*INVESTMENT PRODUCTS: NOT A BANK DEPOSIT. NOT GOVERNMENT INSURED. NO BANK GUARANTEE.

MAY LOSE VALUE

Citibank Wealth Management

Aug 17, 2020

with data as of Aug 13, 2020

Weekly FX Strategy FX Analysis Data Forecasts

Weekly FX Insight Please note and carefully read the

Important Disclosure on the last part
0
Please note and carefully read the Important Disclosure on the last part

Weekly FX Strategy: Gold

Gold news Strategy for Gold holders - Diversify into USD
• A lot of retail accounts seen liquidating at sub 2000, • The contraction in global jewelry demand for 2020 persists
especially those that bought gold around the 2050 – 2100 and still appears worse than the GFC. This may put
level. downside risks on gold.
• However, deterioration of US-China relations had led money • Russia (CBR) has paused fresh purchases as of April. The
flow into safe havens. Gold price rebounded to above $1900 PBoC has not increased gold holdings since last
level. September/October, either. Total net buying of EM CBs
should slow dramatically in 2020.
Gold outlook
• We lift gold short-term targets to ~$2,100/oz. 6-12m targets Strategy Reference Level Target Level
breaching $2,300/oz seems plausible. The record pace of
ETF investor inflows, a weakening US$ and negative real Bearish on Gold USD 2000 1900
yields are the primary drivers for the push higher. Bearish on Gold HKD 15,503 14,727
S2 S1 R1 R2 0-3m 6-12m
forecast forecast
$1,815 $1,900 $2,000 $2,400 $2,100 $2,300
Strategy for USD holders - Buy Gold upon retracement
• Gold ETF inflows continue to trend strong, breaking above
120t MTD and likely to match April/May levels of 150-160t in
July.
• The record pace of ETF investor inflows, aweakening US$
and negative real yields are the primary drivers for the
yellow metal to push higher.

Strategy Reference Level Target Level

Source: Bloomberg L.P., as of Aug 14, 2020
Bullish on Gold USD 1900 2000
• GoldUSD has been closer to home a break to a new highs
would suggest an extended move initially towards $2,400 Bullish on Gold HKD 14,727 15,503
(the top of the upward trend line).
The brackets are the exchange rates in terms of Hong Kong dollar,
with HKD $7.7513 exchange rate for reference 1
Please note and carefully read the Important Disclosure on the last part

Weekly FX Strategy: GBP

GBP news Strategy for GBP holders - Diversify into USD
• British Prime Minister Boris Johnson voiced optimism for a zero-tariff
British-European Union trade deal, which favor GBP.
• Risks included second wave risks, US election and the
• UK’s GDP contracted by 20.4% QQ in Q2. These data confirm the evolution of US/China relations may limit GBP’s
largest quarterly fall in GDP since these data began in 1955. This performance.
limited the performance of GBP.
GBP outlook • We expect a sharp rebound in Q3 (15.5% QQ) as the
• The UK government’s fiscal response to the COVID-19 outbreak is economy reopens. However, the outlook remains relatively
already by far the country’s largest in modern peacetime history. weak. And it faces some additional hurdles which could slow
However, in conjunction with the reluctance of the MPC to currently it down even more (Brexit uncertainty/ negotiations).
provide significant additional QE, the Gilt curve may come under
persistent upward pressure over the medium term. Higher yields Strategy Reference Level Target Level
caused by increased fiscal risk will likely weigh on the Pound. Besides,
economic data momentum indicators still suggest the UK is lagging
Bearish on GBP USD 1.3200 1.2981
behind many other G10 countries, and it faces some additional Bearish on GBP HKD 10.23 10.06
hurdles which could slow it down even more (Brexit uncertainty/
negotiations).
S2 S1 R1 R2 0-3m 6-12m LT Strategy for USD holders - Buy GBP upon retracement
forecast forecast forecast
• With a more “hawkish” than expected BoE at its recent
1.2810 1.2981 1.3170 1.3395 1.30 1.33 1.42 meeting effectively downplay the risk of negative rates (at
least in 2020), which also support GBP.
• Strong fiscal/ monetary stimulus support from the UK
government and BoE later this year and movement towards
a Brexit deal should all be further supportive of sterling over
the medium term.

