Deutsche Bank Outlook 2017 EMEA CIO Insights · 2016-12-20 · Outlook 2017 EMEA CIO Insights...

Deutsche BankWealth Management

Outlook 2017EMEA

CIO Insights

Rhetoric into RealityPolicy priorities and investment implications

Marketing Material

CIO InsightsLetter to Investors2

LETTER TO INVESTORS

Rhetoric into Reality

As is widely known the Chinese name their years after animals In their calendar we will soon pass from the year of the monkey to the year of the rooster In the Gregorian calendar we are perhaps one year ahead 2016 was indeed characterized by a lot of crowing but 2017 will be the year when noise needs to be translated into action Governments and individuals now have to deliver on the promises that they have made In other words this will be the year when they have to turn rhetoric into reality

We are living in a complex world but investors should not assume that events are so unpredictable as to be impossible to prepare for I think that it is possible to identify what this yearrsquos key economic and political dynamics are likely to be We summarize them in our 10 themes for 2017 discussed on the following pages

I would start with a simple observation that the theater lights will now be on different global policy actors Since the start of the global financial crisis nearly 10 years ago central banks have been playing the starring roles Unhappy electorates are now demanding that elected politicians take center-stage ndash and deliver meaningful change To do this individual governments may be tempted into radical and sometimes uncoordinated solutions that may be imperfectly explained or understood Translating verbal promises into coherent legislation will be a challenge Even if all turns out for the best and I am optimistic here investors will have to operate in a world characterized by policy divergence at multiple levels ndash fiscal monetary trade and other dimensions (Theme No 1)

Investors may also have to get used to a world characterized not only by divergence but also by a continued threat of disruption This may be particularly the case regarding trade policy (Theme No 2) Whether or not much of the current talk ever translates into actual policy action the threat alone is likely to be enough to affect the behavior of governments corporations and individuals Remember however trade restrictions are not a new phenomenon we are not currently living in a perfectly free-trading world

Clear-headed analysis will be needed for other perceived policy challenges in 2017 Even though for example there is currently a lot of talk about inflation and rising interest rates (Theme No 3) just how far are both likely to rise The answer is probably not very far at least in 2017 ndash although both will be major discussion points during the year And despite the endless talk about ldquothe great rotationrdquo out of bonds into equities are we right to be universally negative about the former asset class As discussed in Theme No 4 the answer is probably not

Past performance is not indicative of future returns Forecasts are not a reliable indicator of future performance Readers should refer to disclosures and risk warnings at the end of this document Produced in December 2016


Analysis also needs to be tempered by an assessment of the confidence we have in it For example one can argue that with equities valuations already at high levels rising corporate earnings will be necessary for a further sustained rise in the markets Consensus expectations do indeed point to such a future rise in earnings But what degree of confidence should we have in these forecasts and what could go wrong One should probably start by understanding the key sectors in regional markets and their strength and vulnerabilities (Theme No 5) If we were to identify one major theme within equities (and industry) more broadly it would have to be the continuing importance of technology We think that three areas are likely to be of particular interest in 2017 infratech healthtech and fintech (Theme No 6)

What other factors are likely to influence the overall investment environment in 2017 I think that two are already clear First despite OPECrsquos recent production agreement a substantial further rise in oil prices seems unlikely Even if OPEC can maintain production discipline (which will be difficult) US oil output should ultimately rise to fill any gap This does not argue against all forms of energy investment of course ndash but it does suggest focusing on areas that will gain from increased oil volumes rather than prices (Theme No 7) Second this should be a world characterized by further US dollar strength most aspects of policy and economic performance divergence are likely to support the greenback US dollar strength is likely to have multiple investment implications

Christian NoltingGlobal CIO

impacting for example commodity prices and individual countriesrsquo export competitiveness (Theme No 8)

I would conclude this brief assessment of 2017 with two suggestions Both relate to looking beyond the immediate future Disruptive events last year often resulted in major market moves that were quickly reversed This is also likely for many although perhaps not all market events in 2017 It will be important to distinguish between short-term market overreaction and longer-term structural shifts It may also be a year to include additional risk engineering in portfolios (Theme No 9) Finally despite all the possible market disruptions this year it is important to remember that we are living in an exciting and dynamic world with important and evolving trends that will make a material difference to how we live and how we invest We discuss a few of these longer-term trends in Theme No 10

I wish you a healthy successful and prosperous 2017

Despite all the possible market disruptions this year it is important to remember that we are living in an exciting and dynamic world with important and evolving trends that will make a material difference to how we live and how we invest


CIO InsightsContents4

Contents

Inside the coverIf 2016 was the year of rhetoric 2017 is the year it must be turned into reality Promises made to the microphone must now be translated into written legislation on policy change

16 MACROECONOMICS

Policy conundrums growth challenges

19 MULTI ASSET

The new realities for diversification and returns

25ALTERNATIVES

A defensive approach on hedge funds

26 DATA TABLES

Macroeconomic forecasts

5 TEN THEMES

10 Themes for 2017

21 EQUITIES

Limited headroom

27 DATA TABLES

Asset class forecasts

29 GLOSSARY

31 DISCLAIMER

33 CONTACTS

23 FIXED INCOME AND FX

Clouds with scattered showers ndash but not too stormy


7-

Rhetoricinto Reality

THEMES FOR 2017

Multi-dimensional divergence

NextGen tech

Pop-upprotectionism

Topped-off oil markets

Get ldquorealrdquo on interest rates

Making the dollar great again

Give credit to the bond market

Navigating headline hysteria

All eyes onearnings

Tomorrowrsquos themes today

1 6

2

3 8

4 9

5 10

CIO Insights10 Themes for 20175




Multi-dimensional divergence Divergence is likely to be evident across many policy areas ndash most notably fiscal monetary and trade This may reflect differing economic realities in individual economies different development priorities and at a more fundamental level different views as to how the world does and should work

