EFTA01207393.pdf

From: Richard Kahn To: "Jeffrey E." <jeevacation®gmail.com> Subject: Re: An example - Taiwan 2Q GDP -6.5%; exports fell 8.32% Date: Fri, 14 Aug 2015 18:43:03 +0000 Wine-Images: image005.jpg; image3.gif; image8.gif Shall 1 ask Daniel for trade ideas on shorting Asian currencies. Are you thinking about puts and calls in a 0 cost trade or selling calls or buying puts outright. Please advise on thoughts and notional values. Thank you. Sent from my iPhone On Aug 14, 2015, at 12:05 PM, Jeffrey E. leevacation®gmail.com> wrote: Monday — Forwarded message ----- From: Barrett, Paul S Date: Friday, August 14, 2015 Subject: An example - Taiwan 2Q GDP -6.5%; exports fell 8.32% To: Brad Wechsler Cc: Barrett Team "Jeffrey Epstein (jeevacationggmail.com)" cjeevacation(dgmail.com> "Rich Joslin Brad When we get the balance sheet and ISDA done, we will likely want to short some Asian currencies (unless they move much lower from here). See the Taiwan data below. Paul Taiwan came out with its preliminary Q2 GDP data last night and the numbers were weaker than expected. (Q2 GDP @ -6.56% pace!) CHART ONE: GDP Contracted at a -6.56% pace in Q2. That was the worst number in almost six years. CHART TWO: Exports for Q2 declined at a -8.32% pace. Also the worst number since the last recession. EFTA01207393  image002.mg - 4 I. 1W Nom GDP Exp SA •R% Ex •I ts Index - Related Functions Menu s. a Msty O20 M. E. 0. ? TNGEEXQR -1.75 As Of 03/31/15 % Taiwan Nominal GDP b Expenditures SA Q. . . Taiwan Directorate General of . . . TNGEEXQR Index 96) Actions - 94 Edit G 2876 - taiwan exports 09/30/1985 r, 08/14/2015 Compare Local CCY PI 41 ft 1D 3D 1M 6M YTD lY SY Max ()nark:, lY V - 01 ^ Security/Study 14 cc 0 z mnotate V News O. loom * •114GEEXQR Iniet - Last Price -1.75 Taiwan: Exports YoY% -10 2015 Q2 YoY% -Es Exports -8.32% -20 w: -22.13 -2$ •I I% I 17 I I 199 I '90 I '91 '92 '93 'Slt '95 , , '97 '98 '99 'X, '01 '02 '03 l 'e4 , '05 '06 '07 '08 PO9 I . /0 n/1 '13 i '14 i 'IS Source: Bloomberg 14Aug2015 Paul Barrett I Managing Director I Global Investment Opportunities Group 13.P. Morgan Securities LLC 1 3.P. Morgan Private Bank 13.P. Morgan Chase Bank N.A. 320 Park Avenue, 14th Floor, New York, NY 10022 I T: (212) 622-2770 I F: (212) 310-0108 I NOT AN OFFICIAL CONFIRMATION: For informational purposes only. This report does not represent an official account of the holdings, balances, or transactions made in your account and is being provided at your request. 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This email is confidential and subject to important disclaimers and conditions induding on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at thapjfwwwjp=688.888dgegesidisclosurockmad. EFTA01207394 <image I .gi t> Asia Pacific Economic Research Taiwan: 2Q GDP weakened notably, main drag coming from the export sector, especially tech Taiwan's 2O15 real GDP growth slowed notably to 0.52%oya (compared to the advanced reading of 0.64%). following the upwardly-revised growth at 3.84%oya in 1O (previously: 3.37%). The Directorate General of Budget, Accounting and Statistics (DGBAS) estimates that, seasonally-adjusted, real GDP contracted 6.56% q/q, sear In 2O15, following the positive growth at 2.3% gig saar in 1O. Breakdown of 2O GDP by expenditure highlights that the notable contraction in the economy (in %q/q saar terms) was mainly dragged by export sector weakness (especially for tech products). On the domestic front, GDP expenditure data showed decent growth in private consumption in 2O. though GDP industry data suggested that consumption-related sectors. such as wholesale and retail trade, remained subdued. Meanwhile, fixed investment growth rebounded decently in 2O. which may hint at some potential moderate recovery for the economy going into 2H15. Watching for signs of 2H15 improvement in external demand The significant weakness in Taiwan's 2O GDP. with the most severe quarterly GDP contraction (in eiroctki saar terms) since the worst moments of the global financial crisis, was mainly dragged by the export and manufacturing sectors, with the notable underperformance of the tech sector (tech IP fell significantly