commodities weekly breaking the trends · 4/20/2015 · 20 april 2015 commodities weekly ....

Commodities Research 20 April 2015

Commodities Weekly

Breaking the trends

• Crude oil rallied to a three-month high due to slowing stock builds, forecasts for a decline in US production, and technical buying as WTI broke above a key resistance level. Stock levels will require close monitoring over the summer months to determine whether the strength in Gulf Coast differentials can persist. In addition, near-term fundamentals point to a widening of light-heavy spreads, particularly WTI-WCS.

• Growing risk of a Greek default, China registering its slowest growth in five years as well as weaker-than-expected data from the US have not sparked a significant revival in gold. Barring this week’s pick up in physical demand, we think the risks are tilting back towards the downside as key correlations are starting to strengthen once again.

• While the copper market was focused on news out of CESCO, news in Zambia and China should not be ignored. Zambia appears to have resolved its dispute with producers over a new taxation regime, while China’s disappointing data signal that, although the slowdown is real, it is within our economists’ forecasts. Copper prices rose last week, which we believe is reflective of an increased appreciation for a tight market.

Week in Review 2

Energy

Oil Market Outlook: Signs of change 4

Metals

Market Outlook: Chile and changes 8

Commodity Price Forecasts 14

Commodity Price Comparisons 15

FX Forecasts 16

Kevin Norrish +44 (0)20 7773 0369 [email protected] Michael Cohen +1 212 526 3606 [email protected] Suki Cooper +1 212 526 7896 [email protected] Dane Davis +1 212 526 6721 [email protected] Feifei Li +44 (0)20 3134 6987 [email protected] Miswin Mahesh +44 (0)20 7773 4291 [email protected] Warren Russell +1 212 526 8707 [email protected] www.barclays.com

PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 17

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Barclays | Commodities Weekly WEEK IN REVIEW

Commodities publications released this week:

Cross Commodities

The Commodity Investor - Flows Analysis: Falling out of favour again For a brief moment it looked like commodity investing had regained its momentum as the first two months of the year attracted substantial new investor buying of oil and gold. The buying was so strong that Q1 2015, with net inflows of $6.6bn, ranks as the strongest for commodity investments since 2012, despite the fact inflows turned to outflows again in March. That swift change of direction in March when $1.5bn of commodity investments was liquidated is ominous, in our view, and suggests that the early-year pick-up in inflows was related to one-off factors, notably bargain hunting in oil, rather than any sea change in investor views toward commodities as a long-term asset class.

Metals

Gold Delta: Could it be June? Gold’s potential for upside momentum looks limited in the near term. The market quickly came under pressure after the Fed minutes noted a June hike was possible. On the other hand, physical demand has weakened. In the absence of a macro catalyst, gold is likely to struggle to make sustained gains. However, the floor is likely to firm as demand in India picks up in the run up to festival-related buying, though poorer harvests have capped spending.

20 April 2015 2

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Barclays | Commodities Weekly

Energy

20 April 2015 3

Barclays | Commodities Weekly OIL MARKET OUTLOOK

Signs of change Crude oil rallied to a three-month high on the back of slowing stock builds, forecasts for a decline in US production, and technical buying as WTI broke above a key resistance level. Stock levels will require close monitoring over the summer months to determine whether the strength in Gulf Coast differentials can persist. In addition, near-term fundamentals point to a widening of light-heavy spreads, particularly WTI-WCS.

Slowing builds, strong differentials Crude oil rallied this week on the back of slowing stock builds, an apparent decline in production, and technical buying as WTI broke above a key resistance level. The EIA’s Weekly Petroleum Supply report showed a modest 1.3 mb build in crude, which is a drop in the bucket compared to the 10+ mb builds seen in recent weeks. Despite new record high absolute stock levels, the slowing pace of crude builds signalled that the market might rebalance sooner now that US turnarounds are over. Gasoline stock declines were offset by diesel builds, but overall product stocks grew by 5.9 mb, lifting total crude oil and petroleum product stocks by 7.2 mb.