On fiscal policy the US may have the greatest potential for fiscal stimulus but China and Japan should not be ignored As regards monetary policy Fed tightening is likely to contrast with a still accommodative European Central Bank (ECB) and Bank of Japan (BoJ) ndash with the possibility of rate cuts in India and Brazil At the moment the rhetoric around trade policy is coming from the US but this is likely to elicit a reaction from its trading partners

MarketsPolicy divergence should present opportunities Gainers may include US and Japanese equities The former should gain from US economic strength and regulatory change headline tax cuts seem likely and the repatriation of overseas cash holdings by US corporates could encourage increased mergers and acquisitions (MampA) activity The latter may benefit from Japanese yen weakness against a stronger US dollar At a sectoral level sectors to watch could include US consumer discretionary (aided by jobs growth and tax cuts) and technology

Figure 1US corporate cash held overseas

Source Bloomberg CNN Forbes JPMorgan Reuters Capital Economics Deutsche Bank Wealth Management Data as of November 2016

US Corporate Cash Held Overseas

2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD

Investment themes for 2017


1




Pop-up protectionismProtectionism is not a new phenomenon In fact as the chart shows the number of trade restrictions in force in G20 countries has been rising in recent years ndash while the ratio of world trade growth to global economic growth has declined

We donrsquot expect a major outbreak of protectionism in 2017 like it or not politicians will have to admit to the realities of a highly integrated multinational world But this is a year where the news around international economic and trade relationships will be fast-flowing and potentially unsettling The Trump administration could be trying to reposition the US in the global economy the UK will be attempting to define its Brexit strategy and major trading partners (from the European Union to China) will be working out how

Figure 2 Rising protectionism may already have contributed to slower trade growth

Source OECD WTO Secretariat for Trade Deutsche Bank Wealth Management Data as of December 2016

00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010

Ratio of World Trade Growth to World GDP Growth (top axis)

of Trade Restrictions in Force in G20 Countries (bottom axis)

to respond to all this So fears about protectionism ndash even if not matched by reality ndash may by themselves start to have an impact on geographical and other preferences

Markets Look for market segments that may appear more resilient to a lower-trade world and for regions that can build on existing intraregional links and have a reasonable degree of policy flexibility It could pay to be selective within regions however particularly with emerging markets investments in either equities or bonds And looking beyond the immediate noise keep an eye on new emerging long-term trade trends

Pop-up protectionism

2




Figure 3 Inflation is poised to move gently higher

Get ldquorealrdquo on interest rates We are all getting used to the likelihood that interest rates could move higher over the next few years This will be a brave new world for most of us developed market rate rises have been rare beasts since the start of the global financial crisis in 2008 And as this will be unfamiliar territory given the last few years the risk is that we overestimate the scale of the problem in fact the rise in rates in 2017 is likely to be relatively modest albeit with the possibility of periods of overshooting Note also that while the Fed is expected to continue its reinvestment program effectively keeping its balance sheet at current levels the European Central Bank (ECB) and Bank of Japan (BoJ) will continue to expand theirs

Even so you do need to keep an eye on inflation ndash and its likely impact on real (ie inflation-adjusted) yields In part due to base effects from 2016 and oil prices headline inflation could move higher Core inflation ndash excluding volatile items

Source Bloomberg Finance LP Deutsche Bank Wealth Management As of November 2016

Average CPI YoY () (US Europe and UK)

Nov 00

-10

00

10

20

30

40

50

Jan 07 Feb 10Dec 03 Oct 16Mar 13

such as energy ndash is grinding higher in many economies already This is likely to prove an important discussion point for markets in the first half of 2017

This may demand a slow and regularly reassessed readjustment of investment strategy

Markets An immediate response might be depending on pricing to use floating rate notes or inflation-protected government bonds At a deeper level there may be a case for becoming more cautious on some but not all high-dividend sectors and bond proxies By contrast financials could benefit from a steeper yield curve


3


Source FactSet Deutsche Bank Wealth Management Data as of November 2016

97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15

Barclays US Agg Invt Grade Credit Spread (OAS)

(AVG) Barclays US Agg Invt Grade Credit Spread (OAS)Recession Periods ndash United States

bps


Give credit to the bond market The main focus may be on equities in 2017 but the long-awaited ldquogreat rotationrdquo from bonds to equities should not yet be upon us Fixed income certainly proved much more volatile than equities in the wake of the US elections and the Fed December rate hike decision and slightly higher inflation could create headwinds in the coming year But the process is likely to be slow Also despite some upward blips in yields in the past (eg in Germany in AprilndashJune 2015 and the more globalized taper tantrum of 2013) investors have so far proved very reluctant to shift money out of fixed income over the longer term Perceived political risk particularly in Europe may provide a continuing reason for investors to sit tight

Markets There are also likely to be opportunities in corporate debt Investment grade could remain attractive in part because of its underpinning in Europe by ECB purchases High yield spreads remain

well above historic lows but we are growing rather more cautious on this asset class Emerging market bonds have been under pressure recently from concerns over rising sovereign rates but as we noted above future rate rises are likely to be modest helping this sub-asset class ndash although selectivity will remain important So beyond just providing diversification fixed income is likely to continue to have an important role to play in portfolios

