” has led to a steady decline in the Japanese yen which improves exporters earning prospects and underpins the export-reliant Japanese economy.

Japan as for years been urged to revive its economy. When Japan takes action few countries are in a position to complain. Other federal banks as the US Federal Reserve (FED) and Bank of England have as other central banks printed money as the Bank of Japan is doing now. The steep 25% depreciation of the yen since last November is nevertheless creating nervousness about to the health of financial markets and the global economy. Retail data from US and China to be presented later this week, are therefore going to be studies cautiously.

FED Chairman Ben Bernanke raised these concerns during a speech in Chicago late Friday. Bernanke warned against excessive risk-taking in financial markets in a hunt for profit. Bernanke saw the strong drive in the dollar as the latest manifestation of a desperate global hunt for yield. Bernanke expressed worry that banks due to low interest rates and fall in bond prices, are resorting to excessive speculation, highlighting the danger that easy monetary policy could create a new asset bubble with stock prices running ahead of market fundamentals.

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14 MAY 2013: US RETAILS BOOST GLOBAL MARKETS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The dollar took a breather this morning after reaching near a five week-high against a basket of major currencies, DXY, on Tuesday. The greenback was boosted by surprisingly strong US retail sales in April which saw a rise in in households buying of cars, building materials and a range of other goods. The data pointed to the underlying strength in the US economy and led to increased optimism about a recovery in the world’s largest economy.

After rallying on Friday and Monday the USD took a pause and retracted 0.3% against the currency basket. Euro/USD trades at 1.3010 and USD/JPY stands at 1.0156. The slightly weaker dollar helped stabilizing commodity prices with gold gaining one percent to USD 1445 recouping losses from previous sessions. The stronger dollar is based on a recovery scenario for the US economy. A sluggish growth in emerging countries have kept commodity prices low.

The prospects for a firmer US recovery are likely to have a positive effect on the demand for commodities. There are also small signs of stability inside the struggling Euro zone. During yesterday’s bond auction Italian bonds fell to its lowest level since January. Investors backstopped by guarantees from the European Central Bank (ECB) and brushed off concerns about Italy’s political and economic troubles, pointing towards a normalization in financial markets.

After a two-day losing streak, Asian stocks again rose this morning. The Asian-Pacific MSCI-index is up 0,3% with Australian and South Korean stocks also climbing. The Japanese Nikkei continues to rise 0,2%. Australian stocks were helped by a weaker Aussie. Oil prices are slightly up from yesterday. US crude futures, NYMEX, trade at USD 95,41 a barrel. Brent crude is up 0,1% to 102,90. Wall Street ended flat yesterday after recent highs.

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15 MAY 2013: BANKS LIFT WALL STREET TO NEW RECORD HIGHS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Headed by Bank of America and Citigroup Wall Street was lifted to new record highs yesterday as the stock market rally continues for the ten consecutive days. Investors picked large-cap companies’ shares on the expectation that central bank stimulus will help the rally further. S&P index has so far in 2013 gained almost 16% in a rally driven by The Federal Reserve’s (FED) monetary easing. All Western banks are easing aggressively and money looking for yield ends up in the stock market.

In spite of some nervousness that the bond-purchase program may be reined in, investors are for now betting that central banks will be careful not to remove its support to soon to disrupt the economic recovery. Dow Jones was lifted 0,82% to a new record high of 15 215. Nasdaq, the technology stock index, reached a one year high of 2 462. Western European markets were also strong. In Tokyo stocks surged to a 5-and-half-year high as the Yen continues to fall against other currencies. USD/Yen trades at 102,15.

The positive sentiment in the US propels the dollar which gained new 50 points against the Euro. Euro/USD trades at 1.2932. British sterling, GBP, is also losing ground. USD/GDP is down from last week’s high 1.5575 to 1.5227. The dollar index, DXY, is steady after reaching an overnight high of 83,687. Commodity prices, listed in USD, are decreasing steadily. Gold trade at 1425 in Asia recovering 10 dollar from yesterday’s new onslaught. Oil prices are also under pressure. The fracking technology has made the US sufficient on energy with the biggest crude storages seen in 50 years. This put a strong downward pressure on oil.

Two major US banks have downgraded Chinese GDP growth to 7,6% for 2013 and 2014 stating that the time for double digit growth in China has gone. Their original forecast was 8%. The Chinese government has put 7,5% as its target. In a separate development the Chinese Premier, Li Keqiang, said that China has limited room to use government spending and policy stimulus to boost its economy. The statement dashed hopes among some investors that Beijing may take steps to foster growth.

Copyright: MAYZUS Investment Company Ltd

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16 MAY 2013: DISAPPOINTING DATA STOPS RAISE OF USD

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Data on the US industrial production fell more than expected in April. The industrial data shows that in spite of a string of good news pointing towards a recovery in the US economy, the overall picture is not uniformly strong. The industrial data, the weakest in ten months, immediately had a negative effect on the dollar index, DXY, which dropped 0,1%. The dollar is nevertheless extremely strong. Euro/USD trades at 1.2867 near a 6 week low. USD/JPY is steady at 1.0224.