If stocks do not decline significantly in the coming months, Gulf Coast grades may need to discount from current levels. Although production is likely to decline in the coming months, it should remain elevated compared to 2014 levels for most of 2015. With higher y/y production and strong Gulf Coast differentials signalling imports, it will be important to monitor stock levels during peak refinery runs this summer. If US refineries cannot significantly draw down stocks during this period, USGC differentials will likely need to weaken to prevent even higher stock builds in the fall.

New North American takeaway capacity, higher refining throughputs, and storage demand have narrowed the WTI-WCS1 light-heavy crude spread, but several factors lead us to believe this could reverse course. Changes in market dynamics support stronger differentials; however, the current spread appears exceptionally narrow, especially given near-term production expectations, upgrader maintenance, and increases in light oil processing capacity.

1 Western Canadian Select (WCS) is Canada’s benchmark for blended Canadian heavy crude which prices at Hardisty.

Warren Russell

+1 212 526 8707

[email protected]

Michael Cohen

+1 212 526 3606

[email protected]

Miswin Mahesh

+44 (0)20 7773 4291

[email protected]

FIGURE 1 A potential light at the end of the tunnel for US crude oil stock builds

FIGURE 2 The WTI-WCS Hardisty differential has narrowed markedly in the past year

Source: EIA, Barclays Research Source: Platts, Bloomberg, Barclays Research

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Nearing seasonalpeak builds

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$/bblImproved takeaway capacity

and increased use ofblended crudes has helpedlower differentials for WCS

Quality Differential

Location Differential

20 April 2015 4


Less light supplies and more demand for lights; more heavy supplies and no apparent increase in heavy demand

The decline in oil prices is expected to affect North American light and heavy crude production differently. In the US and the light oil plays in Canada, it is already apparent that drilling activity has declined precipitously and we expect outright production declines in several tight oil basins over the coming months. Conversely, in Canada, heavy crude oil production is expected to continue growing in 2015, by up to 200 kb/d, as new projects, including Kearl, Christina Lake, Nabiye, and Surmont, ramp up. So the supply of Canadian heavy crude relative to US light supply is expected to increase.

In addition to this shift, several Canadian upgraders will undergo turnarounds this spring/summer, including Shell and Suncor facilities. Although some bitumen mining operations that feed those upgraders may close temporarily as turnarounds occur, upgrader maintenance also means less marketed syncrude (synthetic light oil), which will reduce the supply of light oil in the North American market. Admittedly, some syncrude is used in the production of WCS, but we do not think lower availability will affect heavy Canadian volumes.

In the US, light processing capacity is expected to increase as new splitters and refinery expansions come online over the coming months. Expanded processing capacity will help increase demand for light oil as supplies start to taper off. Enbridge’s Line 9 pipeline reversal should further tighten the balances for North American light oil, providing Bakken and Western Canada light oil with pipeline access to Eastern Canadian refiners and potentially backing out further waterborne imports (ex shipments from the USGC). These factors lead us to believe that WTI-WCS Hardisty should widen from current levels, but unforeseeable issues such as refinery outages present a risk to this view.

20 April 2015 5


FIGURE 3 Brent forward curve ($/bbl)

FIGURE 4 WTI forward curve ($/bbl)

Source: Bloomberg, Barclays Research Source: Bloomberg, Barclays Research

FIGURE 5 Front-month WTI and Brent ($/bbl)

FIGURE 6 Front-month Brent (€/bbl) and ICE Gasoil (€/ton)


FIGURE 7 Front-month ICE gasoil crack ($/bbl)

FIGURE 8 Front-month NYMEX 321 crack ($/bbl)


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20 April 2015 6


Metals

20 April 2015 7

Barclays | Commodities Weekly METALS MARKET OUTLOOK

Chile and changes Growing risk of a Greek default, China registering its slowest growth in five years as well as weaker than expected data from the US have not sparked a significant revival in gold. Barring this week’s pick up in physical demand, we think the risks are tilting back towards the downside as key correlations are starting to strengthen once again.

While the copper market was focused on news out of CESCO, news in Zambia and China should not be ignored. Zambia appears to have resolved its dispute with producers over a new taxation regime, while China’s disappointing data signal that, although the slowdown is real, it is within our economists’ forecasts. Copper prices rose last week, which we believe is reflective of an increased appreciation for a tight market.