Strategy Reference Level Target Level

Bullish on GBP USD 1.2981 1.3200
Source: Bloomberg L.P., as of Aug 7, 2020 Bullish on GBP HKD 10.06 10.23
• GBPUSD’s price action in the last 2 weeks now looking very like that
seen mid-July before GBPUSD broke higher again. We are long the
pair with target 1.35. Good support is seen at 1.2981 with a more The brackets are the exchange rates in terms of Hong Kong dollar,
solid floor t 1.2790-1.2810. with HKD $7.7513 exchange rate for reference 2
Please note and carefully read the Important Disclosure on the last part

The brackets are the exchange rates in terms of Hong Kong

Dollar Index dollar, with HKD $7.7513 exchange rate for reference
USD outlook: 0-3M forecast: 93.86 6-12M forecast: 90.87 LT forecast: 88.56
• Fundamentals for the USD are not supportive. Over time, the natural
state of affairs for the $ is lower, based on valuation, negative external
balances and now a Fed willing to supply unlimited cheap USD into
the global monetary system.

• The US economy runs persistent twin deficits. The US fiscal balance is

set to deteriorate to ~17% of GDP (the largest in DM). What’s also
increasingly likely is that, this time around, much of the deficit may be
monetized by the Fed (as global debt issuance increases), thus the
USD monetary base may increase, which is negative for the USD.

• Besides, the key to a prolonged lower USD in the medium term may
be relative growth differentials. Currently, European data momentum
(and much of DM) is higher than that of the US.

Source: Bloomberg L.P., as of Aug 14, 2020

EUR/USD
EUR outlook: 0-3M forecast: 1.17 6-12M forecast: 1.22 LT forecast: 1.25
• Whilst we expect a near term pause, from our cross asset lens we
note that relative short end rate differentials, relative performance of
periphery spreads vs. bunds and higher commodity prices/ higher
HICP inflation are likely to keep EUR outperformance intact.
Technically, the EUR has now broken out of medium term downtrend
and looks set to eventually test 1.20+.
Strategy Reference Level Target Level
Bearish on EUR USD 1.2000 1.1630
Bearish on EUR HKD 9.30 9.01

Bullish on EUR USD 1.1630 1.2000

Bullish on EUR HKD 9.01 9.30
Source: Bloomberg L.P., as of Aug 14, 2020 3
Please note and carefully read the Important Disclosure on the last part

The brackets are the exchange rates in terms of Hong Kong

USD/RMB dollar, with HKD $7.7513 exchange rate for reference
RMB outlook: 0-3M forecast: 6.95 6-12M forecast: 6.90 LT forecast: 6.50
• We see modest appreciation bias on USDCNY in 2H given China’s
recovery is far advanced and sizeable capital inflows. The volatility of
the RMB exchange rate would also increase on heightened US-China
tensions in 2H.

Strategy Reference Level Target Level

Bearish on RMB USD 6.9049 7.0370
Bearish on RMB HKD 1.1226 1.1015

Bullish on RMB USD 7.0370 6.9049

Bullish on RMB HKD 1.1015 1.1226
Source: Bloomberg L.P., as of Aug 14, 2020

AUD/USD
AUD outlook:
0-3M forecast: 0.72 6-12M forecast: 0.73 LT forecast: 0.75
• Overall, it seems that the RBA remains fairly optimistic and willing to
see how things evolve with the current level of monetary stimulus. 0.7250
Negative rates pretty much ruled out. Additionally, fiscal support
continues, with the governments JobKeeper and Job Seeker 0.6930
programmes recently extended. However, risks to AUD are fat tailed
(second wave risks, US election), with particular worry placed on the 0.6777(Jul low)
evolution of US/China relations.
Strategy Reference Level Target Level
Bearish on AUD USD 0.7250 0.6930
Bearish on AUD HKD 5.62 5.37