The disappointing industrial production added to the buzzing debate on when the Federal Reserve (FED) will eventually start winding down its asset purchasing program tantamount to printing money. Positive news, as increased employment and retail sales have pointed towards an end to quantitative easing within the year. However, the industrial data fuels arguments for continued easing. Citing this, FED chairman Ben Bernanke’s speech over the coming weekend will certainly be watched intently.

The industrial data represented a limited setback for the dollar which, this month alone, has gained 3,8% against “safe haven” currencies such as the Swiss Franc and the Yen. The Australian dollar has lost 4,5%. Since the beginning of the year the USD has jumped 17,8 percent towards the Yen. Most analysts believe that the dollar shall continue to be strong, with the yen subsequently weakening. Some forecasts indicate USD/JPY at 124 at the year’s end.

The Euro/USD fell as deep as 1.2642 on Wednesday following presentation of the French GDP numbers, clearly indicating that France has slipped into recession. The rate of Germany’s robust economic growth is not sufficient to prevent the euro zone from contracting for the sixth quarter in a row. If the ECB follows up indications to lower its interest below zero (if the economy slows further), then the euro will probably suffer a broad sell-off. With the Cyprus crisis still fresh in mind, investors will, most likely, park their deposits outside of Europe.

Japan’s GDP rose 0,9% in the first quarter of 2013, expanding at its quickest pace in a year. Increased private consumption, and a steady rise in exports are seen as the first results of Prime Minister Shinzo Abe’s aggressive stimulus policies. The economy is also picking up in India where forecasts point to an increase in GDP on 5,5 – 6%.

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17 MAY 2013: USD STRENGTHENED BY FED STATEMENT

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The dollar strengthened Friday morning and held firm against a basket of currencies, DXY, after a Federal Reserve (FED) official had indicated that FED may begin to taper its bond buying known as monetary easing already this summer. In a statement on Thursday the President of FED, in San Francisco, indicated that the Central Bank might ease back on the monetary gas pedal and end bond buying by the end of the year. His indications immediately led to a rise in the dollar with DXY up 0,4 % and nervousness in equity markets.

Analysts see a stronger dollar being prominent over the next months’ currency developments. The Euro/USD fell to 1.2860 and depreciation of the Japanese Yen continued. USD/JPY trades at 102,31. The dollar is likely to gain, particularly against low-yielding currencies such as Euro, Yen, GBP and Swiss Franc. In spite of conflicting macroeconomic signals from the US over the last few days, consensus among analysts seems to be that the US economy is holding up much better than that of the rest of the world. A strong US recovery strengthens the dollar lower yield currencies and gold.

There are, however, mixed signals. Numbers presented on Wednesday showed the US industrial production at its lowest level in 10 months. Data on Americans filing new jobless claims climbed last week at its fastest pace in six months, up 32,000 to a seasonal adjusted 360,000. The highest jump since November. The increased jobless claims came amidst signs of slower last quarter US-growth, due to the Federal government’s austerity drive with a hike in taxes in January and sweeping budget cuts in March.

The number of jobless claims stand in stark contradiction to last month’s 165 000 newly added jobs, and the drop in the unemployment rate to a four year low at 7,5 %. Stock markets were nervous yesterday. Wal-Mart, the world wide hypermarket store, presented quarterly earnings below Wall Street expectations. Stock prices fell 2 %. Good quarterly results from the technology sector and especially CISCO counterbalanced. The Asian Pacific MSCI-index fell 0,3 %.

Gold at USD 1379 is striving to keep above the four-week low on 1369 reached on Thursday. A Credit Suisse forecast predicts a 20 % fall in the price of gold during the next twelve months. Oil prices are steady with Bren trading at USD 103,64 a barrel.

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20 MAY 2013: PRECIOUS METALS TUMBLE IN ASIA

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Gold and Silver tumbled in early Asian trade. Silver dropped to the lowest level seen in years falling 4,31 % since Friday, Gold is trading at 1344 down 50 dollar an ounce since Friday. Precious metals have been under continuous pressure over the last few months. Gold fell 5,5 % during last week and the free fall accelerated this morning. Silver was, however, hit the hardest. Silver is trading at USD 21.35 an ounce, down one-and-a-half dollars since its high on Friday.

There is confusion in the precious metals markets. Gold bulls are claiming that some big bank and financial institutions are deliberately manipulating gold prices down, to buy back at lower levels when central banks aggressive money printing are going to hit the market with inflationary pressure. In such a situation, investors will again start buying gold and silver as a hedge and traditional safe haven.

The main reason for the fall in prices seem, however, to be that financial investors are liquidating,or strongly scaling down on their precious metals positions and turned into equities. The latest numbers from the US Securities and Exchange Commission demonstrate this development on the US SPDR GLD exchange. This statistics also shows that John Paulson,the billionaire hedge fund manager and the largest owner of shares in the GLD fund, maintains his positions.