Correlation fixation Gold prices are starting to look increasingly vulnerable to the downside as the month draws to a close, in our view. Demand from India, ahead of the gold buying festival of Akshaya Tritiya which falls on 21 April, has been modest thus far. Instead, gold has been taking its cue from macro data. Key correlations are starting to strengthen, which bodes ill for gold.

Gold prices are oscillating around the $1200/oz mark, in search of direction. Growing risk of a Greek default, China registering its slowest growth in five years as well as weaker than expected data from the US, has not sparked a significant revival in gold.

Market positioning at the start of the year suggested the gold market had not fully priced in a US rate hike. By the end of Q1 15, speculative positioning was more closely aligned to past trends prior to rate hikes. Net fund length has turned more positive over the past three weeks, but upward price momentum has been limited. In our view, this reflects a deflated cushion for gold. Barring this week’s anticipated pick up in festival related physical demand, we think risks are once again tilting to the downside.

Over the course of Q1 15, gold’s correlations to oil prices, EURUSD and the S&P 500 had weakened to become uncorrelated against these drivers. The one relationship that remains intact is that to US 10y Treasuries, and this remains the key correlation to watch for gold.

Suki Cooper

+1 212 526 7896

[email protected]

Dane Davis

+1 212 526 6721

[email protected]

FIGURE 1 Gold’s correlation against 10 year US Treasuries weaker but is still the strongest relationship

FIGURE 2 Tactical investors increase their exposure to Comex gold (‘000 lots)

Source: EcoWin, Bloomberg, Barclays Research Source: CFTC, Barclays Research

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20 April 2015 8


The three-month rolling gold-10y US Treasuries correlation has weakened over the past month but it remains the most prominent relationship, hovering around 50%. Our economists continue to expect the Fed to hike for the first time since 2006 in September and for Fed fund rate to reach 0.50-0.75% by the end of the year. Our Rates Strategists expect 10yr US Treasuries to average 1.85% in Q2 15 and to rise to 2.25% by Q4 15.

Gold’s correlation to the S&P 500 remains neutral, but it has started to strengthen against the trade weighted dollar. In part, this is a reflection of gold losing its safe haven appeal, which was apparent in January following the SNB’s exchange rate policy announcement and heightened uncertainty in Europe. Our FX Strategists expect EURUSD to trade at parity in Q3 15 and for the USD to strengthen to 0.98 in Q4 15. With gold’s correlation to the USD strengthening again, and our expectation that the metal’s price will become increasingly influenced by US monetary policy, the risks look to be stacking up against gold beyond the seasonally strong period for consumption in April.

An end to a trend? Last week, the copper industry’s leaders and watchers converged on Santiago, Chile for the annual CESCO conference, the largest annual forum for the metal. While the announcements and interviews from CESCO dominated that week’s headlines, we want to highlight some important stories and their implication for copper that the market may have missed.

First, on 14 April China, the world’s largest copper consumer, reported Q1 15 growth of 7% y/y, the slowest rate since 2009. Despite this disappointing macroeconomic news, the copper market’s reaction was surprising. At the close of business on Thursday 16 April, copper was priced at 6067.5$/tonne, a rise of 1.1% from the beginning of the week. Prior to Thursday, prices fell by 1.5% from the prior week close on 10 April, but then rallied on Thursday by 1.8%, the strongest one-day gain since 20 March.

A copper price rally coinciding with poor macroeconomic news from China may initially seem contradictory, as a slowdown in China, which consumes an estimated 46% of the global production of the metal, adversely affects the outlook for copper on the demand side. However, this apparent contradiction can be explained by appreciating several points that we believe investors are increasingly coming to acknowledge. First, while China’s economy is slowing, growth is still expected to be robust with an official forecast of 7% for 2015. (Our China economists take a slightly more bearish perspective forecasting a below consensus estimate for the annual GDP growth rate at 6.8%, see China: Sharp slowdown in March activity highlights need for more policy easing in Q2.) Our relaunch of copper market coverage in March, Diagnosing Dr. Copper, incorporates this 6.8% GDP growth rate for China into our forecast of 4% growth in Chinese refined copper consumption. In other words, recent data, while poor, is in line with our analysis of the state of the copper market and does not fundamentally alter our bullish outlook for the copper price.