Figure 4 Investment grade spreads remain above their historic lows


4



All eyes on earnings Earnings will be particularly important in 2017 as valuation multiples seem unlikely to go much higher Priceearnings (PE) valuations in the US are now at their highest level in over a decade Higher interest rates and a maturing economic cycle will further limit the scope for additional PE expansion

Markets With earnings likely to be the main driver of returns in 2017 it is important first of all to know what sectors you are buying when investing in individual regions For Europe the most important contributor to 2017 earnings growth is likely to be financials in the US it is likely to be energy in Japan probably industrials and in the emerging markets probably

technology The next question should be the degree of confidence one should have in earnings forecasts for each sector The European indicesrsquo reliance on financials as well as upcoming elections keeps us cautious on Europe By contrast we think that the US and Japan have the potential to surprise on the upside Emerging market earnings dependence on technology may prompt some short-term volatility around trade policy discussions but should provide longer-term support Of the additional factors affecting earnings exchange rates are certain to prove important in a way that goes beyond their impact on overall export competitiveness


07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16

MSCI AC World PE (LTM)

(AVG) MSCI AC World PE (LTM)

Figure 5Global valuations are already high in historical terms

All eyes on earnings

5


Source ASGARD Deutsche Bank Wealth Management Data as of November 2016

The speed of technological change has accelerated

1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950

PrintingPress Telescope Steam Engine

Telegraph

Light Bulb

First 3D Chip

Google Driverless CariPad

YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS

WordprocessorMicroprocessor

Car

TelephoneMan on the Moon


NextGen techTechnological progress and technology-led gains in productivity remain key determinants of economic growth Within information technology there are some areas that seem likely to prove particularly interesting in the medium term These include technologies applied to infrastructure (infratech) to healthcare (healthtech) and to financial services (fintech)

Infratech is likely to benefit from Donald Trumprsquos plans to revamp Americarsquos aging public infrastructure this is a program that will have major implications beyond the narrow construction sector Meanwhile healthtech should benefit from two concurrent secular trends longevity and personal health consciousness Technological progress has been most

apparent in the biotech sub-sector that seeks new ways of curing illnesses but is also prevalent in specialized medical equipment manufacturing as well as in medical screening software to name a few prominent examples At an individual level the scope for further personal health monitoring (via ldquowearablesrdquo or other devices) remains large There is also considerable potential for technological innovation in financial services of fintech ndash for example through ldquorobo-advisoryrdquo tools and a more technologically sophisticated banking infrastructure

Markets Overall the information technology sector currently appears attractive on an absolute basis and relative to the SampP 500

Figure 6 The speed of technological change has accelerated

NextGen tech

6



Topped-off oil marketsAs we are all well aware crude oil has been in a buyerrsquos market for much of the past three years Supply has consistently caught up with and exceeded demand even when prices have been very low Key to this has been US shale producersrsquo ability to cut production costs radically over a very short period of time making the US one of the worldrsquos top three oil producers globally in 2016

While we foresee a slight further rise in oil prices in 2017 we do not think that these market dynamics are likely to change fundamentally OPEC is likely to find it difficult to implement its November 2016 production cuts in full and even if it manages it US production looks set to increase steadily in response even on the basis of quite conservative productivity growth assumptions As a result even if the OPEC deal manages to markedly reduce output reduced production levels may

Source Bloomberg Finance LP Deutsche Bank Wealth Management Data as of November 2016

2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016

OPEC Crude Oil Production

OPEC Production Quota

Figure 7 OPEC usually overshoots its quotas

need to be kept in place for some time to bring down global oil inventories ndash which may place unacceptable fiscal pain on some OPEC members

The implication particularly given expected US dollar strength is that a substantial further rise in oil prices is unlikely we forecast a price of $58barrel at end 2017 (for WTI West Texas Intermediate) We would therefore be cautious on the energy sector overall

Markets Rather than focusing on the price of crude we would however look at how to benefit from increased oil volumes ndash eg through oil transport or storage-ledinvestment In the US this could bethrough Masters Limited Partnerships(MLPs)


7-



Making the dollar great againUS dollar strength is set to be a key theme in 2017 for a variety of reasons There is likely to be the obvious divergence in interest rate policy between the tightening Federal Reserve in the US and a decisively ldquodovishrdquo rest of the world Moreover the currency is likely to be reinforced by continued stronger economic growth in the US than in Europe or Japan Rate differentials between the US and other developed economies should encourage demand for US debt and thus US dollars currently for example the spread between the 10-year US Treasury and the 10-year German Bund is at its widest level in the whole history of the Eurozone and sizeable spreads are likely to persist through 2017 Not everything is positive for the US currency ndash high existing equities valuations may be a negative in this context ndash but the balance of factors seems firmly tilted towards US dollar strength

Source Deutsche Bank Wealth Management Assessment as of December 2016

Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar

Driver of currency strength

NeutralDriver of weaker currency

Figure 8 Some key factors impacting currency strength

Markets There could be multiple other investment implications of a strong US dollar Overall it is likely to be a drag on commodities and it certainly argues for a selective approach to emerging markets debt But exporters in economies with weaker currencies (eg Europe and Japan) should benefit boosting their equity markets Keep an eye too on inflation implications for countries with sharply weaker currencies for example the UK