Institutional selling of precious metals have been counter weighted by strong Asian buying of jewellery and coins, which have provided support for gold amid consistent selling by institutional investors. Precious metals in kind are selling USD 10 higher than “paper” gold. It is, however, a question of how long the physical buying of gold can last. Chinese demand rose 20 % in the first quarter boosted by an increase of 19 in jewellery and 22 percent in bar and coins. Indian demand increased similarly. Barclays Banks forecast is that gold shall average USD 1350 in the second quarter of 2013. Credit Suisse predicts a fall in gold prices to USD 1100 in a year’s time.

The USD clawed back and closed last week on its strongest level in three years against other currencies. Euro/USD trades at 1,2843 and USD/JPY 102,64. Australian and New Zealand dollars suffered heavier losses against the USD than their counterparts. The Australian dollar hit its lowest level in a year on Friday. Euro and GBP are also under strong downward pressure. Oil prices are steady with Brent trading at USD 104,50 a barrel.

Copyright: MAYZUS Investment Company Ltd

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21 MAY 2013: GOLD REBOUNDS AS USD WEAKENS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Gold and Silver rebounded strongly yesterday after the onslaught at the end of last week, and in Asia on Monday morning. Both the precious metals fell nearly 5 %. Gold trades at USD 1387 an ounce in Asia, 35 dollars up from the lows 24 hours ago. Silver trades at USD 22,70 rebounding from a low of 21.00 and reached USD 23, at the start of the Asian trading session. The cautious comments from representatives from the US Federal Reserve (FED) regarding the bond-buying stimulus, have weakened the USD.

In a statement on Monday, the President of the Federal Reserve in Chicago followed up last week’s comments from another regional FED president, that the bond-buying program might end abruptly in the autumn if, by then, the FED was sure that the labour market was on solid footing. Earlier, the FED put a 6,5 % unemployment statistic as the critical mark. The last published data showed a 7,6 % unemployment statistic. The aggressive monetary easing policies now also followed by Japan, has given global stock markets a strong boost.

US-stocks ended flat on Monday with indexes hovering near record levels. Concerns about a stop in bond-buying and a correction are influencing markets. Energy stocks and primarily solar companies soared. Dow Jones saw an intraday high at 15 391. S&P reached 1 672. Both indexes are up 17 % since January 1st. Investors are split between nervousness for a strong correction due to the sharpness and length of the rally, and those who are afraid to miss a continued rally.

European shares set a new five-year high for the fourth straight session on Monday, after positive indicators from The United States and Japan pointed to an improving global economic outlook. European blue chip stocks (Financial Times Eurofirst 300 index) was up one percent, which is the highest level seen since mid 2008. The positive US consumer sentiment data from Friday, the highest level seen in almost six years, is seen as especially encouraging. EasyJet and Ryan Air were among the biggest gainers.

The Japanese Yen tumbled yesterday after comments from its Minister of Economy, warning that the currency might have weakened enough. USD/JPY fell to 102 after Friday’s high on 103,22, but has rebounded to 102,22. Oil prices are keeping steady. Brent crude trades at USD 104,83 a barrel. FED Chairman Ben Bernanke’s statement to Congress on Wednesday will be crucial for the further development in currencies and global equity markets.

Copyright: MAYZUS Investment Company Ltd

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22 MAY 2013: BERNANKE HOLDS THE KEY TO THE STRENGTH OF THE USD

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Global markets traded steadily yesterday building up to the publishing of the Federal Reserve’s minutes from the last BOD meeting in April/May, and Ben Bernanke’s statement to Congress later today. After a small correction on Tuesday, the USD continues to strengthen and is up close to record high against a basket of currencies, DXY.

As proven over the last few weeks, the overall trend in the USD is pointing up towards all currency pairs in spite of a day or two of declines. This trend is supported by three main factors; the forecast for the US is better than for any other economy, Europe is ridden with recession and Japan is concentrating its efforts on increasing the inflation to the 2 % target.

The upswing in the US economy is mainly due to its monetary easing and FED's loose monetary policies. FED representatives have, over the last few days, indicated that the bond buying program will soon come to an end. If Bernanke “sneezes” today and states the same as his local FED representatives have done, it would mean a further strengthening of the USD.

A weaker Euro and Yen over the last few hours seem to indicate that this is what markets expect. After the Japanese Economy minister talked the Yen up earlier in the week, he seems to have been reprimanded by superiors, and the Yen continues its free fall. The International Monetary Fund, IMF, in a report today, urged Swiss authorities to weaken the Franc by unwinding its currency reserve funds. The Franc has already depreciated 3,7 % towards the Euro in 2013.

Precious metals continue to fluctuate, wildly searching for direction. The large increases in gold and silver throughout Asia and early European trade was quickly eaten by new steep falls. Oil prices keep steady. Smaller than expected English inflation strengthened GBP and gave the markets hopes for loser monetary policies, meaning more money printed by the Bank of England.

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23 MAY 2013: BERNANKE TAKES USD TO NEW HIGHS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The head of the federal Reserve, FED, Ben Bernanke’s statement to Congress caused markets to fluctuate wildly yesterday. Bernanke’s comments initially had a positive impact on the stock markets when he stated that it would have unpredictable consequences for the US economy if FED’s bond buying program was terminated in the near future.

