June 1, 2022 Bulltick Research and Strategy

Kathryn Rooney Vera

Head of Research & Strategy
krooney@bulltick.com
+1 786.871.3758

Gregan Anderson, CFA

Macroeconomic Strategist
ganderson@bulltick.com
+1 786.871.374

Global Cross Asset Strategy:

Recession Inevitable But Not Imminent

Of the recessionary indicators we follow closely, the majority do

not yet point to imminent or near-term recession. Economic
contraction is part of the economic cycle, and we maintain our
conviction view that we are in decelerating part of the cycle,
having reached (and passed) the peak. However, we believe
recession is not a 2022 event and much depends on the Fed.

Consumer confidence measures are showing warning signs on

the future of the US consumer. Inflation is forcing more dollars to Chg In
Past 2 YTD End- 2022

exit purses and the savings rate to decline, which we saw Asset
USG10Y
Spot

2.93
Weeks

+5bps
Change

+142bps
Target
2.75

demonstrated in last week’s US savings rate data. USG30Y

JGB10Y
3.09

0.24
+2bps

-1bps
+118bps

+17bps
3.25

0.10
DXY 102.50 -1.26% 7.14% 98.00
EUR 1.07 1.83% -6.28% 1.18

What could speed up or slow down the Fed’s two-pronged policy JPY 130.15 -1.47% -11.57% 115.00
MXN 19.69 1.79% 4.29% 20.50
tightening? Read on for our analysis. Listen to our markets BRL 4.80 3.50% 16.00% 5.20

outlook and recession analysis here.

SPX 4124 5.11% -13.47% 4700
IBOV 111689 5.12% 6.55% 120000
MEXBOL 51475 2.15% -3.37% 56000
Brazil 10Y 12.69 +24bps +190bps 11.75
Mexico 10Y 8.68 -17bps +112bps 8.50
MXEF 1078 4.31% -12.53% 1450
Gold 1848 1.71% 1.00% 1950

WTI Crude 115.1 5.06% 53.09% 110.0

As of 06/01/2022

Fixed Income….….……..6
Forex……….…..…………….8
Equities………..…………..10
Alternatives……..…...….12
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Recession indicators. The labor market is remains non-threatening, with the 6month/24month cross
of the labor market conditions index still far from triggering:

Kansas City Fed Labor Market Conditions As Recession Indicator

US Recessions Indicator KC Fed Labor Market Conditions Index 6mma 24mma
2.0 160
1.5 140
1.0
120
0.5
0.0 100

-0.5 80
-1.0 60
-1.5
40
-2.0
-2.5 20

-3.0 0
Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 Jan-22

Source: Bloomberg, Bulltick

The unemployment rate indicator trigger is when unemployment crosses the 12mma:

NFIB jobs 6m/24m cross does not point to imminent recession:

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Of course, all of these labor market indicators are a function of the pandemic, which saw very
extreme, very short-lived disruptions to trends, which are still being phased out in the moving
averages. But others are also encouraging, such as the Consumer Confidence crosses, and housing:

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Residential Construction Vs 6mma As Recession Indicator

US Recessions Indicator Residential Construction 6mma
1,300.0

1,100.0

900.0

700.0

500.0

300.0

100.0

-100.0
Feb-56 Feb-60 Feb-64 Feb-68 Feb-72 Feb-76 Feb-80 Feb-84 Feb-88 Feb-92 Feb-96 Feb-00 Feb-04 Feb-08 Feb-12 Feb-16 Feb-20

Source: Bloomberg, Bulltick

Loan growth is one of the indicators more directly impacted by Fed hikes. Historically, recessions are
associated with steep declines in loan growth and a tightening of lending standards. That loan growth
fell so much before the hiking cycle began seems to indicate that the Fed is going to have a hard time
impacting it, apart from causing loan recovery to be slower. Another indicator that the transmission
mechanism is shaky this cycle. Firms have plenty of cash on hand and are less likely to need financing.