Bullish on AUD USD 0.6930 0.7250

Bullish on AUD HKD 5.37 5.62 Source: Bloomberg L.P., as of Aug 14, 2020 4
Please note and carefully read the Important Disclosure on the last part

The brackets are the exchange rates in terms of Hong Kong

NZD/USD dollar, with HKD $7.7513 exchange rate for reference
NZD outlook: 0-3M forecast: 0.66 6-12M forecast: 0.65 LT forecast: 0.65
• Amongst the wave of global liquidity, risk asset directionality and the
broad dollar will be an important driver of NZD. However, headwinds to 0.6756(Dec 2019 high)
the global recovery and continued border closures will materially affect
New Zealand. Recent strength is a drag on export earnings and dampens
0.6377(Jun low)
the outlook for inflation. The RBNZ are very aware of this. Negative rates
and/ or increased QE remain non-zero probabilities. This leaves NZD FX
vulnerable to downside.

Strategy Reference Level Target Level

Bearish on NZD USD 0.6756 0.6377
Bearish on NZD HKD 5.24 4.94

Bullish on NZD USD 0.6377 0.6756

Bullish on NZD HKD 4.94 5.24 Source: Bloomberg L.P., as of Aug 14, 2020

USD/CAD
CAD outlook: 0-3M forecast: 1.30 6-12M forecast: 1.27 LT forecast: 1.25
• We expect risk sentiment to be an important driver, but also think CAD has
catching up to do from a fundamental perspective. WTI, and correspondingly
Canada’s ToT, have found a bottom. We forecast a continued rebound here
with WTI at 56$/bbl in 12m (3Q20). Additionally, economic surprises in
Canada continue their positive trajectory. This may continue to support CAD.

Strategy Reference Level Target Level

Bearish on CAD USD 1.2996 1.3459
Bearish on CAD HKD 5.96 5.76

Bullish on CAD USD 1.3459 1.2996

Bullish on CAD HKD 5.76 5.96
Source: Bloomberg L.P., as of Aug 14, 2020 5
Please note and carefully read the Important Disclosure on the last part

The brackets are the exchange rates in terms of Hong Kong

USD/CHF dollar, with HKD $7.7513 exchange rate for reference
CHF outlook: 0-3M forecast: 0.93 6-12M forecast: 0.90 LT forecast: 0.93
• Positive European developments and improving global risk sentiment
will help CHF weaken. Tail risks that could lead to “flight to safety”
inflows to Switzerland include material escalation in COVID-19 cases,
rising geopolitical tensions (e.g. Italy, Brexit), uncertainty near to the
US election, US-China trade war escalations.

0.9363(Jul 9 low)
Strategy Reference Level Target Level
Bearish on CHF USD 0.9072 0.9363 0.9072(May 2015 low)

Bearish on CHF HKD 8.54 8.28

Bullish on CHF USD 0.9363 0.9072

Bullish on CHF HKD 8.28 8.54
Source: Bloomberg L.P., as of Aug 14, 2020

USD/JPY
JPY outlook: 0-3M forecast: 107 6-12M forecast: 107 LT forecast: 105
• We expect Japanese economic policy to remain in wait-and-see mode
for the foreseeable future. We continue to envisage a more
rangebound USD/JPY path dominated by less demand for JPY longs
as reflation persists but also by the policy responses of government
differing considerably between the US and Japan, keeping the JPY an
underperformer within the G10 complex.