Second, the slowdown in China raises the prospect of additional stimulus measures to help manage the economic deceleration. Our view is that any additional stimulus policies will only have a muted effect on Chinese copper consumption, as fundamentals are inevitably altering the nature of China’s copper consumption away from fixed asset led growth to consumer driven demand. But any further stimulative measures are unlikely to harm Chinese copper consumption, and we acknowledge the potential for a short term induced boost to copper consumption directly attributable to any stimulative measures, such as real estate purchasing reform or lower interest rates.

When taken together, these two arguments, that China’s demand is slowing but still robust and that the likelihood of further monetary and fiscal stimulus has potentially positive

20 April 2015 9





implications for Chinese copper demand, paint a more benign outlook for copper demand than the headlines may suggest.

On the supply side, we seem to have reached the end of a story that we have been following for some time. Zambia, Africa’s second largest copper producer after the Democratic Republic of the Congo, announced that they are reverting back to a previous, and more favourable, taxation regime for miners. To recap, the Zambian government announced in January a new taxation system of 20% royalties for open-pit mines and 8% for underground operations. This change occurred during a period of tense relations between copper producing companies and the Zambian government, as producers claimed that Zambia was withholding VAT refunds. In response to the tax rule changes announced in January, Zambian producers declared that they would be shuttering mines, postponing expansion plans, and cutting jobs because of the uncompetitive nature of the new tax code.

We make no judgment on either side’s claims, but noted in March that if threatened production disruptions from producers were to go through, up to 290ktpa of production would have been eliminated from this year’s supply forecast. We made the decision not to factor this possible disruption into our tracking of disruptions for the year, as the story was still ongoing and reports indicated production had yet to be affected. Bloomberg reports news out of Zambia last week that the government and producers have perhaps reached an understanding, with the cabinet agreeing to instead implement a flat royalty rate of 9%, while returning to a 30% corporate income tax.

Cochilco, Chile’s state copper commission, has assessed the net effect of March’s devastating flooding in the northern copper production region of the country. Cochilco estimates that Chile will mine 5.94 mn tonnes of copper this year, down from its earlier estimate of 6.0 mn tonnes. Temporary disruption is estimated to total 6,000 tonnes for Barrick Gold Corp.’s Zaldivar mine and 6,500 tonnes from Codelco’s Salvador division. Overall, miners were able to adapt production to the rains, and output was not heavily affected. A few operations had to temporarily halt production, but are expected to make up output losses from increased production later in the year. For Codelco, operations at Chuquicamata, Ministro Hales, Radomiro Tormic, Gabriela Mistral, and Salbador halted for three days during the rains, but have since reported no problem in resuming activity. Antofagasta’s Michilla and Centinela halted production as well, but with no expected production losses. However, Antofagasta lowered its copper outlook for Los Pelambres by 5ktpa for reasons unrelated to the rain. Most other major operations, including BHP Billiton’s Escondida and Anglo and Glencore’s Collahuasi, were not affected.

20 April 2015 10


Precious metals prices and ETP holdings

FIGURE 7 ETP holdings (as of 15 April 2015)

Physical ETPs Weekly change Month-to-date change Year-to-date change Total holdings

Gold (tonnes) 1.9 -3.9 34.1 1,745

Open end funds 1.9 -3.9 29.8 1,576

SPDR (GLD) 3.0 -1.2 27.1 736

Silver (tonnes) 78.7 30.2 86.8 19,936

Open end funds 78.7 30.2 94.0 15,920

iShares US 95.2 31.5 -145.1 10,105

Platinum (ounces) -5,223 -115,671 -67,534 2,823,506

Open end funds -5,223 -114,399 -58,989 2,762,673

ABSA NewPlat -82 -110,480 -33,021 1,071,495

Palladium (ounces) -1,286 35,608 -173,754 2,950,380

Open end funds -1,286 38,519 -154,226 2,811,471

US ETF Securities 0 -212 -54,281 460,223

Source: Various issuer websites, Bloomberg, Barclays Research

FIGURE 3 Gold ($/oz)