at 34.5% 3m13m saar in June). Looking ahead, on the external front, our global team continues to expect stronger global growth in 2H15. which will hopefully provide some support for moderate recovery in Taiwan's export and manufacturing sector. In this regards, it is with noting: (1) Taiwan's July exports improved moderately (up 3.2% m/m sa in real terms): (2) tech exports, following the significant weakness in 2O. rebounded 7.7% m/m sa in July: (3) capital goods imports rose notably at 93.6% m/m sa and 13.2% man sa in July and June respectively, suggesting decent expansion in corporate capex. which in turn hints at some moderate recovery in export and manufacturing sectors in coming months. On the domestic front, it is worth noting that the slowing in industrial activity through 2O seemed to have gradually fed into the labor market, with employment growth losing momentum lately (in % m/m sa terms, total employment stopped growing in June), which could restrain private consumption outlook going into 2H15. Overall. our forecast for Taiwan's full-year 2015 GDP growth now stands at 1.3%oya. assuming moderate recovery in the sequential growth trend to average at about 3.0% gig saar in 3O and 4O. Meanwhile, regarding monetary policy, considering the notable weakness in latest macro data, the possibility of a potential policy rate cut. sometime during 2H15. seems to be on the rise. Besides, as the major source of recent macro weakness largely originated from the external sector, managing currency competitiveness would be an important policy tool going ahead. For further details of the 2O GDP report, looking at the major GDP expenditure components: • Total exports of goods and services contracted notably by 16.5% qlq saar in 2O, compared to the modest expansion at 1.7% q/q saar in 1O. (In particular, monthly trade data suggested the tech sector was the main drag on 2O export weakness. as tech exports contracted 27.0% 3m/3m sear in June.) • Imports of goods and services expanded moderately at 3.0% gig saar in 2O. following the contraction at 5.5% q/q sear in 1O (reflecting the notable rebound in 2O domestic fixed investment). • On the domestic front. private consumption expenditure rose 3.0% gig saar in 2O, following the solid gain at 4.1% q/q saar in 1O. • Gross fixed capital formation rebounded rather notably by 26.8% qlq saar in 2O, following the contraction at 13.1% q/q saar in 1O. EFTA01207395 Regarding GDP details by industry: • Manufacturing production contracted 13.4% q/q saar in 2O. following the moderate gain at 2.2% q/q saar In 1O. • With regard to domestic service sectors. wholesales and retail trade, which is closely related to private consumption expenditure. contracted 5.1% q/q saar in 2O. following the decline at 3.4% q/q saar in 10. • Real estate activity rose modestly at 1.2% q/q saar in 2O. following the modest gain at 0.5% q/q saar in 1O. • Finance and insurance services expanded significantly at 12.9% q/q saar in 2O. adding to the gain at 17.6% qlq saar in 1O. • In addition. construction activity contracted 5.3% qlq saar in 2O. adding to the decline at 4.2% q/q saar in 10. Tartan. real GDP °math 2114 3014 4014 1Q1 2015 %oya Real GDP 38 4.3 3.5 18 0.5 Nose coomrocol 3.0 3.8 2.4 3.8 2.9 Govemres ccosurraco 3.7 3.9 4.3 3.9 0.0 Gross <coal tenaloo 1.8 4.8 0.0 4.2 1.3 Expos of gook; 8 wry. 5.9 7.6 6.5 6.1 .1.3 hams of goods sev. 5.8 9.2 6.1 2_7 2.2 %41q, saar Real GOP 6.1 1.9 2.3 .6.6 Para conwroioi 2.5 2.0 4.1 3.0 Goyernrreat ccosurrato 4.6 1.3 -9.8 5.7 Gross cad Swaim 16.6 3.5 .13.1 26.8 EXPOISCAQDXS & sent 9.2 4.4 1/ 46.5 19ccets ol gooks I tory. 9.7 28 5 3.0 Source: DGBAS <Onagc7.gir, Source: DGBAS <iinagc5.9i Source: DGBAS <iinagc9.gif, Source: DGBAS. J P. Morgan Taiwan: real GOP and IP we saw, tee seat 15 20 1S 10 5 0 .5 -11 .10 15 2911 2912 Nis 2014 2015 Source: DGBAS. MoEA. 3.P1Accoan <imagc2.9i Source: MoF. DGBAS. MmkiL J.P.Alorgan <iinagc4.9ii> Source: MoF. a.P.PAcegan <iinagc-6.gif> Source: DGBAS. J P.Mcagan Click biug for the full Note and disclosures. Grace Ng (852) 2800-7002 GLIOLIIDG@II/OXIMILG201 JPMorgan Chase Bank. NA. 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