US--Commercial/Industrial Loan Growth As Recession Indicator

US Recessions Commercial/Industrial Loans, % chg y/y Zero line
40.0%

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%
Oct-83 Oct-86 Oct-89 Oct-92 Oct-95 Oct-98 Oct-01 Oct-04 Oct-07 Oct-10 Oct-13 Oct-16 Oct-19

Source: Bloomberg, CBO, Bulltick

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US--Percent of Banks Tightening Standards, Delinquency

US Recessions Net % of Banks Tightening Standards for C/I Loans (LHS) Comm/Ind Delinquency Rates, % (SA) (RHS)
100 7

80 6

60 5

40 4

20 3

0 2

-20 1

-40 0
Apr-90 May-92 Jun-94 Jul-96 Aug-98 Sep-00 Oct-02 Nov-04 Dec-06 Jan-09 Feb-11 Mar-13 Apr-15 May-17 Jun-19 Jul-21

Source: Bloomberg, Federal Reserve, Bulltick

Fed Analysis - If the Fed hikes rates and rolls off bonds too aggressively, near term risks of recession
rise. So far the Fed has appeared ready and willing to hike rates including at a 50bp clip, even
considering 75bps. But what could cause the Fed to pull up the reins from its double whammy of QT
and rate hikes this year, i.e. What could make the Fed more dovish?

Double barreled tightening refers to rate hikes and balance sheet unwind. Futures indicate markets
expect fed funds at 3.00% by early next year. Meanwhile, starting this month, the Fed is set to let
bonds roll off to $95 billion/month. That is a lot. On both fronts.

The Fed got behind on inflation. Now they either hike and tighten (QT), risking a recession or stand
down and let inflation do what it’s going to do anyway. BullTick research estimates inflation to end the
year at 4.7% (core PCR). We contend that the Fed has limited control over the Cpi basket anyway (and
not just census of oil, food, and supply change disruptions!). That means if they suddenly and
belatedly become inflation fighters now they run a real risk of throwing the economy into recession
sooner.

What could cause the fed to slow up on the double-barreled monetary policy tightening? Our
thoughts: 1) bear market, big correction, credit gaps out as tightening financial conditions blow out
spreads and equities markets 2) a rollover in the job market. Unemployment jump is a leading
indicator of recession. Fed likely pause is simultaneous rate hikes and QT. 3) Rates have already risen
from USTs to mortgages to consumer loans, and with only 75bps in rate hikes (from 0%.) These higher
rates and tightening financial conditions could (should) slow economic growth so the Fed doesn’t have
to take rates up as much as consensus expects (more or less 250bps for entire 2022).

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Fixed Income Strategy:

▪ In the past month, US Treasury yields have again seen Developed Markets 10Y Total Returns
significant movement, trading within a 40-50bps range.
Early last month the 10 year note broke the top of the 2-week return YTD return

range, trading abov e 3% after the Fed's comments and on

the back of strong employment data. The 3.19% print on 0.4% 0.3% 0.2%

May 9th was the highest yield on the 10 year note since -0.2% -1.2% -1.3%
2018. This yield ascent made an already-beaten up fixed
income asset class suffer more.
-11.1%
-12.7%
▪ From nearly 3.20% in early May to 2.73% towards the -17.0% -16.4%
-18.1% -18.4%
end of the month, both technical factors and poor Germany France Italy US UK Japan

economic data were the main drivers of UST yield

movements. "Recession" is the new zeitgeist in market EM Local Currency Bond Total Returns
chatter. Our trading desk reports that moves of this 2-week return YTD return
magnitude (40-50bps) normally would incite some
significant buy ing into the bond market, but given the 12.2%
6.4%3.8% 3.9%
3.3% 3.1%5.3%
speed of the move and uncertainty in the markets, flows 0.4%

have been moderate. -0.9%

-2.5%

▪ In a decelerating economy combined with rate hikes and

a Fed in "quantitative tightening" mode, fixed income is -29.2%
-31.8%
an asset class that will cont inue to suffer. We expect that Colombia Chile Peru Mexico Brazi l Argentina
2030 2030 2029 2029 2029 2026
higher financing costs combined with an increasingly
difficult environment to generate profits will lead to some
EM USD-Denominated Bond Total Returns
debt defaults. For this reason, our House view is that
today more than ever it is critical to be positioned in 2-week return YTD return

names that have good fundamentals and that can 15.7%

withstand rising rates and low demand.
4.6%
2.4% 1.8% 1.8% 1.6% 1.2%

-7.5% -6.8% -6.0%

-10.4% -10.1%
Colombia Mexico Peru Chile Brazi l Argentina
2029 2028 2030 2028 2030 2028

