Daily Comment Raiffeisen RESEARCH

5 July 2011

Chart of the day

Hourly Q/SPc1
Price USD Cndl; Q/SPc1; Last Trade 01:00 05.07.2011; 1.332,50; 1.333,40; 1.332,50; 1.333,10 Cndl; Q/SPc1; Last Trade 01:00 05.07.2011; 1.332,50; 1.333,40; 1.332,50; 1.333,10 SMA; Q/SPc1; Last Trade(Open); 13; 01:00 05.07.2011; 1.332,79 SMA; Q/SPc1; Last Trade(Open); 13; 01:00 05.07.2011; 1.332,79 07:00 30.06.2011 - 04:00 05.07.2011 (CHG) Price USD

Important indicators today

RBI consensus 1.0% 0.0% 0.0% 49.4 -1.0% n.v. n.v. 82.10% 90.4 last -1.2% 50.5 0.0% 50.1 0.9% -724 85.8 82.00% 89.3
1.338 1.335 1.332 1.329 1.326 1.323 1.320 1.317 1.314 1.311 1.308
.12

1.338 1.335 1.332 1.329 1.326 1.323 1.320 1.317 1.314 1.311

USA
16:00 Factory orders, mom IR: PMI Services SP: PMI Services IT: PMI Services EUR: Retail sales, mom HU: Budget balance, HUF Mrd. ytd SA: Business Confidence BZ: Capacity Utilization MX: Consumer Confidence May Jun. Jun. Jun. May Jun. Jun. May Jun. 0.8% 49.0 50.0 51.0 n.a. n.a. n.a. n.a. n.a.

Europe
08:00 09:15 09:45 11:00 n.a. 11:30 15:00 15:00

Emerging Markets

1.308 1.307,22
.12 08:00 09:00 11:00 13:00 15:00 16:00 18:00 20:00 22:00 00:00 00:00 02:00 02:00 04:00 04:00 06:00 06:00 08:00 08:00 09:00 11:00 13:00 15:00 18:00 20:00 22:00

30 Juni 2011

01 Juli 2011

03 Juli 2011

Source: Thomson Reuters, Raiffeisen RESEARCH

S&P Future

Last: 1,330.30 Buy Target: 1,342.5 1,348.02 Bullish Flag and rally expected, buy 1,337, stop 1,330 -> 1,320 1,313 uly 5th, 2011 07:54 CET

Source: Bloomberg, Raiffeisen RESEARCH

Market overview
cur.
Interest rates, yields 3M Euribor EUR 3M Libor USD Bund Future EUR US T Note Future Currencies EUR/USD EUR/JPY EUR/CHF EUR/CZK EUR/HUF EUR/PLN Equity markets S&P 500 Dow Jones I. A. Nasdaq Comp. DJ EuroStoxx 50 DAX ATX Nikkei 225 Emerging Markets Hang Seng (China) Sensex (India) Bovespa (Brazil) JALSH (South Africa) Commodities Brent Oil USD/bbl Gold USD/oz Credit markets iTRAXX Europe ITRAXX Crossover iTRAXX Fin. Senior 5J CDS Greece. 5J CDS Spain 5J CDS Portugal 92 360 148 n.a. 202 765 1 BP 2 BP 3 BP n.a. 2 BP 9 BP 125 563 210 987 301 834 94 352 107 625 121 184 -1 BP -50 BP -23 BP -973 BP -75 BP 343 BP 111 1493 -0.1% -0.2% 126 1578 78 1157 16.9% 5.7% 12855 18731 63891 32078 -0.1% 14219 -0.4% 21109 0.8% 73103 0.5% 33335 11142 17296 60489 26168 1.3% -8.7% -7.8% -0.1% 1340 12583 2816 2870 7443 2803 9972 1.4% 1371 1016 9614 2078 2507 5809 2224 8228 6.5% 8.7% 6.2% 2.8% 7.6% -3.5% -2.5% 1.446 117.260 1.228 24.271 263.930 3.938 0.5% -0.2% -0.4% 0.0% 0.1% 0.0% 1.49 123.3 1.4 25.9 292.1 4.15 1.25 105.4 1.2 23.9 262.6 3.83 -8.1% 7.5% -1.9% -3.1% -5.6% -0.7% 1.56% 0.7 BP 0.25% 0.0 BP 125.48 122.31 0.0% 0.3% 1.1% 0.6% 134.8 125.0 0.6% 0.2% 119.9 115.1 55.7 BP -5.7 BP 0.1% 3.5%