8


Biggest threat

Second-biggest threatThird-biggest threat

0 10 20 30 40 50 60 70 80

Footnotes Data estimated from survey of 146 economists conducted November 18-28 2016Source Bloomberg Finance LP Deutsche Bank Wealth Management Data as of November 2016

Global Risks

Elections in Europe

Trumprsquos foreign policy

Putinrsquos foreign policy

Brexit

Global cyberwar

Chinarsquos leadership reshuffle


Navigating headline hysteria2016 was a year full of unsettling headlines and subsequent market overreactions in most cases soon reversed This may be even more the case in 2017 where we will first have to cope with the implementation of key commitments made in 2016 (most obviously Mr Trumprsquos policy priorities and the triggering of Article 50 by the UK to commence the Brexit process) And there are a lot of other new possible disruptive factors too ndash ranging from elections in Europe to possible realignments in foreign policy the upcoming Chinese leadership reshuffle and general concerns about cyber security among others An additional point to remember is that in the past monetary policy tightening cycles ndash as we are now embarking on in the US at least ndash have often

led to periods of increased volatility At the moment market volatility also seems rather low for the level of global economic policy uncertainty

Investors will therefore need to distinguish between short-lived market overreactions (as happened for example after the Brexit referendum vote) and longer-term structural market shifts

Markets In general 2017 could prove to be a year where portfolios may benefit from a degree of tailored risk engineering intended to provide protection against volatility so as to ensure smoother portfolio returns irrespective of market behavior There may also be scope for investment approaches addressing specific market scenarios and risks

Figure 9 Global risks


9

Forthcoming European elections Netherlands Legislative elections (March 2017)

France Presidential election (April and May 2017) Legislative elections (June 2017)

Germany Federal elections (Autumn 2017)

Czech Republic Legislative elections (October 2017)

Hungary Legislative elections (in or before Spring 2018)

Italy Legislative elections (possible)



Tomorrowrsquos themes today It is always important to look beyond immediate market movements and identify longer-term themes Infrastructure is one of these with demand here not limited to the United States In fact emerging marketsrsquo share of global infrastructure spending is expected to rise to 60 percent between 2016 and 2030

Cyber security global aging and millennials are three other key themes Cyber security is a very rapidly growing problem as illustrated by a recent estimate that the US government is expected to budget $19 billion for it in 2017 a 35 percent increase on 2016 Global aging is likely to be an even bigger driver of spending and (as with infrastructure) this is an issue for emerging markets too The implications of global aging go well beyond healthcare it should have an impact

on insurance and financial services in general as well as spending on travel and leisure Further down the aging tree the spending patterns of millennials (roughly speaking those born in the 1980s and 1990s) are becoming an increasingly important economic driver Owning property is unfeasible for this group in many urban areas meaning a reliance on renting Millennials have a fondness for consumer technology spending and this in turn affects their approach to other consumer purchases They also have a greater focus on lifestyle spending ndash for example on healthy nutritional habits ndash than the demographic cohorts that went before them

Figure 10 Millennials love technology

Average

MillennialBaby Boomer

0 10 20 30 40 50 60

Footnotes Data as of Q1 2016Source Deutsche Bank Global Markets Deutsche Bank Wealth Management

Millennials love technology

Research Products Online

Purchase Products Online

View Retail Advertising on a Mobile Device

Use Social Media on a Mobile Device

Tomorrowʹs themes today

10


CIO InsightsMacroeconomics16


MACROECONOMICS

Donald Trumprsquos presidential campaign like the Brexit referendum before it was characterized by broad assertions rather than detailed analysis Now that the rhetoric has to be translated into reality how will it affect the global economy

Policy to the fore in the USThe incoming presidentrsquos attitude to globalization has been a particular concern During his election campaign Mr Trump announced that he wanted to scrap the Trans-Pacific Partnership (TPP) In addition he intends to renegotiate various parts of the North American Free Trade Agreement (NAFTA) and has threatened to take the US out of the World Trade Organization (WTO) Whether he will really resort to protectionism is however open to debate A sudden retreat from international trade would hit the supply chains of US businesses increase their production costs reduce their competitiveness and ultimately hurt US growth For these reasons we believe that the new US administration is likely to proceed cautiously on this issue One way or another the US accounts for a much smaller share of some countries exports than one might presume as shown by Figure 11

Other electoral promises seem easier to honor Domestically the incoming US government appears set on deregulating the financial and pharmaceutical sectors reducing corporate taxation and increasing minimum-wage flexibility This could stimulate investment activity

We also expect increased spending on infrastructure and the military Since the Republicans have a majority in the US Congress they have the power to approve the higher budget deficit required for this

Deregulation lower taxation and higher spending should lift US growth But the process will take time and may only start to boost the real economy as opposed to financial markets in the second half of next year For 2017 as a whole we therefore expect only a slight acceleration in US growth and inflation with the US Federal Reserve (Fed) possibly making two to three further interest rate hikes in the course of the year In 2018 the impact of policy change on US growth could be somewhat larger

Politics center-stage in EuropeRadical policy change is unlikely to be as big an issue in the Eurozone as it is in the US although we do expect some change of emphasis by the European Central Bank (ECB see box on page 18) But politics could continue to cast a very long shadow The Brexit referendum result reminded us not to assume automatic support for the status quo upcoming elections in the Netherlands France and Germany provide scope for a further demonstration of discontent Critics of the European Union (EU) have gained support due to the sluggishness of the regionrsquos recovery from the crises of 2008ndash09 which has kept unemployment at high levels The