B e nc hm a rk A s s e t B e gin- 2 0 2 2 C urre nt Y T D Int e re s t Y T D C a pit a l Y T D F o re x T o t a l Y T D 2 0 2 2 T a rge t 2022

YT M YT M G a ins , % G a ins , % G a ins , % R e t urn, % YT M R e t urn, %
UST 10Y 1.51 2.94 0.59% -11.71% - -11.12% 3.00 -11.33%
German 10Y -0.18 1.14 0.00% -11.48% -6.29% -17.05% -0.20 4.02%
Japan 10Y 0.07 0.22 0.04% -1.42% -11.52% -12.74% 0.10 -0.14%
Mexico MBONO 2031 7.56 8.68 3.23% -6.96% 4.27% 0.38% 8.50 1.72%
Mexico USD, 2031 2.95 4.53 1.15% -11.59% - -10.44% 3.10 1.48%
Brazil BRL 2031 10.84 12.69 4.41% -4.91% 16.27% 15.70% 11.75 17.14%
Colombia TES 2031 6.34 10.64 2.96% -23.66% 8.43% -14.01% 8.00 1.37%
Chile CLP 2032 5.65 6.28 2.45% -2.01% 3.39% 3.85% 6.00 9.33%
Argentina ARS, 2026 49.55 57.43 15.35% -13.67% -14.43% -13.00% 50.00 -6.05%
Peru Soberano 2031 5.90 7.53 2.73% -10.44% 7.35% -0.94% 6.00 8.54%

Source: Bloomberg, Bulltick. All returns are in USD As of 06/01/2022

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We expect Treasury rates to be range bound (2.70% to 3%) in the near-term months due to a
decelerating economy; it is very likely that the FED will have to be less aggressive in its double-
barreled policy response to high and sticky inflation. In the fixed income space, our House view favors
a more defensive tilt to a portfolio in terms of both sectors and in terms of debt serviceability. We are
keeping a close eye on thee yield curve, which has come up from inversion on the 2s/30s space back
into positive territory.

30 and 2 Year Bond Yield Spread

US Recessions 2Y Yield 30Y Yield Spread (RHS)
18.0 5

16.0
4
14.0

12.0 3

10.0
2
8.0

6.0 1

4.0
0
2.0

0.0 -1
Sep-83 Sep-86 Sep-89 Sep-92 Sep-95 Sep-98 Sep-01 Sep-04 Sep-07 Sep-10 Sep-13 Sep-16 Sep-19

Source: Bloomberg, Bulltick

Credit spread blowouts and the potential for a more signficant drop in equity markets could put the
Fed on hold in terms of its rate hike and asset rolloff. Credit risk concerns have yet to peak, as
illustrated by HY corporate bond spreads over USTs, which have continued to climb. As growth
concerns increasingly accompany inflation concerns in the minds of investors, we expect such trends
to persist.
US HY Corp 10Y Bond Spread Over UST
12.0
US High Yield 10-Year Corporate Bond Spread, bps 12mma
10.0

8.0

6.0

4.0

2.0

0.0
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

Source: Bloomberg, Bulltick

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FX Strategy:
▪ Poor inflation prints and bets on a hawkish Fed have
Developed Markets, FX Spot Returns
moved DXY higher against all majors and EM FX in recent
2-w eek return YTD re turn
trading. The hand of the Fed has indeed been forced as
we in Bulltick Research have been forecasting for some 6.4%
time because the Fed got behind inflation and 4.9%
2.5% 2.1% 1.9%
miscalculated its drivers. Now the question is how far will
the Fed hike and much will it allow to roll off its balance
-0.1% -0.3%
sheet before inducing recession in the US economy. The -1.9%
-3.1%
USD strength of late is due to the high interest rate -5.7%
-6.9%
differential it enjoys over peers in Europe and Japan. USD -10.5%
will remain strong this year as that differential continues EUR GBP CAD JPY DXY CHF
to be wide.
Emerging Markets, FX Spot Returns
▪ JPY has been particularly hard hit, trading at a two-week
2-w eek return YTD re turn
low v. USD, breaking 130 and falling the most in the G10 17.4%