1T 52W H

52W L

Ytd

1.4% 12876 1.5% -0.2% 0.3% -0.3% 2888 3077 7600 3013

Established markets: In the absence of any important data releases yesterday, the markets were once again driven by the news flow on the planned second bailout package for Greece. At the centre of attention was a statement issued by rating agency S&P on the participation of the private sector put forward by French banks. S&P warned that the French debt rollover plan (see our latest weekly market outlook for details) may still warrant a selective default rating. As the French plan had recently been considered a model for other EUR countries, the markets reacted negatively to the agencys stance, with the risk premiums on peripheral sovereign debt increasing slightly once again following the powerful tightening of spreads of recent days. On the data side, todays release of the results of the Services Purchasing Managers Index (PMI) survey will be interesting for the EUR peripheral states. We are expecting a rise in the PMI in Italy but declines in Ireland and Spain. Factory Orders are on the agenda in the USA, which are forecast to have improved in May over the previous month. Equity markets: The new week started off with Independence Day in the United States. Accordingly, the US equity markets remained closed and no new US economic data was published. As a result, there was little going on in the early hours of the morning in the Japanese equity market, either. Only a newspaper report stating that the Tokyo Securities Exchange might be merging with its counterpart in Osaka caused a sensation, sending the stock price of the Osaka Securities Exchange up by around eight percent at one point. Otherwise, hardly any trends were discernible. The main European bourses will presumably also start the new day on a fairly muted note. Trading is not likely to pick up until the afternoon, when the US bourses open for the week and the latest ISM Services Index figures are published in the United States.

0.1% 10892

Prices as of 5 July 11, 8:12 a.m. (CET) Source: Bloomberg

Daily Comment

Credit markets: The spread of the iTRAXX Main Index widened marginally (+1bp) at the start of the week. Issues on the primary market include ING Banks covered bond for EUR 300 million (coupon: 3.375%), Vivendis dualtranche paper (EUR 1 billion, 4-yr, coupon 3.5% and EUR 750 million, 10yr, coupon 4.75%) and a bond from Amadeus for EUR 750 million (5yr, coupon 4.875%). According to the CEO of the Italian bank, UniCredit SpA will participate in the rollover of Greek debts. The government of the Ukraine has issued a statement regarding the timing of the upcoming privatisation plans for its energy sector. The first assets should go up for sale as early as August. DTEK is among those interested in some of these properties and we think might take on new debt to purchase them. In our view, the companys credit profile can well handle such acquisitions. We continue to rate the 2015 USD bond of DTEK a buy. Emerging Markets: There is now once again a more upbeat view of the emerging equities markets. Currencies are also providing a boost: the odds are on a further increase in the ZAR and the BRL. The yuan climbed to new heights against the USD after the central bank set a firmer average exchange rate; however, the market remains sceptical about a stronger revaluation. CEE: The Fitch rating agency has upgraded Romanias credit rating from BB+ to BBB-. This means that the countrys rating is once again in the investment grade segment. The end of the recession, strong export momentum, a declining current account deficit and progress made in consolidating the budget were all contributory factors in this decision. The Romanian leu reacted positively and appreciated by 0.6% immediately after announcement of the upgrade. We see further upside potential for the currency due to the poor performance last month. Turkish government bonds profited from the good inflation figures for June. The yield on the 2-year benchmark bond dropped by 15 bp to 9% p.a. The CPI decreased by 1.4% compared to the previous month (by more than twice as much as expected!) following an unexpectedly strong surge of 2.4% in May. However, we still see risks of inflation and project a slight increase in government bonds yields in Q3.

Market overview
current
Other interest rates EUR Eonia 1M Euribor EUR 3M Euribor EUR 6M Euribor EUR 12M Euribor EUR 2Y Swap EUR 3Y Swap EUR 5Y Swap EUR 10Y Swap EUR Other currencies EUR/GBP EUR/HRK EUR/RON EUR/SEK EUR/RUB EUR/UAH EUR/TRY EUR/BRL EUR/CNY EUR/ZAR Bond market 2Y Bund EUR 5Y Bund EUR 10Y Bund EUR 2Y US Treasury 5Y US Treasury 10Y US Treasury Interest rates CEE 3M Pribor 3M Wibor 3M Bubor 10Y Czech Rep. 10Y Poland 10Y Hungary Equity markets CEE Turkey (ISE Nat. 100) Croatia (CROBEX) Poland (WIG20) Romania (BET) Russia (MICEX) Serbia (BELEX15) Czech Rep. (PX) Hungary (BUX) Commodities WTI Oil USD/bbl Fuel oil USD/mt Diesel USD/mt CO2 EUA Fut. EUR/mt Silver USD/oz Platinum USD/oz Palladium USD/oz Steel USD/mt Aluminium USD/mt Copper USD/mt 0.82% 1.34% 1.56% 1.80% 2.18% 2.23% 2.45% 2.82% 3.39% 0.903 7.397 4.188 9.071 40.300 11.560 2.342 2.258 9.356 9.746 1.66% 2.28% 3.00% 0.45% 1.75% 3.16% 0.8 4.6 6.1 3.9 5.7 7.3 64187 2231 2804 5532 1706 740 1232 22633 94.8 917.0 945.0 13.1 33.9 1714.8 756.3 589.0 2504.0 9435.3