FIGURE 4 Silver ($/oz)


FIGURE 5 Platinum ($/oz)

FIGURE 6 Palladium ($/oz)


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20 April 2015 11


FIGURE 8 Copper price ($/tonne), LME cash

FIGURE 9 Copper stocks

Source: Bloomberg, Barclays Research Source: Bloomberg, CRU, Barclays Research

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20 April 2015 12


Forecasts and Data

20 April 2015 13

Barclays | Commodities Weekly COMMODITY PRICE FORECASTS

Barclays Research quarterly average commodity price forecasts

Note: Precious metals spot prices. WTI: front-month NYMEX close. Brent: front-month IPE close. US natural gas: NYMEX front-month close. Source: Barclays Research

Barclays Research annual average commodity price forecasts

Note: Precious metals spot prices. WTI: front-month NYMEX close. Brent: front-month IPE close. US natural gas: NYMEX front-month close. Source: Barclays Research

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15F Q3 15F Q4 15F

Metals

Copper US$/t 7,032 6,796 6,997 6,634 5,805 6,300 6,600 6,500Gold US$/oz 1292 1290 1282 1200 1219 1190 1150 1170Silver US$/oz 20.4 19.6 19.7 16.5 16.7 16.5 15.8 16.0Platinum US$/oz 1423 1441 1427 1223 1194 1215 1250 1300Palladium US$/oz 741 812 859 783 786 795 815 825EnergyWTI US$/bbl 99 103 97 73 49 39 47 52Brent US$/bbl 108 110 103 77 55 47 50 55US Natural Gas US$/mmbtu 4.72 4.58 3.95 3.83 2.82 2.45 2.85 3.00

2009 2010 2011 2012 2013 2014 2015F 2016F

MetalsCopper US$/t 5,148 7,533 8,813 7,948 7,326 6,865 6,313 6,250Gold US$/oz 972 1,226 1,571 1,668 1,412 1,266 1,182 1,215Silver US$/oz 14.6 20.2 35.2 31.1 23.8 19.0 16.2 15.8Platinum US$/oz 1,205 1,610 1,716 1,547 1,483 1,379 1,240 1,325Palladium US$/oz 262 526 729 641 723 799 805 850EnergyWTI US$/bbl 62 80 95 94 98 93 47 57Brent US$/bbl 63 80 111 112 109 100 52 60US Natural Gas US$/mmbtu 4.16 4.39 4.03 2.82 3.73 4.27 2.75 3.60

20 April 2015 14

Barclays | Commodities Weekly Price comparisons

Source: EcoWin, Barclays Research

Exchange UnitPrice Change

(%, w/w)16-Apr-15

Week Ago Price

Price Change (%, m/m)

Month Ago Price

Price Change (%, y/y)