Strategy Reference Level Target Level

Bearish on JPY USD 104.46 108.10
Bearish on JPY HKD 7.42 7.17

Bullish on JPY USD 108.10 104.46

Bullish on JPY HKD 7.17 7.42
Source: Bloomberg L.P., as of Aug 14, 2020 6
Please note and carefully read the Important Disclosure on the last part

Appendix 1: Last week performance, Citi interest rate and FX Forecasts

Citi FX Outlook Forecast Citi FX interest rate Forecast

0-3 month 6-12 month Long-term 8/14/2020 3Q ’20 4Q ’20 1Q ’21 2Q ’21
Dollar Index 93.86 90.87 88.56 *0.00 0.00 0.00 0.00 0.00
EUR/USD 1.17 1.22 1.25 -0.50 -0.50 -0.50 -0.50 -0.50
GBP/USD 1.30 1.33 1.42 0.10 0.10 0.00 0.00 0.00
USD/JPY 107 107 105 -0.10 -0.10 -0.10 -0.10 -0.10
USD/CHF 0.93 0.90 0.93 -0.75 -0.75 -0.75 -0.75 -0.75
AUD/USD 0.72 0.73 0.75 0.25 0.25 0.25 0.25 0.25
NZD/USD 0.66 0.65 0.65 0.25 0.25 0.25 0.25 0.25
USD/CAD 1.30 1.27 1.25 0.25 0.25 0.25 0.25 0.25
USD/CNY 6.95 6.90 6.50 3.05 2.75 2.75 2.75 2.75
Source: Citi (as of Aug 6, 2020) *lower bound Rate cut Rate hike
expectations expectations
Major Currencies Weekly Performance
Year-To-
Last week Weekly 1 month 3 month 52 week
1 month low 3 month low 52 week low Date
close Change high high high
CCY Change
USD 93.10 -0.4% 96.35 92.79 100.47 92.79 102.99 92.52 -3.5%
EUR/USD 1.1842 0.5% 1.1877 1.1384 1.1877 1.0805 1.1916 1.0636 5.7%
USD/JPY 106.60 0.6% 107.27 104.73 109.59 104.73 112.23 101.19 -1.9%
GBP/USD 1.3086 0.3% 1.3143 1.2553 1.3143 1.2116 1.3514 1.1412 -1.2%
USD/CAD 1.3266 -0.9% 1.3615 1.3223 1.4109 1.3223 1.4668 1.2952 2.0%
AUD/USD 0.7171 0.2% 0.7236 0.6971 0.7236 0.6413 0.7243 0.5510 2.4%
NZD/USD 0.6542 -1.0% 0.6699 0.6532 0.6699 0.5935 0.6756 0.5470 -2.9%
USD/CHF 0.9091 -0.4% 0.9456 0.9085 0.9731 0.9085 1.0028 0.9051 -6.4%
USD/CNY 6.9504 -0.3% 7.0184 6.9366 7.1671 6.9366 7.1876 6.8405 -0.2%
USD/CNH 6.9444 -0.4% 7.0176 6.9333 7.1763 6.9333 7.1965 6.8457 -0.3%
GOLD 1945.12 -4.4% 2063.54 1797.16 2063.54 1685.06 2075.47 1445.70 27.7%