currencies in the past two weeks. It is all about interest

7.9%8.8% 8.1%
rate differential with divergent central banks; the Fed is
3.9% 3.5% 4.0%
hawkish and the BOJ remains ultra-dovish. We expect 2.0% 1.7% 1.1%

these trends to continue for the rest of the year.

-1.2%

▪ Hit by risk-off sentiment, LatAm FX has seen an off two

weeks with heavyweight Brazil leading recent losses -14.4%

(despite remaining the best performing currency YTD the COP BRL PEN CLP MXN ARS

region) as the market prices in a smaller carry for EM FX as

Emerging Markets, FX Carry Returns
the Fed hikes rates. Its commodity status and the massive
interest rate differential versus the USD favor the Real and 2-w eek return YTD re turn
we see the SELIC of 12.75%, and likely to move yet higher 22.9%

to 13.25%. Brazil faces presidential election in October but

either outcome we think is market neutral. WE believe
Lula will win and this is already baked into prices. Stay
10.1% 9.7%
positive BRL. 7.3% 7.5%
6.2% 6.9%
4.2%
1.9%
1.1% 1.1% 0.3%

COP BRL CLP MXN PEN ARS

Asset Begin 2022 Current YTD Spot YTD Interest End-2022 2022 Expected 2022 Expected
Return Gains Target Spot Return Total Return
DXY 95.7 101.8 6.4% - 95.0 - 0.7% -
USD/EUR 1.14 1.07 - 5.7% - 0.20% 1.18 3.8% 3.3%
JPY/USD 115.1 128.6 - 10.5% - 0.03% 115.0 0.1% 0.0%
CNY/USD 6.36 6.67 - 4.7% - 6.50 - 2.2% -
MXN/USD 20.52 19.72 4.0% 3.14% 20.50 0.1% 7.9%
BRL/USD 5.57 4.75 17.4% 4.94% 5.20 7.1% 23.6%
COP/USD 4,122 3,787 8.8% 2.51% 3900 5.7% 13.7%
CLP/USD 852.0 823.6 3.5% 2.91% 800.0 6.5% 14.2%
PEN/USD 4.00 3.70 8.1% 1.73% 3.90 2.6% 8.8%
ARS/USD 103.09 120.48 - 14.4% 26.07% 140.00 - 26.4% 10.3%
So urce: B lo o mberg, B ulltick. No te: To tal returns include 3m depo sit (o r co mparable) interest gains. Carry gains inco rpo rate
interest rate differential with US rates. A ll FX returns are against USD As of 06/01/2022

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LatAm FX regional roundup: Regional currencies have been hit hard in recent weeks as the markets price
in higher Fed funds rates and a weakening US economy with recession increasingly mentioned. The Real
has been the worst performer in recent weeks (albeit still the best year-to-date). Our fair value models
show the BRL currently very close to trading at fair value levels, which we calculate at 4.73/USD. The
remarkably stable Mexican peso has slid as consensus inflation forecast has risen to 6.81% y/y for end-
2022 (consensus sees economic growth at a mere +1.80%) – data as per a recent Banxico survey.

BRL-Actual Versus Predicted Values

7.00

6.00

5.00

4.00

3.00

2.00 BRL Curncy

Model Predicted Value
1.00

0.00
Nov-2000 Nov-2003 Nov-2006 Nov-2009 Nov-2012 Nov-2015 Nov-2018 Nov-2021

The Peruvian sol and Chilean peso, both heavy copper commodity stories, followed suit, depreciating
versus the USD despite lofty commodity price and demand and as both countries’ economic growth data
have surprised to the downside. The global growth slowdown after last year’s re-opening boom combined
with outlook for the carry these currencies have enjoyed are putting downside pressure on EM currencies
despite a pickup in portfolio flows.