The bond buying program has boosted the US and global stock markets, but has so far failed to create new employment. FED had earlier stated that the bond buying of USD 800 billion collar will end when the unemployment has reached 6,5 %. It now stands at 7,6 %. This statement was initially seen by markets as a continuation of the bond buying that has boosted global equity markets.

At the same time Bernanke indicated that the termination of the bond buying might be on the immediate cards.. These comments were supported by the minutes from the April/May FED board meeting opening for a termination of the bond buying within the near future. This resulted in a steep fall in US stock indexes. Dow Jones fell from 16 464 down to 15 307 with equal immediate drops in S&P and Nasdaq.

The USD jumped to 103,73 Yen a Dollar. The DXY, a basket of currencies against USD, raised to a record high of 84,27, Euro/USD jumped to 1.2854 as Swiss Franc weakened both towards Dollar and Euro. The Australian dollar trades at its lowest level in a year. Precious metals have fluctuated wildly through the New York session with gold trading between USD 1369 and 1416. Silver reached USD 23,20 to fall back to 22,27. Oil prices remain steady.

Bernanke’s statement boosted global stock markets. Dow Jones immediately increased to a record high of 15 464 with equal jumps in European equities.

Copyright: MAYZUS Investment Company Ltd

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24 MAY 2013: SERIOUS MELTDOWN IN GLOBAL EQUITIES

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Dubious signals from the US Federal Reserve, FED, on continued monetary easing, and disappointing Chinese PMI numbers (a barometer on business leaders optimism), led to a serious meltdown in global equity markets yesterday. The Japanese Nikkei plunged 7,32 % with more modest losses in Europe, where London and Frankfurt indexes lost 2 %.

While FED’s Ben Bernanke testimony to Congress, warned against a premature end to the bond buying program, FED’s April minutes pointed to a split between those who want a quick termination of the program and those siding with Bernanke. Monetary easing has been the driving force behind the last months steep increases in equities.

It is natural to see the steep plunge in Japan as a result of a doubling in stock prices over the last half year and the latest aggressive stimulus policies. Globally, there have been increased worries among investors as to whether equity markets, running ahead of fundamentals, are creating a dangerous bubble. With news of an end to monetary easing and problems in China this created risk aversion and a sell off..

The fall in the US-indexes were modest following the onslaught in other markets. The last published jobless claims at 340,000, are 5000 fewer than expected. There is still a long shot to the 6,5 % unemployment target set by FED, but fewer jobless claims would give the proponents of an early end to the bond buying programs new arguments.

Oil prices which have kept surprisingly steady over the last month, decreased more than two dollars a barrel.

EUR/USD got support from higher than expected PMI indexes. As a result, EUR/USD from level of opening - 1,2855 was rolled away to a maximum of 1,2956 and this morning we can see pair traded on a level of 1.2932. GBP/USD behaved more frostily against volatility of both currency pairs and share indexes. Having reached quite strong support on 1,50 the previous trading day, pair showed moderate correction. The most important question of today is- whether the Yen finished it's decline? Taking into consideration all the factors, pair can quite roll down to the area of 100.00.

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27 MAY 2013: INVESTORS LOSE OUT DUE TO BAD TIMING

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Stocks took a breather last week after signs of cooling in China, and what some investors saw as a possible change in FED policies. The Nikkei, which has soared since last November on hopes of economic revival, was the hardest hit with Thursday’s 7,32 % fall. Other Asian and European markets dropped as well, but not so dramatically, raising questions whether the bull market has come to an end.

Some investors blame FED-chairman, Ben Bernanke for the turmoil. Others point to a seeming difference between Bernanke and the board’s published minutes for late April. Investors might, however, blame themselves for unrealistic expectations and their gamble on a change in FED’s policies.

Investors have different motives in their bet for a change. Some are appalled by FED’s money printing and that there is no predicted hyperinflation. Others hoped that Bernanke’s monetary experiments would be abandoned. Such abandonment would have meant that President Obama’s entire economic policy had failed. The third and biggest group of Wall Street investors simply blame themselves for missing out on the stock rally. The general indexes have beaten the hedge funds three times since January.

No wonder many of them are frustrated. Fat bonuses this year might hang on their own wishful thinking for a quick change. Change depends, however, on objective analysis, and a correct reading of Bernanke’s careful wording. In his testimony last week, Bernanke repeated word for word what he stated since last September.

FED will continue to buy 85 billion of bonds monthly till the 6,5 % target for unemployment and a steady growth is established. The US economy is not quite there yet. It might well take another 8 – 12 months. The grunting from dissatisfied FED board members is not something new.Their hopes for a change in policies have been reflected in the last eight FED minutes.

There will, of course, be a change. But the timing will be decided by economic data and FED’s consideration. Investors lost billions of dollars last week on a wrong bet on the timing for a change. By now, they have hopefully swallowed their anger and are ready to meet markets which are hopefully back on track, ready for rallies and continued new highs.

