Daily Comment Raiffeisen RESEARCH

15 July 2011

Chart of the day

Hourly QEUR=
Price USD Cndl; QEUR=; Bid 07:00 15.07.2011; 1,4166; 1,4168; 1,4147; 1,4152 Cndl; QEUR=; Bid 07:00 15.07.2011; 1,4166; 1,4168; 1,4147; 1,4152 Cndl; QEUR=; Bid 07:00 15.07.2011; 1,4166; 1,4168; 1,4147; 1,4152 Cndl; QEUR=; Bid 07:00 15.07.2011; 1,4166; 1,4168; 1,4147; 1,4152 23:00 13.07.2011 - 11:00 15.07.2011 (GMT) Price USD

Important indicators today

RBI consensus 3.6% 1.6% 0.2% 4.00 0.4% 72.5 n.a. last 3.6% 1.5% 0.3% -7.79 0.1% 71.5 -2.9
1,426 1,424 1,422

1,426 1,424 1,422

USA
14:30 14:30 14:30 14:30 15:15 15:55 Industrial production U. of Michigan Consumer Sentiment EUR: Trade balance, EUR bn Consumer prices, yoy - core rate, yoy - core rate, mom Jun. Jun. Jun. Jul. Jun. Jul. May 3.6% 1.5% 0.1% n.a. 0.4% 72.5 n.a.

1,4212

1,42
1,4186

1,42 1,418 1,416

1,4144

1,418 1,416 1,414 1,412 1,41 1,408

.1234 23:00 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00

1,414 1,412 1,41 1,408

.1234

Europe
11:00 Source: Bloomberg, Raiffeisen RESEARCH

14 Juli 2011

15 Juli 2011

Source: Thomson Reuters, Raiffeisen RESEARCH

EUR/USD

Last: 1.41951 Sell 1.4172 Target: 1.4146 1.407 Possible Head&Shoulders-Reversal Pattern, stop 1.4226 -> 1.4273 1.4296. July 14h, 2011 07:58 CET

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 108 414 176 2364 256 1037 1 BP 3 BP 2 BP 42 BP -2 BP 6 BP 120 541 210 2456 301 1074 94 352 107 661 121 184 15 BP 9 BP 2 BP 1290 BP -22 BP 615 BP 116 1583 -0.2% -0.6% 125 1594 79 1157 21.9% 12.1% 12306 18580 59679 32204 -0.2% 14219 -0.2% 21109 -1.6% 73103 -0.3% 33335 11273 17296 59452 26432 -3.0% -9.4% -13.9% 0.3% 1309 12437 2763 2695 7215 2653 9978 -0.7% 1371 1040 9937 2099 2560 5834 2281 8228 4.1% 7.4% 4.1% -3.5% 4.3% -8.7% -2.5% 1.417 112.180 1.155 24.464 269.690 4.033 -0.2% 0.2% 0.1% 0.0% 0.1% 0.1% 1.49 123.3 1.4 25.9 292.1 4.15 1.26 105.4 1.1 23.9 261.9 3.83 -5.9% 3.3% -8.3% -2.3% -3.3% 1.7% 1.61% 0.1 BP 0.25% 0.1 BP 128.42 124.38 0.1% -0.1% 1.6% 0.5% 134.8 125.4 0.9% 0.2% 119.9 115.1 60.0 BP -5.3 BP 2.5% 5.3%

1T 52W H

52W L

Ytd

Established markets: The price data published yesterday showed lower pressure on prices for June than in the previous month. The marked drop in fuel prices are showing its effect both in the eurozone, where inflation (HCPI) remains stable at 2.7 % and in the lower producer prices in the USA, which have fallen by 0.4 % compared to the previous month. The weekly initial jobless claims in the USA were slightly better than expected and US retail sales are in line with the low expectations. Italy issued several bonds yesterday and could raise EUR 4.97 bn. The yield came out to between 4.93 % (5- and 6-year bonds) and 5.9 % (15-year bond). In the case of the 6- and 12-year issues the volume was much smaller than intended in spite of a relatively strong demand. Todays agenda includes some extremely revealing US indicators - the Empire State Index, the University of Michigan Consumer Sentiment Index and US consumer prices. In Europe the results of the bank stress tests are to be published. Equity markets: The US equity markets closed on a loss yesterday. Sentiment was dampened above all by Ben Bernankes statement that the US Federal Reserve is currently not ready for a third round of bond purchases. At corporate level, the oil company ConocoPhillips (+1.6 %) caused some excitement. The company wishes to divide into two companies and thus separate the refinery business from oil extraction. Meanwhile, the reporting season is gaining more and more momentum. While JPMorgan exceeded expectations, picking up by 1.8 % yesterday, the hotel operator Marriott International (-6.6 %) disappointed investors. After the closing bell, Google presented its figures, which were above expectations. Google shares thus shot up by 12.6 % following the close of trading. The Japanese equity market posted slight gains today, with the Nikkei 225 finally posting roughly 0.4 %. Today, Citigroups figures are due out. Credit markets:

-0.4% 12876 -1.2% -0.7% -0.7% -1.4% 2888 3077 7600 3013

0.4% 10892

Prices as of 15 July 11, 07:54 a.m. (CET) Source: Bloomberg

Daily Comment

With the flood of negative news on the situation in Italy easing to some degree yesterday, the situation in the credit markets also stabilised. Although most CDS indices are moving sideways, high intraday volatility indicates that market participants are still nervous, however. This is reflected in the lack of any primary market activity over the past few days. However - much to our surprise - Metalloinvest (Ba3/--/ BB-) from Russia placed USD 750 mn in debut Eurobonds yesterday yielding 6.5% at issuance, equivalent to a premium of around 65 bp over a somewhat longer-dated Severstal bond (ISIN: XS0551315384, 7:30 CET, 15 July 2011). We assume that there will be little movement in todays trading as most market participants will probably be awaiting the results of the bank stress test. Emerging Markets: Indian wholesale prices, which are used to measure inflation, rose by 9.44 % yoy in June compared with 9.06 % yoy in the previous month. The main drivers of the price hikes were energy, fuel and food prices. The Brazilian central bank intervened again yesterday, buying US dollars to further weaken the Brazilian real. The Asian stock market presented a mixed picture this morning. India posted a slightly negative result, as did Chinese equities in Hong Kong, whereas the Shanghai Composite achieved a slightly positive performance. CEE: Consumer price data for Croatia followed the CEE trend in June and at 2.0% p.a. (down 0.5% on the previous month) was also lower than expected. At 2.6% p.a., final industrial production figures in Hungary for May were in line with the initial estimate. Today sees the publication of the April current account data for the Czech Republic. With the upcoming dividend payments we project a deficit of CZK 28 billion, up from CZK -6.7 billion. For full-year 2011 we expect a current account deficit of around 3.3% of GDP, comparable to 2010. Also to be released today are the June industrial production figures from Russia, where we project 5.0% p.a., up from 4.1 % p.a. in April, as well as producer prices in the Czech Republic (where we expect 5.7% p.a. in June, down from 6.2% p.a.).

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 1.46% 1.46% 1.61% 1.82% 2.18% 1.96% 2.14% 2.58% 3.22% 0.877 7.440 4.272 9.229 39.824 11.325 2.330 2.233 9.157 9.698 1.24% 1.89% 2.74% 0.37% 1.49% 2.96% 0.8 4.6 6.1 3.9 5.8 7.4 62744 2197 2742 5419 1715 728 1201 22153 95.8 967.8 1001.0 12.0 38.4 1750.8 774.0 605.0 2503.3 9650.8

1T 52W H 52W L
-1.5 BP 0.2 BP 0.1 -0.1 -0.1 1.5 1.0 1.6 2.1 BP BP BP BP BP BP BP 1.7% 1.5% 1.6% 1.8% 2.2% 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 1.9% 2.8% 3.5% 0.8% 2.4% 3.7% 0.9% 4.6% 6.1% 4.2% 6.4% 8.4% 0.3% 0.6% 0.9% 1.1% 1.4% 1.1% 1.4% 1.6% 2.3% 0.8 7.2 4.1 8.7 38.8 9.9 1.9 2.2 8.5 8.7 0.6% 1.2% 2.1% 0.3% 1.0% 2.4% 0.8% 3.7% 5.3% 3.2% 5.3% 6.6%

Ytd
64.4 BP 67.6 BP 60.0 59.0 66.9 40.5 25.3 8.1 -15.0 BP BP BP BP BP BP BP

0.1% 0.0% 0.0% 0.3% 0.0% 0.6% 0.1% 0.2% -0.3% 0.3% -4.1 -2.1 -1.0 0.0 -0.5 0.2 0.0 0.0 0.0 -0.2 -2.8 -3.0 BP BP BP BP BP BP BP BP BP BP BP BP