LatAm--Deviations From PPP-Implied Fair Value (Above 100 Is Undervalued) Base year
= 2005
180

160 BRL MXN CLP COP PEN

140

120

100

80

60

40
Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21

Source: Bloomberg, Bulltick

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Equities Strategy:
▪ Valuation metrics, including the PE Ratio, for the S&P 500
are near long-term historical averages, stretching back into Developed Market Equity Returns
eras in which the index had a subst antially lower weighting 2-w eek return YTD re turn
of tech stocks (which intuitively should have higher PE ratios
given their dependence on future growth and innovation) . 5.7% 4.7% 4.0% 3.9% 3.4% 3.0% 2.1%
Meanwhile, the index is up more than 5% from recent lows
below 4,000 touched last week, as the market is debating
whether we have seen the bottom.
-5.9% -5.8%

▪ With the Fed's QT just beginning, and inflationary -13.5%

-15.4% -15.9% -15.6%
-18.0%
pressures still substantial, we believe risks remain over the S&P 500 Spain German Euro FTSE 100 French Nikkei
Ibex DAX Stoxx CAC 40 225
near term for another leg lower before re-risking returns in
full force. We expect the PE Ratio, which currently stands at
Select S&P 500 Sectors Returns
18.0, may yet fall below the 17.0 mark amid increasing
uncertainty. 2-w eek return YTD re turn
58.5%
▪ Nevertheless, investors would do well to begin to gradually
reduce cash positions as we believe that further declines
will be more modest than those we have seen in recent 8.7% 8.3% 7.6% 3.7%
3.1% 3.2% 1.8%
weeks, although we continue to favor defensive sectors,
including healthcare, utilities, and consumer staples. -6.1% -7.6%
-19.6%
-25.0%
▪ All eyes will continue to be on the Fed, which will be a Energy Cons Disc Info Tech Utilities Materials Health
major driver of inv estor sent iment. We expect that Care

continued aggressiv e rate hikes will persist, but that this has Emerging Market Equity Returns
largely been priced into the market . Of more interest is if 24.0%
22.9% 26.6% 23.6%
2-w eek return YTD re turn
the nature of QT changes substantially in either pace or
composition.
7.6% 7.2% 8.0%
6.2% 5.0%
2.3% 1.7% 1.7%
▪ Our top picks in LatAm are surging, thanks in large part to 0.7%

commodity tailwinds, although Colombia's recent bounce is

more to do with political development s, as the (still likely-to-
win) leftist Gustavo Pet ro was dealt a setback as populist
-12.5%
Rodolfo Hernandez outperformed expectations in the first
Colombia Chilean Brazilian MSCI EM Peru Argentina Mexican
COLCA P IPSA Bovespa General Merval Bolsa

Asset Div Begin 2022 Current Cap Gains Cap Gains Target 2022 Expected Total Returns
Yld Price Price (LCY, YTD) (USD, YTD) 2022 LCY w/Div USD w/Div
S&P 500 1.6% 4,766 4,124 - 13.5% - 13.5% 4,700 - 1.4% - 0.1% - 1.4% - 0.1%
Euro Stoxx 3.5% 4,298 3,760 - 12.5% - 18.0% 4,200 - 2.3% 0.5% 1.4% 4.3%
German DAX 3.4% 15,885 14,340 - 9.7% - 15.4% 15,500 - 2.4% 0.2% 1.3% 4.0%
Nikkei 225 2.2% 28,792 27,458 - 4.6% - 15.6% 29,500 2.5% 4.3% 2.6% 4.4%
Shanghai Comp 2.9% 3,640 3,182 - 12.6% - 16.9% 4,100 12.6% 15.0% 10.1% 12.4%
MSCI India 1.6% 2,037 1,925 - 5.5% - 9.2% 2,250 10.5% 11.7% 6.6% 7.7%
MSCI EM 3.1% 1,232 1,078 - 12.5% - 12.5% 1,450 17.7% 20.5% 17.7% 20.5%
MSCI World 2.2% 755 653 - 13.5% - 13.5% 775 2.7% 4.5% 2.7% 4.5%
Mexican Bolsa 3.7% 53,272 51,475 - 3.4% 0.7% 56,000 5.1% 7.9% 5.2% 8.0%
Brazilian Bovespa 8.2% 104,822 111,689 6.6% 23.6% 120,000 14.5% 22.1% 22.6% 30.8%
Colombia COLCAP 5.8% 1,411 1,613 14.3% 24.0% 1,400 - 0.8% 2.6% 4.9% 8.5%
Source: Bloomberg, Bulltick. Chart returns are in USD, excluding dividends As of 06/01/2022