Copyright: MAYZUS Investment Company Ltd

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28 MAY 2013: JAPANESE STOCKS FALL AS YEN SOARS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Japanese stock market continued to fall another 3,25 %, after Friday’s dramatic 7,32 % fall. The US dollar simultaneously witnessed its worst week against the JPY in one year, dropping from 103.50 to 101.09 Yen a Dollar on Friday.The Yen traded even lower yesterday, dipping below 101 at one point.

Western European equity markets have recovered from the downward shock at the end of last week. The French index jumped 0.97 % during yesterday’s trade, and Germany’s Frankfurt index added another 0.85 %. Nordic equities were strong while the British FYTSE lost 0.64 %. Developing markets also recovered with India jumping 2.47 %.

The Australian Dollar continues to fall, and trades just above 96 against the USD, on news that China has no intentions to stimulate growth at the expense of environment. The fall in the Chinese PMI last week had a further negative effect. Australia is dependent on coal export and Chinese growth. For Australia, its alarming that China is said to cut down on coal and encourage gas and solar energy to fight pollution.

The Euro/USD is strengthened and close to break through both the 21 and 50 days moving averages, helped by lower yields on Italian and Spanish bonds. The recent sharp downturn in USD/JPY is seen by analysts as a correction after huge amount of speculative Dollars gambled on a lower Yen. The strength of the yen is, however, temporary, and the weakness in the Japanese currency is bound to continue.

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29 MAY 2013: USD RALLIES ON STRONG DATA

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

US Dollar rallied against the Euro and Japanese Yen on strong consumer confidence, home prices accelerating to the highest levels seen in seven years. EURO/USD fell to 1.2874 while USD/JPY plunged to 102.58. Dow Jones jumped 92 points to 15.395 while the technology index Nasdaq added 0.62 %. The yield on US 10 years treasuries, simultaneously, reached a one year high.

After three losing sessions, global equity markets performed strongly. The Japanese Nikkei were up 1.3 % on Tuesday after a two day dramatic 10 percent plunge. All the European stock exchanges rose, UK being the strongest, with a 1.83 % increase. English and US markets were closed on Monday due to Memorial Day.

The equity rally came as central bankers in Germany and Japan confirmed their willingness to continue monetary easing. A German member of the European Central Bank (ECB) stated that the loose monetary policies would last for as long as it takes to get the Western European economy back on track. A representative from Bank of Japan issued a similar statement.

These strong statements will probably encourage more risk taking in higher yield assets financed through so called carry trading; cheap loans in Japanese Yen. While increased consumer confidence and higher home prices strengthen the USD, looser ECB monetary policies will lead to a weaker EURO/USD. A fall below the long traded interval,1.28 – 1.32, seems likely.

Japanese Yen is probably going to fall further as the short lived Yen rally indicates. The weakness in the Yen is there to be continued. Currency analysts are predicting within three months 106 Yen to the Dollar, and expect a further plunge to 109 within six months. Bottom levels are as low as 120 – 125 Yen a Dollar and seem likely in 2014.

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30 MAY 2013: JAPANESE NIKKEI INDEX IS AGAIN AN OUTSIDER.

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

After couple of days of moderate growth, the decrease at the Asian stock markets was resumed. Support to sellers is given by the Yen growth, though in the debt market - profitability of 10 year bonds, was a little far away from maximum levels previously reached. The reason for this, could be the speech from the chairman of the Central Bank, Haruhiko Kuroda, who declared intention to decrease volatility in the debt market, and also decrease interest rates by means of a monetary easing program in the long-term prospective. As a result, Japanese Nikkei lost -5.14% and USD/JPY decreased to 100.72 this morning.

The Eurozone prepared an unpleasant surprise yesterday- data on the labor market which showed growth of the number of the unemployed by 21 thousand against the expected 4 thousand. However, it couldn't roll EUR/USD, which, towards the end of the day,returned to the day’s maximum levels, having reached 1,2977 and having rolled away to 1,2940 by the close.

There are some statistics which could influence further development of the EUR/USD pair. We are not expecting any changes of GDP (Gross Domestic Product) of the USA, but the number of the unemployed who have submitted applications for receiving a grant, is interesting, especially in the light of Rosengren's statements yesterday from FRS, in which he noted that it is possible to reduce the volume of the buying up of bonds, if the indicators from the labor market and on the economy, will, in general, be stable for few more months. The lower the unemployment figures will be,the higher chances EUR/USD will have to return to testing of support on 1,2850.

Prices of oil following the results of the last trading session showed negative dynamics. Besides a noticeable decrease in the developed stock markets, deterioration of forecasts on the development of the economy of the two largest consumers of raw materials - the USA and the People's Republic of China, became one of negative factors. Also, according to yesterday's data from the American institute of oil (API) stocks of oil increased by 4,4 million barrels. As for gasoline, the volume of stocks grew by 1,94 million barrels. Today, price for Brent is 102,36$ and price for WTI is 92.87$.