Source: Bloomberg L.P., as of Aug 14, 2020 7

Please note and carefully read the Important Disclosure on the last part

Appendix 2: Last week’s Economic Figures

Time Importance Event Period Actual Survey Prior

Monday
08/10/20 09:30 CH !! CPI YoY Jul 2.70% 2.60% 2.50%
08/10/20 20:15 CA ! Housing Starts Jul 245.6k 205.0k 212.1k
Tuesday
08/11/20 09:30 AU ! NAB Business Confidence Jul -14 -- 0
08/11/20 14:00 UK !! Average Weekly Earnings 3M/YoY Jun -1.2% -1.1% -0.30%
08/11/20 14:00 UK !! ILO Unemployment Rate 3Mths Jun 3.90% 4.20% 3.90%
Wednesday
08/12/20 09:30 AU !! Wage Price Index YoY 2Q 1.80% 1.90% 2.20%
08/12/20 10:00 NZ !!! RBNZ Official Cash Rate Aug 0.25% 0.25% 0.25%
08/12/20 14:00 UK !! Industrial Production YoY Jun -12.5% -13.10% -20.00%
08/12/20 14:00 UK !! Manufacturing Production YoY Jun -14.6% -15.00% -23.10%
08/12/20 14:00 UK !! GDP YoY 2Q -21.7% -22.30% -1.70%
08/12/20 20:30 US !!! CPI YoY Jul 1.00% 0.70% 0.60%
08/12/20 20:30 US !!! CPI Ex Food and Energy YoY Jul 1.60% 1.10% 1.20%
Thursday
08/13/20 02:00 US !! Monthly Budget Statement Jul -$63b -$90.0b -$864.1b
08/13/20 07:01 UK !! RICS House Price Balance Jul 12.0% -5.00% -13.00%
08/13/20 09:30 AU !! Employment Change Jul 114.7k 30.0k 228.4k
08/13/20 09:30 AU !! Unemployment Rate Jul 7.50% 7.80% 7.40%
08/13/20 20:30 US ! Initial Jobless Claims Aug 963k 1100k 1191k
Friday
08/14/20 10:00 CH !! Industrial Production YoY Jul 4.80% 5.20% 4.80%
08/14/20 10:00 CH !! Retail Sales YoY Jul -1.10% 0.10% -1.80%
08/14/20 17:00 EC !! GDP SA YoY 2Q -15.00% -15.00% -15.00%
08/14/20 20:30 US !!! Retail Sales Advance MoM Jul 1.20% 2.10% 8.40%
08/14/20 20:30 US !!! Retail Sales Ex Auto MoM Jul 1.90% 1.30% 8.30%
08/14/20 21:15 US !! Industrial Production MoM Jul 3.00% 3.00% 5.70%
08/14/20 22:00 US !! U. of Mich. Sentiment Aug 72.8 72 72.5

Source: Bloomberg L.P. 8

Please note and carefully read the Important Disclosure on the last part

Appendix 3: Upcoming Economic Figures (Aug 17, 2020 – Aug 21, 2020)

Time Importance Event Period Actual Survey Prior

Monday
08/17/20 07:50 JN !! GDP Annualized SA QoQ 2Q -- -27.00% -2.20%
Tuesday
08/18/20 04:00 US ! Total Net TIC Flows Jun -- -- -$4.5b
08/18/20 09:30 AU !! RBA Minutes of Aug. Policy Meeting Aug
08/18/20 20:30 US !! Building Permits MoM Jul -- 5.30% 2.10%
08/18/20 20:30 US !! Housing Starts MoM Jul -- 3.70% 17.30%
Wednesday
08/19/20 14:00 UK !! CPI YoY Jul -- -- 0.60%
08/19/20 17:00 EC !! CPI YoY Jul -- -- 0.30%
08/19/20 20:30 CA !! CPI YoY Jul -- -- 0.70%
08/19/20 20:30 CA !! CPI Core- Common YoY% Jul -- -- 1.50%
Thursday
08/20/20 02:00 US !!! FOMC Meeting Minutes Jul -- -- --
08/20/20 20:30 US ! Initial Jobless Claims Aug -- -- --
08/20/20 22:00 US ! Leading Index Jul -- 1.00% 2.00%
Friday
08/21/20 07:01 UK !! GfK Consumer Confidence Aug -- -- --
08/21/20 07:30 JN !! Natl CPI Ex Fresh Food YoY Jul -- -- 0.00%
08/21/20 14:00 UK !! Retail Sales Ex Auto Fuel YoY Jul -- -- 1.70%
08/21/20 14:00 UK !! Retail Sales Inc Auto Fuel YoY Jul -- -- -1.60%
08/21/20 16:00 EC !! Markit Eurozone Manufacturing PMI Aug -- -- 51.8
08/21/20 16:00 EC !! Markit Eurozone Services PMI Aug -- -- 54.7
08/21/20 16:30 UK !! Markit UK PMI Manufacturing SA Aug -- -- 53.3
08/21/20 16:30 UK !! Markit/CIPS UK Services PMI Aug -- -- 56.5
08/21/20 20:30 CA !! Retail Sales MoM Jun -- -- 18.70%
08/21/20 20:30 CA !! Retail Sales Ex Auto MoM Jun -- -- 10.60%
08/21/20 22:00 US !! Existing Home Sales MoM Jul -- 12.30% 20.70%