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Over the past ten years, the intra-index, sector dispersion of monthly returns has been nearly 60%
higher than the dispersion seen across the principal DM equity markets in the US, Europe, the UK, and
Japan. As a result, beating the market is much more a factor of getting sector calls right than of
investing with geographic preferences.

Average Cross-Asset Standard Deviation of Monthly Returns Over

Past 10 Years, %
1.60
1.38%
1.40

1.20

1.00 0.87%
0.80

0.60

0.40

0.20

0.00
DM Equities SPX Sectors

We expect the growth rates of forward-EPS estimates to continue to fall, and substantially. In past
instances where this has been the case, Utilities and Health Care, two of our preferred sectors
presently, have tended to outperform the broad index.

Average Sector Returns, 12m following past EPS peaks

(since 1996, looking only at peaks which were followed by >10% decline in EPS estimates)
30

25

20

15

10

0
S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 S&P 500
Real Estate Utilities Health Care Financials Cons Staples Industrials Energy Materials Cons Discret Info Tech Comm Svc
Idx Index Idx Index Idx Idx Index Index Idx Index

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Alternative Investments
#1

① Oil production continues to rebound Oil Production Of Top 4 Global Producers, '000
following its steep drop in 2020, but has 14,000
US
bbl/day
yet to return to pre-pandemic lev els, and 12,000 Saudi Arabia
Russia
has also failed to keep pace with rising 10,000 Iraq
global demand. As the US heads into the
8,000
driving summer season, when it typically
6,000
consumes a higher amount of gasoline,
the price of oil will continue to trade at 4,000

historically high levels. Additional 2,000

sanctions by Europe against Russian 0

energy will also support prices moving Jan-95 Jan-99 Jan-03 Jan-07 Jan-11 Jan-15 Jan-19
forward.
#2

② We expect that traditional inflation Normalized Precious Metals Prices (Jan

hedges like gold, which have thus far 2022=100)
12 5
underperformed other hedges, will see Gold, USD/oz
12 0
some upside over the coming months. Silver, USD/oz
Platinum, US D/oz
This is due to the fact that 1) inflation will 11 5

continue to linger at high levels, while 2) 11 0

the rise in UST yields will start to level off, 10 5
as most of the Fed's hiking cycle has
10 0
already been priced in. As a result, the
95
attractiveness of USTs will wane as real
90
yields continue to be negativ e across all
Ja n-22 Feb-22 Ma r-22 Apr-22 Ma y-2 2 Jun-22
maturities, and non-y ielding assets will be
seen more favorably. #3

Bitcoin Rollercoaster
③ Bitcoin has failed thus far in its role 80,000
as an inflation hedge, dropping more 70,000
than 50% ev en as inflat ion accelerated. BitCoin Price, USD
Nevertheless, cryptocurrencies have
60,000 50dma
entered the mainstream and there will be 50,000 100dma
a persist ent demand among many retail 40,000
investors and a growing segment of 30,000
institutional investors. At present prices,
20,000
we believe that risks are weight ed to the
upside, and technical analysis suggests a 10,000

fairly strong support level at the 30,000 0

dollar mark. Ja n-20 Ma y-20 Sep-20 Ja n-21 Ma y-21 Sep-21 Ja n-22 Ma y-22

Source: Bloomberg, Bulltick As of 06/01/2022

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About us & contacts

About Bulltick Capital Markets

Bulltick Capital Markets is a full-service investment bank specialized in Latin America. The firm offers a variety of
diversified financial products and services with local know-how and international expertise. Its client base is
comprised of established financial institutions and qualified investors in Latin America, as well as of the international
financial community with investment interests in the region. Bulltick is headquartered in the United States, with
offices in Miami, Mexico City, and Bogota.