US policy reforms could be broad-based but may take time to implement and their impact on 2017 GDP growth may be modest Europe and Japan are likely to remain more narrowly focused on monetary policy enhancement Improving emerging market fundamentals should help offset global trade concerns



economic environment is likely to remain uninspiring possibly to these critics advantage We expect Eurozone real gross domestic product (GDP) growth of 16 percent for 2016 (in fact better than many had expected) followed by a slight slowdown to 13 percent in 2017 due in part to slightly higher oil prices and political uncertainty Consumption is likely to be the main driver but governments and businesses should also make a positive contribution with additional expenditure and investments Up to now the peripheral countries have been making slow but sure progress in implementing structural reforms we think that this will continue

Japan needs courage on structural reformPolitics could also be an issue in Japan but here the focus is on the will of the government not the electorate The Bank of Japan (BoJ) has been struggling for many years to lift the economy through unorthodox monetary policy with little success Consumer goods prices are stagnating despite the BoJrsquos enormous securities purchase scheme We expect an inflation rate of ndash02 percent for 2016 and of 02 percent for 2017 the central bank has now pushed out the goalposts for achieving its 2 percent inflation target to 2018 It is unlikely that this will be achieved with monetary policy alone One option might be using public projects for support but given the high level of debt and the mounting social cost of an aging society there is limited room for maneuver The political leadership therefore needs to focus on structural reforms to strengthen economic growth but the courage to do so seems to be lacking We expect Japanese GDP growth of 07 percent for 2017

Emerging not submerging marketsSince the US election the emerging markets have suffered from concerns about a more protectionist approach to future US trade policy However we suggest focusing on fundamentals because the economic context is brightening up most emerging markets are again in a cyclical upswing at the same time as Brazil and Russia are slowly recovering from their recessions Corporate debt levels seem to have passed their peak in many emerging markets and both real growth and

Figure 11Shares of each countrys exports going to the US and other markets in 2015

US Europe Emerging Markets

Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

Source International Monetary Fund (IMF) Direction of Trade Statistics (DOTs) Data as of November 2016



The European Central Bank (ECB) worried the continentrsquos bond markets in October when rumors emerged about a gradual phasing out ndash a so-called ldquotaperingrdquo ndash of its government bond purchasing program (quantitative easing QE)

But contrary to what happened in the US when the Fed announced tapering in May 2013 there were no major fluctuations in bond prices in the Eurozone and no sharp rise in yields The markets were quick to realize that the ECB would not want a rapid and sharp rise in interest rates for several reasons First the Eurozones recovery from the consequences of the financial and economic crisis has been slower than in the US For instance while US gross domestic product was back up to pre-crisis levels by 2011 the Eurozone didnrsquot claw back the gap until 2015 Second the core inflation rate in the US at the time of the October announcement was 17 percent 09 percentage points higher than core inflation in the Eurozone today So the ECB could afford to take its time

The ECB then unveiled an interesting compromise at its December 2016 meeting Its quantitative easing program would be extended from March 2017 to December 2017 ndash a longer extension than

producer prices are increasing ndash particularly in Asia underpinned by robust economic growth in China Chinarsquos leadership is fully aware that strong levels of GDP growth in 2016 have been partly due to state-owned enterprises making credit-financed investments something that can provide a short-term boost to the economy at best The necessity of structural reforms is acknowledged

Oil and goldThe likely failure of the oil-producing

most had expected ndash but the amount purchased under the scheme would fall from EUR80bn a month to EUR60bn a month from April onwards (a one-off reduction rather than steady taper) The underlying message was clear the ECB was committed to supporting the Eurozone economy for as long as needed but was also keen to start a move back towards normality Market reaction to the change was again muted It remains to be seen whether the announced reduction in monthly purchases can ameliorate a number of problems around QE Most pressingly QE is increasingly hampered by the shortage of German government bonds available to purchase which meet existing criteria Bonds need to have yields above the deposit rate of ndash04 percent and there is a 33 percentcap on the volume of any individualgovernment bond that can be purchasedChanging these rules would provideonly a temporary solution to the bondshortage because the ECB has to weightits government bond purchases basedon ECB ownership shares Secondaryreasons to think about further taperingmay include the impact of low interestrates on the banking sector insurersand savers as well as on shifts betweencorporate equity and debt

Risks remain however If tapering led to a sharp rise in interest rates peripheral countries with high levels of debt and unemployment such as Italy Spain and Portugal would be particularly hard hit The ECBrsquos 2 percent inflation target might start to look more distant So the ECB needs to consider some preventive countermeasures The traditional solution ndash lower interest rates ndash might well be counterproductive for the reasons mentioned above More appropriate might be the allocation of additional lending facilities to banks at favorable conditions (targeted long-term refinancing operations TLTROs) which are meant to promote onward lending to companies The banks could also use the TLTRO funds to buy government bonds which might limit the rise in interest rates as QE expires The ECB could also restart its securities purchases with a focus on bank bonds structured bonds or equities instead of scarce government bonds After the start of tapering the ECB would still have many options to manage effective interest rates in the money and capital markets we think that it can achieve appropriately modest increases in interest rates in 2017

countries to agree on output cutbacks may well keep the oil price volatile next year A slow increase in the demand for oil should however take the price of West Texas Intermediate (WTI) crude up to $58barrel by the end of 2017 Rising US interest rates and a stronger US dollar have put the brakes on the price of gold in 2016 But given the likelihood of higher inflation real interest rates are likely to remain low in the developed economies perhaps allowing a slight rise in the gold price