Source: Bloomberg L.P. 9

Please note and carefully read the Important Disclosure on the last part

Important Disclosure
“Citi analysts” refers to investment professionals within Citi Research (CR) and Citi Global Markets (CGM) and voting
members of the Global Investment Committee of Global Wealth Management.
Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of
this document. Investment products are not available to US persons and not all products and services are provided by all
affiliates or are available at all locations.
This document is for general informational purposes only and is not intended as a recommendation or an offer or
solicitation for the purchase or sale of any security, currency, investment, service or to attract any funds or deposits. Save
to the extent provided otherwise in the Terms and Conditions for Accounts and Services or other applicable terms and
conditions, information in this document has been prepared without taking account of the objectives, financial situation or
needs of any particular investor. Therefore, investment products mentioned in this document may not be suitable for all
investors. Any person considering an investment should seek independent advice on the suitability or otherwise of a
particular investment. Before making any investment, each investor must obtain the investment offering materials, which
include a description of the risks, fees and expenses and the performance history, if any, which may be considered in
connection with making an investment decision. Each investor should carefully consider the risks associated with the
investment and make a determination based upon the investor’s own particular circumstances, that the investment is
consistent with the investor’s investment objectives
In any event, past performance is no guarantee of future results, and future results may not meet our expectations due to a
variety of economic, market and other factors. Further, any projections of potential risk or return are illustrative and should
not be taken as limitations of the maximum possible loss or gain. Investments are not deposits or other obligations of,
guaranteed or insured by Citibank N.A., Citigroup Inc., or any of their affiliates or subsidiaries, or by any local government
or insurance agency, and are subject to investment risk, including the possible loss of the principal amount invested.
Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations
that may cause a loss of principal.
Neither Citigroup nor its affiliates can accept responsibility for the tax treatment of any investment product, whether or not
the investment is purchased by a trust or company administered by an affiliate of Citigroup. Citigroup assumes that, before
making any commitment to invest, the investor and (where applicable, its beneficial owners) have taken whatever tax, legal
or other advice the investor/beneficial owners consider necessary and have arranged to account for any tax lawfully due on
the income or gains arising from any investment product provided by Citigroup. If an investor changes country of
residence, citizenship, nationality, or place of work, it is his/her responsibility to understand how his/her investment
transactions are affected by such change and comply with all applicable laws and regulations as and when such becomes
applicable.
10
Please note and carefully read the Important Disclosure on the last part

Important Disclosure
Although information in this document has been obtained from sources believed to be reliable, save to the extent provided
otherwise in the Terms and Conditions for Accounts and Services or other applicable terms and conditions, Citigroup and
its affiliates do not guarantee its accuracy or completeness and accept no liability for any direct or consequential losses
arising from its use. Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of
Citigroup, and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and
are subject to change based on market and other conditions. The information contained herein is also not intended to be
an exhaustive discussion of the strategies or concepts.
At any time, Citigroup companies may compensate affiliates and their representatives for providing products and services
to clients.
This is not an official statement of Citigroup Inc. and may not reflect all of your investments with or made through Citibank.
For an accurate record of your accounts and transactions, please consult your official statement.
If this document shows information coming from Citi Research, please refer to the attached link:
https://www.citivelocity.com/cvr/eppublic/citi_research_disclosures , which contains the important disclosures regarding
companies covered by Citi's Equity Research analysts, and please refer to the attached link:
https://ir.citi.com/PuXs6xELNHAu7UqkjgvWxnihtUeLtAtDxeEh%2B2qaPpPb7uukpx8Qw1vzcuidtMtqgn1BWqJqak8%3D
for details on the Citi Research ratings system.
This document may not be reproduced or circulated without Citigroup written authority. The manner of circulation and
distribution may be restricted by law or regulation in certain countries. Persons who come into possession of this document
are required to inform themselves of, and to observe such restrictions. Any unauthorised use, duplication, or disclosure of
this document is prohibited by law and may result in prosecution.
This document is distributed in Hong Kong by Citibank (Hong Kong) Limited (“CHKL”). Prices and availability of financial
instruments can be subject to change without notice. Certain high-volatility investments can be subject to sudden and large
falls in value that could equal the amount invested.