Year Ago Price

Crude Oil ICE $/barrel 13.1% 64 57 19.6% 54 -41.6% 110

Crude Oil NYMEX $/barrel 11.7% 57 51 30.5% 43 -45.3% 104

Heating Oil NYMEX $/gallon 10.5% 1.9 1.7 12.6% 1.7 -36.6% 3.0

Gasoline NYMEX $/gallon 10.0% 1.9 1.8 11.9% 1.7 -36.3% 3.0

Gas Oil ICE $/tonne 8.3% 572 528.3 12.4% 509 -38.2% 925

US Natural Gas NYMEX $/mmbtu 6.2% 2.7 2.5 -6.0% 2.9 -40.8% 4.5

Sugar ICE $/lb 4.9% 13.4 12.8 4.8% 12.8 -20.6% 16.9

Lead LME $/tonne 4.3% 2,048 1,964 17.5% 1,742 -2.4% 2,099

Coal API2 ICE $/tonne 2.9% 57 56 -0.9% 58 -25.5% 77

Cocoa ICE $/tonne 2.8% 2,870 2,792 2.9% 2,788 -2.9% 2,956

Nickel LME $/tonne 2.6% 12,813 12,484 -7.6% 13,871 -27.8% 17,739

Coal API4 ICE $/tonne 2.6% 56 55 -5.0% 59 -24.5% 74

Aluminium alloy LME $/tonne 2.5% 1,830 1,785 4.3% 1,755 -3.2% 1,890

Aluminium LME $/tonne 2.5% 1,811 1,766 2.1% 1,773 -1.8% 1,844

Zinc LME $/tonne 2.5% 2,226 2,172 11.8% 1,991 9.0% 2,042

Palladium NYMEX $/oz 2.3% 779 762 2.3% 762 -2.9% 803

Coffee ICE $/tonne 1.6% 140 137 4.2% 134 -24.9% 186

Soybeans CBOT $/bushel 1.3% 966 954 1.2% 955 -36.4% 1,519

Copper LME $/tonne 0.9% 6,070 6,014 3.5% 5,864 -8.9% 6,662

Silver OTC $/oz 0.9% 16.3 16.1 4.8% 15.5 -17.1% 19.6

Gold OTC $/oz 0.2% 1,197 1,194 4.2% 1,149 -8.1% 1,302

Platinum NYMEX $/oz 0.2% 1,159 1,156 5.8% 1,095 -19.4% 1,437

Rubber TOCOM ¥/kg -0.2% 200 200 -9.4% 220 -8.9% 219

Azuki beans TGE JPY/30kg -0.2% 8,770 8,790 0.7% 8,710 -20.1% 10,980

Feeder Cattle CME $/lb -0.3% 216 216 2.0% 212 20.4% 179

Corn CBOT $/bushel -0.5% 376 378 1.4% 371 -24.4% 498

Live Cattle CME $/lb -0.6% 161 162 4.7% 154 10.3% 146

German Power EEX €/MWh -0.8% 31 31 2.0% 30 -5.8% 33

Carbon EUA ECX €/tonne -2.0% 6.9 7.0 2.1% 6.7 26.1% 5.5

UK Power ICE £/MWh -2.6% 45 46 -2.0% 46 -13.9% 53

Cotton ICE $/lb -3.3% 64 66 6.3% 60 -29.7% 91

UK Natural Gas ICE £/therm -3.6% 46 48 -0.6% 47 -9.6% 51

Oats CBOT $/bushel -4.1% 258 269 -4.8% 271 -36.3% 405

Rough Rice CBOT $/bushel -4.2% 10.0 10.4 -6.2% 10.6 -35.2% 15.4

Wheat CBOT $/bushel -4.7% 495 519 -1.8% 504 -28.1% 688

Lumber CME $/1000ft -5.4% 255 270 -6.5% 273 -22.4% 329

Wheat KBT $/bushel -7.8% 508 552 -6.4% 543 -32.6% 755

Tin LME $/tonne -9.6% 14,962 16,557 -14.5% 17,503 -36.3% 23,485

20 April 2015 15

Barclays | Commodities Weekly FX FORECASTS

Forecasts Forecast vs Outright Forward

Spot Q2 15 Q3 15 Q4 15 Q1 16 Q2 15 Q3 15 Q4 15 Q1 16

G7 countries

EUR/USD 1.08 1.05 1.00 0.98 0.95 -1.4% -6.2% -8.3% -11.3%

USD/JPY 119 121 121 121 118 1.6% 1.7% 2.0% -0.3%

GBP/USD 1.49 1.42 1.39 1.38 1.36 -4.2% -6.2% -6.8% -8.4%

USD/CHF 0.96 1.03 1.07 1.08 1.11 6.4% 11.1% 12.9% 16.0%

USD/CAD 1.22 1.28 1.30 1.32 1.36 4.0% 5.5% 7.0% 10.2%

AUD/USD 0.78 0.77 0.73 0.72 0.72 -0.3% -5.0% -5.9% -5.5%