The ECB Reducing monthly bond purchases in 2017


CIO InsightsMulti Asset19

Footnote Asset allocation as of December 10 2016 1 Alternative investments are not suitable for and may not be available to all investors Restrictions applySources EMEA Regional Investment Committee Deutsche Bank Wealth Management Suggested allocation for USD-based investors This allocation may not be suitable for all investorsPast performance is not indicative of future returns No assurance can be given that any forecast investment objectives andor expected returns will be achieved Allocations are subject to change without notice Forecasts are based on assumptions estimates opinions and hypothetical models that may prove to be incorrect Investments come with risk The value of an investment may fall as well as rise and your capital may be at risk You might not get back the amount originally invested at any point in time Readers should refer to disclaimers and risk warnings at the end of this documentPast performance is not indicative of future returns Forecasts are not a reliable indicator of future performance Readers should refer to disclosures and risk warnings at the end of this document Produced in December 2016


MULTI ASSET

Since the US elections we have had to re-examine many familiar assumptions The biggest change from a multi-asset perspective is that we have seen a clear trend reversal in sovereign yields that puts a question mark over the future benefits of diversification and returns Rising yields reflect market concerns about future inflationary pressures as well as policy uncertainty Equity markets have fared better to uncertainty reacting positively to the prospect of policy-driven growth boosting corporate earnings It remains to be seen which assessment ndash fixed income pessimism or equity optimism ndash will be right in the longer term This will make asset allocation and careful portfolio selection all the more important

Another interesting trend is that volatility in bond markets has risen sharply but remains subdued in equity markets (Figure 13) Central-bank bond purchases have contained capital-market volatility globally in recent years not just directly but also indirectly especially for higher-yielding fixed-income segments Given the low-interest-rate environment in Europe and political uncertainties ahead it remains critical to diversify both across asset classes and across regions globally

Fixed income still has valueFixed income is likely to face headwinds from low and rising yields We maintain our cautious stance towards sovereigns but still see some opportunities in

Steacutephane JunodCIO EMEA and Head of Portfolio Management EMEA

Equity

Developed Markets 360

Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100

Figure 12Asset allocation (balanced portfolio as of December 10 2016)

Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit

Fixed Income Emerging Markets

Fixed Income Sovereigns

Equity

Equity Developed Markets

Equity Emerging Markets

10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816


investment grade The remaining yield is less attractive but we expect ongoing diversification benefits from including fixed income in a portfolio provided sovereign yields do not overshoot substantially Strategically we have a bias towards shorter duration by actively managing interest-rate sensitivity and continue to take some risk in fixed-income credit albeit to a lesser extent than previously We remain invested in high yield (HY) and emerging markets hard-currency debt from an income perspective but on a selective basis and have recently become rather more cautious on the former

Modest equity returnsOverall the riskreward profile for equities clearly seems to have become more favorable compared to fixed income For now we therefore prefer to take on risk via equities and have increased our exposure to this asset class But we must always remember that in historical terms we are very late in the equities cycle This cycle may be extended for perhaps another year thanks to fiscal stimulus in the United States but average equity returns much over the mid-single-digit range look unlikely in 2017

Consider return componentsFor this reason it is particularly important to focus on the different components of total return most notably income via coupons on fixed-income credit and dividends on the equity side Following recent volatility there are plenty of opportunities to build up positions provided the securities are selected with adequate care

Within equities we prefer the US and Japan over Europe Despite stabilizing commodity prices and the continued earnings recovery in selected emerging markets these markets may be overshadowed by concerns around some

of President-elect Trumprsquos economic policies For this reason we currently prefer developed markets over emerging markets

Currencies are criticalCurrency movements are another critical consideration when managing a portfolio We see the US dollar trending higher against the euro reaching parity by the end of 2017 and also expect it to gain ground against the Japanese yen Alternative investments particularly in certain infrastructure segments may be worth considering Gold may struggle to make significant gains from its current price but could serve as a better diversifier than sovereigns over the course of next year This late in the investment cycle active risk management remains more critical than ever

Another interesting trend is that volatility in bond markets has risen sharply but remains subdued in equity markets

Figure 13 Divergent Equity (VIX) and Treasuries (MOVE) volatility indices

MOVE Index (LHS) VIX Index (RHS)

Source Bloomberg Finance LP Deutsche Bank Wealth Management Data as of November 29 2016


CIO InsightsEquities21

Limited headroomEQUITIES

Is it really so surprising that US shares were the big winner of the US election Stronger economic growth ndash as promised by Mr Trump ndash is badly needed by US companies because organic growth is still limited as the third quarter reporting season again demonstrated But it would help American companies planning security if they could soon learn something more tangible about how Trumps dream of a more American America is to be achieved Although Mr Trump made an attempt shortly after the election to tone down on several of his promises he does not appear to be willing to back away from them completely ndash not least because of his own core followers Generally we believe US companies could gain in the near term from a Trump presidency (notably through tax relief and deregulation) but could well suffer under his agenda over the long term (for example through counterattacks from alienated trading partners or difficulty in recruiting personnel) The stronger US dollar is also an immediate headwind

for higher valuation multiples ndash and this means that the US stock market like almost all markets is already close to our target levels Returns may well once again be generated largely through dividends