1T 52W H 52W L
-9.4 BP 0.4 BP 0.7 0.6 0.8 1.2 2.0 -0.8 -1.0 BP BP BP BP BP BP BP 0.7% 0.8% 1.1% 1.4% 1.5% 2.5% 2.8% 3.2% 3.8% 0.9 7.5 4.3 9.6 43.9 11.9 2.4 2.4 9.7 10.0 1.6% 2.7% 3.5% 1.3% 2.8% 4.0% 1.8% 4.4% 9.7% 5.2% 6.4% 10.0% 0.3% 0.4% 0.6% 0.9% 1.2% 1.1% 1.4% 1.6% 2.3% 0.8 7.2 4.1 8.7 38.6 9.9 1.9 2.2 8.5 8.7 0.5% 1.4% 2.5% 0.7% 1.9% 3.1% 0.8% 3.7% 5.2% 3.6% 5.5% 6.4%

Ytd
-0.2 BP 55.4 BP 55.7 57.6 67.3 67.7 56.1 32.5 2.3 BP BP BP BP BP BP BP

-0.1% 0.0% -0.2% -0.3% -0.3% -0.6% -0.3% -0.1% -0.4% -0.3% -0.8 -1.6 -1.7 -1.8 -3.0 -2.4 0.0 0.0 0.0 -0.2 -1.5 0.0 BP BP BP BP BP BP BP BP BP BP BP BP

5.0% 0.2% -2.2% 0.9% -1.3% 9.2% 11.8% 1.6% 5.7% 8.9% 79.4 44.0 4.0 -13.9 -25.6 -13.5 -7 75 25 3 -31 -64 BP BP BP BP BP BP BP BP BP BP BP BP

0.0% -0.3% -0.3% 0.8% 0.0% -1.2% -0.3% -0.9%

71777 55488 2338 1773 2942 2284 6099 4694 1865 1282 829 600 1278 1096 24531 20147

-2.8% 5.7% 2.2% 5.0% 1.1% 13.5% 0.6% 6.1% 0.6% 20.3% 19.6% 14.5% 10.4% -1.3% -4.7% 7.5% 1.4% -1.7%

-0.1% 115.5 76.6 0.1% 1064.5 607.0 0.6% n.a. n.a. 1.0% 15.8 13.2 -0.6% 49.8 17.3 -0.6% 1886.5 1486.0 -0.3% 862.3 426.5 0.7% 576.0 450.0 -0.3% 2803.0 1931.0 -0.2% 10190.0 6425.0

Prices as of 5 July 11, 8:12 a.m. (CET) Source: Bloomberg

Daily Comment
This report was completed on 4 Julye 2011

Acknowledgements

Editor
Raiffeisen RESEARCH GmbH A-1030 Vienna, Am Stadtpark 9 Tel: +43 1 717 07-1521 Head: Peter Brezinschek (1517) Research Sales: Werner Weingraber (5975) Economics, Fixed Income, FX: Valentin Hofsttter (Head, 1685), Jrg Angel (1687), Wolfgang Ernst (1500), Gunter Deuber (5707), Ingo Jungwirth (2139), Julia Neudorfer (5842), Andreas Schwabe (1389), Gintaras Shlizhyus (1343), Gottfried Steindl (1523), Martin Stelzeneder (1614) Credit/Corporate Bonds: Christoph Klaper (Head, 1652), Christoph Ibser (5913), Martin Kutny (2013), Peter Onofrej (2049), Gleb Shpilevoy (1461), Alexander Sklemin (1212), Jrgen Walter (5932) Stocks: Helge Rechberger (Head, 1533), Aaron Alber (1513), Christian Hinterwallner (1633), Jrn Lange (5934), Hannes Loacker (1885), Richard Malzer (5935), Johannes Mattner (1463), Christine Nowak (1625), Leopold Salcher (2176), Andreas Schiller (1358), Connie Schmann (2178), Magdalena Wasowicz (2169) Quant Research/Emerging Markets: Veronika Lammer (Head, 3741), Mario Annau (1355), Lydia Kranner (1609), Nina Kukic (1635), Albert Moik (1593), Manuel Schuster (1529) Technical analysis: Stefan Memmer (1421), Robert Schittler (1537)

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