NZD/USD 0.77 0.73 0.70 0.68 0.67 -3.2% -6.4% -8.3% -9.0%

Emerging Asia

USD/CNY 6.20 6.27 6.38 6.40 6.42 1.7% 2.9% 2.5% 2.1%

USD/HKD 7.75 7.76 7.76 7.76 7.76 0.1% 0.1% 0.1% 0.1%

USD/INR 62.30 63.20 64.50 64.50 64.50 0.1% 0.5% -1.0% -2.4%

USD/IDR 12859 13,250 13,800 14,100 14,120 1.1% 2.9% 3.1% 1.3%

USD/KRW 1089 1,110 1,130 1,140 1,150 1.8% 3.4% 4.3% 5.1%

USD/MYR 3.65 3.76 3.90 3.95 3.97 2.3% 5.3% 5.9% 5.8%

USD/PHP 44.43 45.00 46.00 46.50 46.70 0.9% 2.8% 3.5% 3.6%

USD/SGD 1.353 1.390 1.420 1.440 1.450 2.6% 4.6% 6.0% 6.7%

USD/THB 32.41 33.00 34.00 34.50 34.70 1.3% 3.6% 4.4% 4.3%

USD/TWD 31.17 32.00 32.70 32.80 32.90 2.8% 5.2% 5.5% 5.9%

Latin America

USD/ARS 8.87 9.34 10.11 11.56 14.74 1.6% 3.5% 4.1% 17.5%

USD/BRL 3.02 3.17 3.35 3.45 3.45 2.3% 5.0% 5.5% 3.0%

USD/COP 2490 2,550 2,550 2,550 2,500 0.8% -0.2% -1.2% -4.0%

USD/CLP 612 630 665 675 675 1.6% 6.3% 7.0% 6.1%

USD/MXN 15.20 15.50 16.13 16.50 16.50 0.8% 4.2% 5.8% 5.1%

USD/PEN 3.12 3.10 3.16 3.20 3.23 -1.9% -1.4% -1.5% -1.9%

EEMENA

EUR/CZK 27.45 27.50 27.60 27.70 27.80 0.3% 0.7% 1.2% 1.7%

EUR/HUF 302 298 300 302 304 -1.3% -1.0% -0.7% -0.3%

EUR/PLN 4.02 4.12 4.14 4.16 4.18 2.1% 2.2% 2.3% 2.4%

EUR/RON 4.41 4.42 4.44 4.46 4.48 0.2% 0.3% 0.3% 0.3%

USD/RUB 50.04 59.00 62.00 64.00 66.00 14.7% 16.9% 17.4% 18.0%

BSK/RUB 51.74 60.33 62.00 63.42 64.52 13.4% 12.9% 12.3% 11.2%

USD/TRY 2.69 2.55 2.65 2.75 2.85 -7.4% -6.1% -4.7% -3.3%

USD/ILS 3.93 3.90 4.15 4.20 4.25 -0.7% 5.7% 7.3% 8.8%

USD/EGP 7.58 7.63 7.84 7.91 7.95 -1.6% -1.4% -3.1% -5.1%

Sub-Saharan Africa

USD/GHS 3.84 3.80 3.89 3.98 4.07 -4.0% -6.5% -8.5% -10.0%

USD/KES 93.40 93.80 95.15 95.50 97.48 -1.2% -1.4% -2.5% -1.9%

USD/NGN 199 205 212 220 220 1.0% 0.0% 0.5% -2.2%

USD/UGX 3005 3027 3235 3225 3263 -1.6% 1.9% -1.7% -4.2%

USD/ZAR 11.96 12.40 12.80 13.00 13.15 2.0% 3.7% 3.6% 2.9%

USD/ZMW 7.40 7.40 7.73 7.80 7.93 -2.9% -1.2% -2.4% -5.6%

Note: Forecasts published in Emerging Markets Weekly, 17 April 2015. Source: Barclays Research

20 April 2015 16


Barclays | Commodities Weekly COMMODITIES RESEARCH ANALYSTS

Barclays 5 The North Colonnade London E14 4BB

Michael Cohen Commodities Research +1 212 526 3606 [email protected]

Suki Cooper Commodities Research +1 212 526 7896 [email protected]

Dane Davis Commodities Research + 1 212 526 6721 [email protected]

Feifei Li Commodities Research +44 (0)20 3134 6987 [email protected]

Miswin Mahesh Commodities Research +44 (0)20 7773 4291 [email protected]

Kevin Norrish Commodities Research +44 (0)20 7773 0369 [email protected]

Warren Russell Commodities Research +1 212 526 8707 [email protected]

Chi Zhang Commodities Research + 852 2903 3459 [email protected]

20 April 2015 17

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