Sector gainersBut we continue to see better opportunities in individual stocks and sectors On a sector level we are raising the healthcare sector to overweight Its underperformance over the last year has improved its relative valuation the sectorrsquos political risk also appears to have declined with Mrs Clintons defeat We also currently have an overweight on technology We are skeptical when it comes to utilities and defensive consumer goods stocks

We also see opportunities for future tactical positioning given the likelihood of further Fed rate rises possible changes in ECB policy and high levels of political uncertainty on both sides of the Atlantic

Generally we believe US companies could gain in the near term from a Trump presidency

The arguments against increased valuationsEven though the new US governments urge for immediate action is very likely to be broadly supported by a Republican-dominated Congress this may not be enough to fuel a sustained further rally in 2017 The US stock markets are trading close to historical highs In the immediate future there seems little scope for margins to expand further given both wage pressures and a stronger US dollar In addition companiesrsquo refinancing costs will increase due to the likely rise in the US interest rates So it is difficult to argue

At a geographical level we believe that higher US valuation spreads (Figure 14) are largely justified but do not yet see a good reason for further adjusting our forecasts Although the repatriation of US profits held abroad could again inspire US share buybacks this should at the same time be countered by the likely rise in US interest rates Over the next year European equities could benefit from an improving economic environment and subsiding concerns about the health of the European financial sector However major political risks continue to exist within Europe meaning that we remain wary here

Source FactSet Research Systems Inc Bloomberg Finance LP Deutsche Bank Wealth Management Data as of November 2016

10 11 12 13 14 15 16 17 18

Average 15 years

CurrentRange 12 months

From a valuation standpoint the US is already great againv

MSCI Japan Index

MSCI Emerging Market Index

Stoxx 600 Index

DAX

SampP 500 Index

Figure 14From a valuation standpoint the US is already great again



By contrast we maintain our positive view of Japanese equities due to the long-term improvement in corporate governance and firmsrsquo ability to finance increasing payouts from profits and liquidity reserves The end to the yen strength may give further impetus to Japans exporters We are more positive than many on emerging markets pointing to economic recovery in many of these markets and the possibility of profits growth for the first time in four years But Donald Trumps anti-trade plans and rising US yields could have negative effects here

Figure 15Equities by region

United States (SampP 500)Return ytd +111

End-Dec 2017 forecast 2350

UK (FTSE 100)Return ytd +116


Eurozone (Eurostoxx 50)Return ytd ndash09


Latam (MSCI Latam)Return ytd +276End-Dec 2017 forecast 2350

Switzerland (SMI)Return ytd ndash74End-Dec 2017 forecast 8250

Asia ex Japan (MSCI Asia ex Japan)

Return ytd +56End-Dec 2017 forecast 550

Japan (MSCI Japan)Return ytd ndash10End-Dec 2017 forecast 950

Data as of December 14 2016 forecasts as of December 15 2016 All returns are year to date (YTD) Source Bloomberg Finance LP Deutsche Bank Wealth Management


CIO InsightsFixed Income and FX23


FIXED INCOME AND FX

Since the US election yields on 10-year US Treasuries have gone past the 2 percent threshold for the first time since last January The rise in yields is in large part the result of higher growth expectations investors are assuming that the economic policies of the future president will deliver results In addition almost half the rise in yields has been due to expectations of higher inflation rates

After a long period of worrying about deflation any increase in yield would appear welcome ndash as long as inflation rates do not move up towards 3 percent which we do not expect in 2017 But we would also caution against expecting President-elect Trumprsquos economic policies to have too much of an impact on the overall rate of US GDP growth next year The three-pronged approach of tax cuts deregulation and infrastructure spending should on paper be able to deliver stimulus to the US economy But agreement on his plans may prove difficult given that many in Congress (and likely in the new administration) are averse in principle to increasing debt levels It is also worth noting that this would be the first major fiscal package to be implemented at a time

when the United States is almost at full employment and not in a recessionary environment So there are good reasons not to expect a further sweeping rise in yields

The trade-weighted US dollar index has also made gains since the US election rising to a 13-year high Despite its recent gains our initial approach is not to bet against current US dollar momentum Interest-rate differentials will remain important We expect the US Federal Reserve (Fed) to make two or three further rate rises during the course of 2017 by contrast the European Central Bank (ECB) will probably keep rates on hold and has already extended its quantitative easing program up to December 2017 making a a continuation of high spreads between US and Eurozone bonds likely This should further strengthen the US dollar although the widening of bond spreads should be limited by two factors growing discussions around further ECB tapering as the year progresses and the indirect effect that the monetary policies of the European and Japanese central banks have on US interest rates

900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016

Figure 16 US and European yields compared

US high yield1

Euro high yield2

US investment grade3

Euro investment grade4

1 Barclays US Corporate High Yield Index (vs US Treasuries)2 Bank of America Merrill Lynch Euro Non-Financial High Yield Constrained Index (vs German Bunds)3 Barclays US Aggregate Bond Index (vs US Treasuries)4 iBoxx euro Corporate Index (vs German Bunds)




Within the asset classIn terms of our investment strategy we would also consider shortening a portfolios maturity focusing on less interest-rate-sensitive securities We continue to see some opportunities in high yield bonds but have recently grown rather more cautious here Trumps election has had a noticeable impact on emerging-market bonds but we remain positive in the light of improving fundamentals in many of these economies Of course Trumps rhetoric on trade restrictions coupled with rising US interest rates could put some pressure on this asset class but this may present buying opportunities