2.2% 0.7% -0.2% 2.6% -2.5% 7.3% 11.3% 0.5% 3.6% 8.5% 37.4 5.3 -22.5 -22.7 -51.3 -33.8 -5 75 24 1 -24 -59 BP BP BP BP BP BP BP BP BP BP BP BP

-0.8% -0.2% -0.7% -0.7% 0.0% 0.3% -0.3% -0.6%

71777 57393 2338 1773 2942 2356 6099 4800 1865 1320 829 600 1278 1107 24531 20147

-4.9% 4.1% -0.1% 2.9% 1.6% 11.8% -1.9% 3.9% 1.6% 26.9% 26.7% -15.0% 25.1% 0.8% -2.4% 10.4% 1.3% 0.5%

0.1% 115.5 76.6 -0.5% 1064.5 614.5 -0.9% n.a. n.a. 2.7% 15.8 13.2 -2.1% 49.8 17.3 -1.0% 1886.5 1489.0 -1.5% 862.3 435.8 -3.6% 576.0 450.0 -0.1% 2803.0 1947.5 0.2% 10190.0 6470.0

Prices as of 15 July 11, 07:54 a.m. (CET) Source: Bloomberg

Daily Comment
This report was completed on 15 July 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), Igor Kovacic (6732), 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)

This document does not constitute an offer or invitation to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. This document is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Any investment decision with respect to any securities of the respective company must be made on the basis of an offering circular or prospectus approved by such company and not on the basis of this document. RBI may have effected an own account transaction in any investment mentioned herein or related investments and or may have a position or holding in such investments as a result. RBI may have been, or might be, acting as a manager or co-manager of a public offering of any securities mentioned in this report or in any related security. Information contained herein is based on sources, including annual reports and other material which might have been made available by the entity which is the subject of this document. RBI believes all the information to be reliable, but no representations are made as to their accuracy and completeness. Unless otherwise stated, all views (including statements and forecasts) are solely those of RBI and are subject to change without notice. Investors in emerging markets need to be aware that settlement and custodial risk may be higher than in markets where there is a long established infrastructure and that stock liquidity may be impacted by the numbers of market makers which may therefore impact upon the reliability of any investments made as a result of acting upon information contained in this document. Special regulations for the Republic of Austria: This document does not constitute either a public offer in the meaning of the Kapitalmarktgesetz (KMG) nor a prospectus in the meaning of the KMG or of the Brsegesetz. Furthermore this document does not intend to recommend the purchase or the sale of securities or investments in the meaning of the Wertpapieraufsichtsgesetz. This document shall not replace the necessary advice concerning the purchase or the sale of securities or investments. For any advice concerning the purchase or the sale of securities or investments kindly contact your RAIFFEISENBANK. Special regulations for the United Kingdom of Great Britain, Northern Ireland (UK) and Jersey (Channel Islands): Raiffeisen Bank International AG. This publication has been either approved or issued by Raiffeisen Bank International AG (RBI) in order to promote its investment business. RBI London Branch is authorised by the Austrian Financial Market Authority (FMA) and subject to limited regulation by the Financial Services Authority (FSA). Details on the extent of the London branchs regulation by the Financial Services Authority are available on request. This publication is not intended for investors who are Retail Customers within the meaning of the FSA rules and should therefore not be distributed to them. Neither the information nor the opinions expressed herein constitute or are to be construed as an offer or solicitation of an offer to buy (or sell) investments. RBI may have effected an Own Account Transaction within the meaning of FSA rules in any investment mentioned herein or related investments and or may have a position or holding in such investments as a result. RBI may have been, or might be, acting as a manager or comanager of a public offering of any securities mentioned in this report or in any related security. The RBI Jersey marketing representative office is not regulated by the Jersey Financial Services Commission as it does not perform any financial services activity in Jersey as defined by the Financial Services (Jersey) Law 1998 (FSJL).Special regulations for the United States of America (USA) and Canada: This document or any copy hereof may not be taken or transmitted or distributed, in the USA or Canada or their respective territories or possessions nor may it be distributed to any USA-person or person resident in Canada by any means other than via a US Broker Dealer. Any failure to comply with these restrictions may constitute a violation of USA or Canadian securities laws. Detailed disclaimer and disclosure as per Sect. 48f of the Stock Exchange Act: http://www.raiffeisenresearch.at -> Disclaimer