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[MAYZUS.Neeraj]

31 MAY 2013: NEW RALLY IN CURRENCY MARKET – EURO PREVAILS OVER DOLLAR

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

All conditions were created for a rally of EUR/USD: reports from the Eurozone were better than forecast, and at the same time for the USA – worse than predicted. The result didn't keep itself waiting for long, the pair could go above the strong resistance level at 1.30, although it reached a maximum on 1.3061 and finished the trading session around 1.3040. It is quite interesting actually, that the data from the USA were not as dire as predicted, and the Eurozone in general was not presenting something really satisfying or exceptional. The conclusion comes by itself – the overbought USD gives power to the Euro.

So, GDP (Gross Domestic Product) of the USA in 1 quarter was reconsidered to fall from 2,5% to 2,4%, and the number of the unemployed who have submitted an application for receiving a grant, grew to 354 thousand. It is absolutely not enough to frighten Bernanke, but it is quite enough to provoke investors to close long positions on USD on tops. This also gave support to the British Pound and GBP/USD from the level of opening at 1.5129 pair reached a maximum of 1.5219, having finished the trading session around 1.52.

After disappointments with the labor market in Germany, today it is worth looking at the data on retails in the country. Usually there is direct correlation: there is no income – there are no expenses, however analysts predict the indicator’s growth, so tension in the market increases. If sales volumes will really increase, it will give additional support for further strengthening of EUR/USD to the next resistance levels on 1.3070 and 1.3110.

In relation to Japan today, it is worth acknowledging the statement of IMF (International Monetary Fund), in which it completely supported the current monetary policy of the country, and stated extensive prospects of its further realization. Furthermore, the problem with growth of profitability of state bonds is considered to be completely controllable. Asian stock markets started the day positively, however, by this time, buyers confidence had already evaporated. Japanese Nikkei slightly restores yesterday's losses, while the Hong Kong’s Hang Seng again looks worse than its"colleagues".

Prices for precious metals are stable, with Gold on 1417.08$ and Silver on 22.74$. Prices for oil are slightly down, with Brent on 102.07$ per barrel and WTI on 93.47$. Today the next meeting of representatives of member countries of OPEC becomes a key event of the day in the oil market. Questions on the current quotas of production, and also the increase in production of oil in the USA will be discussed. America now produces record volumes of oil, thereby reducing the dependence from former exporters.

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[MAYZUS.Neeraj]

03 JUNE 2013: ASIA FALLS ON PROFIT-TAKING

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian shares fall on profit taking Monday after recent highs. Uncertainty over how much longer the current US stimulus will continue, still dominates the agenda at the start of a new trading week.China’s last PMI figures (Purchasing Manager’s Index) published during the weekend, creates concern in light of softening domestic and external demands. More US-data this week might give a clue as to growth and demand prospects and will hopefully show some direction in regards to how long the monetary easing will last.

The dollar index rose last week on investors bets that improved data on the US economy would encourage the Federal Reserve (FED) to reduce monetary stimulus, which have boosted investments into riskier assets as emerging market currencies. The South African Rand, Mexican Peso and Hungarian Forint were hardest hit against the dollar in a volatile week in the currency market that saw investors reduce their exposure to risk-related assets.

The New Zealand Dollar fell more than any other developed currency after their Reserve Bank Governor stated that the Kiwi dollar still remained overvalued. Further currency interventions were thus needed to weaken the Kiwi.

The Euro/USD gained substantially last Thursday, but fell back due to the unemployment figures published on Friday. The unemployment rate in the Eurozone hit a fresh record high at 12.2 percent in April. Youth unemployment is reaching alarming levels. Euro/USD trades at 1.3013 in the morning. The President of the European Central Bank (ECB), Maro Draghi, said that the Eurozone economy is on track for a recovery driven by ECBs loose monetary policy, and outside demand.

Japanese Yen is up against USD at 00.48 amid a bout of profit-taking by investors last week. GBP is steady at 1.5217. Oil prices are under pressure, but Brent crude is still trading above USD 100 a barrel. Gold prices are slightly up at USD 1395.

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[MAYZUS.Neeraj]

04 JUNE 2013: DOLLAR DROPS ON NEW DATA

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The US Dollar suffered a serious setback and dropped to one-month lows against a basket of major currencies on Tuesday after the index on the US- manufacturing fell for the first time in six months. National factory activity sank to the lowest level seen since 2009.

The disappointing data curbed speculation that the Federal Reserve (FED) would scale back its stimulus anytime soon. The dollar index, against a basket of major currencies, DXY, fell one percent as the Japanese Yen strengthened. USD/JPY dipped below 100 for the first time in weeks at 99.70.

Long positions on USD are, therefore, likely to remain under pressure until Friday’s job reports. The unemployment numbers will have to beat the expected forecasts of 165,000 less unemployed significantly, to revive the upside momentum in the USD, analysts say.