11
Please note and carefully read the Important Disclosure on the last part

Important Disclosure
Unrated or non investment grade Debt Securities typically offer a higher yield than investment grade Debt Securities, but
also present greater risks with respect to liquidity, volatility, and non-payment of principal and interest. As a result of being
classified as non investment grade Debt Securities, these Debt Securities present a greater degree of credit risk relative to
many other fixed income Debt Securities.
Higher Credit Risk – Unrated or non investment grade Debt Securities generally have predominantly speculative
characteristics with respect to the issuer’s capacity to pay interest and repay principal. There is greater risk of non-payment
of interest and loss of principal. Many issuers of these Debt Securities have experienced substantial difficulties in servicing
their debt obligations, which has led to default and restructurings. The issuers of these Debt Securities generally have to
pay a higher rate of interest than investment grade Debt Securities.
Higher Liquidity and Secondary Market Risk – The markets in which unrated or non investment grade Debt Securities are
traded are generally more limited than those in which investment grade Debt Securities are traded. This lack of liquidity
may make it more difficult to resell these Debt Securities and obtain market quotations.
Downgrade Risk – Downgrades in the credit rating of unrated or non investment grade Debt Securities by rating agencies
are generally accompanied by declines in the market value of these Debt Securities. In some circumstances, investors in
the unrated or non investment grade Debt Securities market may anticipate such downgrades as a result of these credits
being placed on “credit watch” by rating agencies, causing volatility and speculation of further credit deterioration.
Higher Vulnerability to economic cycles - During economic downturns, unrated or non investment grade Debt Securities are
typically more susceptible to price volatility and fall more in value than investment grade Debt Securities as i) investors may
reevaluate holdings in lower-quality bonds in favor of investment-grade corporate Debt Securities; ii) investors become
more risk averse; and iii) default risk rises. This is often referred to a “flight to quality”.
Event Risk – This includes any of a variety of events that can adversely affect the issuer of unrated or non investment
grade Debt Securities, and therefore the issuer’s ability to meet debt service obligations to repay principal and interest to
Debt Securities holders. Event risk may pertain to the issuer specifically, the industry or business sector of the issuer, or
generally upon the overall economy. It could have a direct or indirect impact on the issuer and their outstanding debts.

12
Please note and carefully read the Important Disclosure on the last part

Important Disclosure
Risk relating to RMB – If you choose RMB as the base currency or the alternate currency, you should also note the
following:

RMB is currently not freely convertible through banks in Hong Kong. Due to exchange controls and/or restrictions imposed
on the convertibility, utilisation or transferability of RMB (if any) which in turn is affected by, amongst other things, the PRC
government's control, there is no guarantee that disruption in the transferability, convertibility or liquidity of RMB will not
occur. There is thus a likelihood that you may not be able to convert RMB received into other freely convertible currencies.

CNH exchange rates and CNY exchange rates are currently quoted in different markets with different exchange rates,
whereby their exchange rate movements may not be in the same direction or magnitude. Therefore, the CNH exchange
rate may be different from the CNY exchange rate.

13