Our Research Resources

With Bulltick's vast Latin American in-roads, resources and networks, our research team is strategically positioned to
provide value-added research on local and regional companies, markets and industries. With analysts in the region,
along with management road shows, we are able to track the pulse of the leading markets in Latin America. We
make it our business to know the business of the region, so we can help our clients manage volatility with in-depth
coverage of macroeconomic leading sectors and market-moving events.

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ANALYST CERTIFICATION

The analyst(s) primarily responsible for the preparation of this report hereby certify that all the views expressed herein accurately reflect their personal views
only. The analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views
expressed in this report.

IMPORTANT DISCLOSURES

Principal/Agency Trading:
Bulltick and its affiliated entities, employees, officers, and directors may deal on a principal and/or agency basis in transactions involving currencies, markets,
sectors and/or securities referred to herein (or related derivatives or other instruments related thereto), including in transactions which may be contrary to any
recommendations contained herein.
The Firm’s Analysts may interact with sales and trading personnel in the ordinary course of business. Such sales and trading personnel may trade and/or have
proprietary positions in the securities (or in related derivatives) that are the subject of this report, and the Firm's interest may conflict with the interests of
investors in those instruments.

Analyst Compensation:
The costs and expenses of research, including the compensation of the analyst(s) that prepared this report, are paid out of the Firm's total revenues, a portion of
which are generated by its fixed income division.

Conflict Management:
Fixed income personnel report to the head of fixed Income and are not subject to the direct or indirect supervision or control of any other Firm department (or
members of such department).

OTHER DISCLAIMERS

Bulltick and its subsidiaries, affiliates, shareholders, directors, officers, employees, and licensors (“The Bulltick Parties”) will not be liable (individually, jointly, or
severally) to you or any other person as a result of your access, reception, or use of the information contained in this document for indirect, consequential,
special, incidental, punitive, or exemplary damages, including, without limitation, lost profits, lost savings, and lost revenues (collectively, the “Excluded
Damages”), whether or not characterized in negligence, tort, contract, or other theory of liability. The information contained in this document has been obtained
from sources believed to be reliable, although its accuracy and completeness cannot be guaranteed. All opinions, projections and estimates constitute the
judgment of the author as of the date of the report and these, plus any other information contained herein, are subject to change without notice. Prices and
availability of financial instruments mentioned are also subject to change without notice.

Bulltick and its affiliated companies have not taken any steps to ensure that the recommendations referred to in this report are suitable for any particular
investor. The Report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial product. Securities
and financial products mentioned in the report are subject to investment risks, including the possible loss of the principal amount invested. The financial
instruments mentioned in this document may not be eligible for sale in some countries. The Report is not to be construed as providing investment services in
any jurisdiction where the provision of such services would be illegal.

Investing in non-US securities or markets, may entail additional risks. Securities of non-US issuers may not be registered with and may not be subject to the
reporting requirements of the US Securities and Exchange Commission. There may be limited information available on foreign securities or markets. Foreign
companies are generally not subject to uniform audit and reporting standards, practices, and requirements comparable to those in the US. Investments in
foreign markets may be less liquid and their prices more volatile than those comparable in US. In addition, exchange rate movements may have an adverse
effect on the value of an investment in a foreign market.

The information contained in the report is privileged and confidential and intended solely for the recipients who have been s pecifically authorized to receive it
and it may not be further distributed. Bulltick and its affiliates accept no liability whatsoever for the actions of third parties. Should you receive this message by
error you are hereby notified that any disclosure, reproduction, distribution, or use of this message is strictly prohibited.

The Report may provide the addresses of, or contain hyperlinks to, websites, except to the extent to which the Report refers to website material of Bulltick, the
Firm takes no responsibility for, and makes no representation or warranties whatsoever as to, the data and information contained therein. Such address or
hyperlink is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing
such website or following such link through the Report or the website of Bulltick shall be at your own risk and Bulltick shall have no liability arising out of, or in
connection with, and such reference website.

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