The renewed pressure on the dollar saw the Euro/USD above the 1.31 level for the first time since May the 9th. The Euro has fallen back to 1.3063 in the early Asian trading session. USD/JPY fell as low as 98,86 and has lost 4.5 %, 4 % from the high on 103,74 set last month. The dollar’s fall against other currencies, which had lately lost ground against the dollar, was even more dramatic. The Australian dollar rallied more than 2% close to parity with the USD at 99.92.

The US data led to a turnaround in Asian stocks which recovered from their lowest levels in half a year. The Japanese Nikkei has fallen as much as 15% over the last two weeks. The American indexes fell due to the disappointing manufacturing data. Oil and gold prices are steady compared to yesterday. Gold is at USD 1411 an ounce and Brent crude trades at USD 101,89 a barrel.

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05 JUNE 2013: US AND ASIAN STOCKS DECLINE ON FED UNCERTAINTY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian stocks slipped to their lowest level in 2013 as uncertainty over when the US Federal Reserve (FED) would begin scaling down its massive stimulus program. Siince 2008, FED has injected 2,5 trillion dollars into bonds to boost the economy. The increased liquidity has mainly benefited US-stocks which have reached new highs, but also led to an inflow of US-funds into Asian and other markets. There are now increased worries, especially in Asia, about funds flowing out of the region.

Over the past few days, this trend has been reflected in a stronger Japanese Yen (JPY). Foreign funds have, for the last few months, been injected into a rapidly increasing and profitable Japanese stock market. Foreign capital is now taking profit and selling Yen with the effect that the JPY has increased 4 % in the last few days in relation to USD. USD/JPY fell below 100 on Monday, recovered early during Wednesday’s session, but later dipped back to 99.2 Yen to a Dollar.

US stocks ended even lower on Tuesday, resuming their recent decline, as investors sold growth-oriented sectors on speculation the Federal Reserve may slow down the pace of its economic stimulus. The indexes have fallen 2 percent from their peak on May 22nd as investors take profit. Dow Jones was down 0.50 % at 15 177. A top US-official, critical to the bond buying program, stated yesterday that FED is poised to re-evaluate and possibly make changes to its massive monetary stimulus.

FED Chairman, Ben Bernanke, has been consistent in his comments on monetary easing and stressed that proof of a real turnaround in US economy reflected in an unemployment target of 6,5, which is necessary before making changes. After the disappointing manufacturing data earlier this week, the jobless claims presented on Friday might prove decisive for whether the stimulus program is going to be continued until the end of the year.

The Dollar recovered from an early-week selloff on Wednesday while the Australian Dollar plunged to a 19 month low on the back of disappointing growth data. Euro/USD is at 1.3086 back from a one-month high on 1.3108.There is strong technical resistance at 1.3141. Oil prices are up. NYMEX is at 93,63 and Brent crude trades above USD 103 a barrel.

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[MAYZUS.Neeraj]

06 JUNE 2013: YEN JUMPS AS WALL STREET FALLS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Yen rose sharply early Thursday. USD/JPY dropped to 99.00, up more than one percent since yesterday. Commodity currencies are under strong pressure with the Australian Dollar at a 19-month low. The currency volatility follows a steep fall in US stocks Wednesday extending the previous days sell-off. Dow Jones dipped under 15.000 due to concerns that the US Federal Reserve, FED, may scale down its bond-buying stimulus when the economy is still sluggish.

The sell-off on Wall Street was broadly based with four decliners to one advancing stock. The selling might suggest that the seven-month stock rally is coming to an end. The S&P 500 has fallen 3.6 percent since its peak on May the 21st, one day before Ben Bernanke indicated that FED might taper its stimulus if economic data shows traction. The jobless numbers and unemployment statistics to be presented tomorrow are therefore crucial.

Both Dow Jones and Nasdaq registered their biggest percentage drops in six weeks. Most Asian markets suffered similar falls and slipped to fresh lows. Economic data has recently been mixed. Investors fear that FED will reduce their monetary easing before the economy is back on track, in spite of clear FED statements that the stimulus will continue until unemployment is reduced to 6.5 %. A report yesterday showed that private employers created far less jobs in May than the 160,000 predicted. The figures are a strong argument against changes.

The long term bullish outlook on the USD/JPY remains. Analysts don’t predict steeper falls from here and still see 120 as likely in 6 – 12 months. EUR/USD is resilient, reaching 1.3118 yesterday before falling back to 1.3095. The stronger Euro comes ahead of ECBs policy meeting. ECB will probably consider whether it is necessary to take fresh action in order to secure the expected recovery of the euro zone in the second half of 2013.

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[MAYZUS.Neeraj]

07 JUNE 2013: DOLLAR PLUNGES IN BROAD SELL-OFF

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Dollar plunged against the Euro, Japanese Yen, and other currencies as investors reduced bets on the greenback on concerns that today’s US jobs report will disappoint. Euro/USD trades at 1.3262. American stocks fell in tandem with a weaker USD, but rebounded to end in positive territory. Dow Jones added 0.53 % to climb back above the 15.000 level. Nasdaq gained 0.66 % to 3 424. The changes seem to be technically driven by psychological factors.

A poll amongst economists expects 170 000 new jobs could've been added to the US economy in May with an unemployment rate of 7.5 %. Fear of a weaker than expected job report prompted, however, investors to unwind bets on a stronger Dollar that had been profitable for months. Gold prices, which have been under strong pressure for months, suddenly rose 1 percent to USD 1412 an ounce as investors sold long positions on the Dollar.

The Euro gained after the European Central Bank, ECB, left interest rates unchanged. ECB President, Mario Draghi, stated that further monetary support was unlikely in the near future. ECB has kept interest rates at a record low of 0,5 % waiting for a turnaround in the Euro zone. Bank of England have also chosen to leave their loose monetary policy unchanged. British Sterling, GBP, has jumped against the Dollar at 1,5612 and gained substantially during the last few days from low 1.51 levels.

Concerns that key US job data will disappoint sent the Japanese Nikkei into bear territory in Asia this morning. The Nikkei plunged 1.9 % to a two month low. Nikkei has lost 20 % from a five-and-half-year high, just two weeks ago. Other Asian stocks failed to capitalize on overnight gains in Wall Street. The Asian Pacific MSCI-index fell 0.6 % to its lowest level since November. The fall in equities seem to indicate a stronger appetite among investors for safe haven bonds. The yield on U.S, German and Japanese bonds have risen recently.

Oil prices are higher on the back of a weaker Dollar. Brent crude trades close to USD 104 a barrel, up from the USD 100 mark earlier in the week.

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

12 JUNE 2013: USD/JPY REBOUNDS AFTER STEEP FALL

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Dollar steadied against the Yen on Wednesday, suffering its biggest drop in three years yesterday. USD/JPY trades at 96.44, sinking as low as 95.60 in the previous session. The 2.7 % fall marked the biggest one-day drop in the USD/JPY currency since May 2010. The Dollar continued to slip against the Euro at 1.3307. The Dollar index DXY steadied after slumping to a four-month low of 81.034. The weakened Australian Dollar gained 0.4% and trades 0.9469 to a USD.

Bank of Japan (BOJ) disappointed investors hoping for an extension in the maximum duration of its fixed-rate loans, similar to the European Central Bank (ECB) long term financing operation. Such extension would have been aimed at quelling the volatility in the bond market. The market expected such a move. When that did not happen, the Yen sellers had to liquidate short positions. Yen buying was strengthened by exporters shrinking purchases of the Dollar.

The volatility and tumult in the Japanese bond market have raised worries that it could undercut the Abe government and BOJ’s efforts of monetary easing. USD/JPY had, until the recent turnaround, fallen continuously from 80 to 103.65 Yen to a Dollar. The weaker Yen gave Japanese export a welcomed boost, but most of this advantage has been eaten by the stronger Yen experienced in June.

The US and European stock markets tumbled yesterday on nervousness over FED’s monetary easing exit strategy. Dow Jones and Nasdaq fell from 0.76 to 1.06 %. At the General Assembly of Facebook, CEO, Mark Zuckerberg, faced a barrage of questions about the stock price. Facebook’s shares have fallen 37% since its introduction. In Japan, the Nikkei index fell below 13.000 as the strong Yen dragged exporters down.

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

13 JUNE 2013: ASIAN MARKET PLUNGES WITH STRONGER YEN

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Dollar plunged to its lowest level in ten weeks against JPY at 94.81, while the Asian stock markets experienced one of its worst one day down falls. All the Asian markets ended in red territory with the Japanese Nikkei 500 index falling as much as 5.3 %. Tumbling Japanese shares accelerated the fall of the Dollar as Nikkei- investors continued to unwind earlier hedges against a weaker Yen. The Dollar has lost 8.6 % since hitting a four year high of 103,74 on May 22.

The latest developments demonstrate the gamble involved in Central Bank’s monetary easing. Investors have snapped up Japanese shares between mid-November and May, as a weaker Yen promised to fatten exporter’s overseas revenues. Now a stronger Yen threatens to do the opposite, leading to further sell-offs in the Nikkei. The tumults in Asia come on top of uncertainty about whether the US Federal Reserve (FED) will pare back its stimulus program buying bonds and treasury bills. Japanese bond selling is adding to the pressure on the currency.

The fall in Asian shares followed a weak session in New York. Dow Jones Industrial was down 0.84 % while the technology heavy Nasdaq lost 1.06. The Dollar lost 0.3 % against a basket of currencies, DXY, ending at 80.741 after falling below 80.651, a level not seen since February. The Dollar has lost 4 % since its three-year high on May 25th. Adjustments in overextended long USD positions rather than a changing perception of US growth and Fed outlook, seems to be behind the weaker Dollar.

Weakness in the Dollar saw the Euro climb to a near four-month high of 1.3370. Euro/USD trades now at 1.3356. It is difficult to explain the stronger Euro, the recession in the Euro zone taken into account. Recent polls show, however, that a majority of analysts believe that ECB will keep the interest rate at the present level. Optimists are also suggesting that the euro zone will return to modest growth later this year.

Copyright: MAYZUS Investment Company Ltd