We also continue to favor investment-grade corporate credit from Europe and the United States which benefits from low default rates the economic environment and ndash in the case of European bonds ndash purchases by the ECB We anticipate more volatility in the United States due to the interest-rate environment but expect investors to be rewarded with higher yields (Figure 16)

The US dollar has profited twice from Trumps win

First it is being pushed higher by the expectation that a Republican-dominated Congress could enable the new president to breathe life into the countrys lukewarm economic growth Such expectations are already reflected by the rise in longer-term US interest rates Rates should also rise on the short end given our expectations that the Fed is likely to raise rates two to three times in 2017 This would further increase the divergence in monetary policies and interest-rate levels compared to other key regions The second political source of support for the US dollar is the hope of a tax-induced repatriation of US assets invested abroad

Will Trump make the dollar great again

However any further appreciation in the dollar could elicit verbal intervention by the Fed or the US Treasury Department intended to reduce expectations A deterioration in the risk environment for example in the form of a sharp correction in the stock market could also slow down US dollar momentum and strengthen funding currencies such as the euro and the yen Despite these possibilities we believe that the dollar will remain strong and expect the EURUSD to reach parity by the end of 2017 Our 12-month view for the USDJPY is 120

Other forecasts are given on page 26

Eurozone peripheral bonds may appeal if the marketrsquos assessment of likely political and economic developments in these economies starts to look more pessimistic But in the core European countries and the United States on the other hand investors face a real threat from negative total returns on government bonds We do not however expect an end to the low interest era anytime soon


Figure 17Existing investor allocations to infrastructure debt vs target levels

Average of current allocation to infrastructure debt

Average of target allocation to infrastructure debt

CIO Insights Alternatives25


ALTERNATIVES

Recent political events have served as a reminder if any was needed that one needs to pay particular attention to hidden risks in portfolios Our current overall positioning on liquid hedge funds therefore has a defensive look to it We are still underweight on longshort strategies as effective relative selection may well remain difficult in the current environment By contrast we have become more positive on Commodity Trading Advisors (CTAs) as we expect asset-price volatility in a period when capital markets cope with US interest rate hikes and attempt to digest continued political uncertainty However here ndash as with discretionary macro strategies ndash it may be necessary to focus on approaches that have been able to perform in such policy-driven markets In particular we would concentrate on shorter-term trend-following strategies (those driven by technical analysis of market trends rather than fundamentals) These have shownthemselves more agile at rotating exposure when trends have changed as shown by counter-trend CTA strategiesrsquo successes during the January 2016 market sell-off and in the immediate aftermath of the Brexit referendum We would be rather more wary of consensus-type positions that are currently popular within longer-duration CTA strategies In many portfolios it could be desirable to reduce correlation with traditional credit investing and to do this it may be worth considering more unusual and less liquid strategies in this space These could include areas such as litigation finance and infrastructure

Infrastructurersquos continuing appealOur enthusiasm for infrastructure pre-dates Mr Trumprsquos election success But with the sector likely to be a key priority for his administration investors will now pay it even more attention Capital markets are likely to play an increasingly critical role in funding infrastructure reflecting budgetary pressures on governments in the US and elsewhere and global demand for infrastructure debt is likely to remain strong This demand may be reinforced by the fact that interest rates are likely to remain low by historical standards encouraging investors driven by long-duration strategies to look for lower-risk investments that can offer a better riskreturn profile than government bonds Infrastructure bond investment strategies also offer the opportunity for diversification and potentially appealing risk-adjusted returns Moreover cash flows generated by infrastructure assets tend to be predictable in nature and visible over the long term which may also help to lower default rates And if there is a default the hard-asset-backed nature of infrastructure assets and relative stability of asset valuations tend to translate into higher recovery rates for creditors This asset class may also be boosted by estimates (as shown in Figure 17) that the actual current allocation of a range of investors to infrastructure debt is lower than their target levels

Source Deutsche Asset Management estimates based on the Prequin database as of September 30 2016 Data covers North America and Western Europe only

It could be desirable to reduce correlation with traditional credit investing

Assetmanager

Insurancecompany

Private-sectorpension fund

Publicpension fund

39

61

25

47

30

52

16

27



CIO InsightsData Tables26

DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63

Consumer price inflation ()

US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15

Current account balance ( of GDP)

US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25

Fiscal balance ( of GDP)

US ndash32 ndash35

Eurozone ndash19 ndash19

UK ndash35 ndash40

Japan ndash60 ndash52

China ndash24 ndash25

F = Forecasts Please see risk warnings for more information Forecasts are based on assumptions estimates opinions and hypothetical models or analysis which may prove to be incorrect No assurance can be given that any forecast or target will be achieved Past performance is not indicative of future returns For the US GDP measure is calendar year but inflation measure is core PCE Dec to Dec Forecast for US Headline PCE (DecDec) is 14 in 2016 and 19 In 2017 US GDP Q4Q4 growth is 15 in 2016 and 22 in 2017Source Deutsche Bank Wealth Management As of December 15 2016

DEUTSCHE BANK WEALTH MANAGEMENT

CIO Insights Data Tables27


F = Forecasts Please see risk warnings for more information Forecasts are based on assumptions estimates opinions and hypothetical models or analysis which may prove to be incorrect No assurance can be given that any forecast or target will be achieved Past performance is not indicative of future returns Source Deutsche Bank Wealth Management As of December 15 2016

DEUTSCHE BANK WEALTH MANAGEMENT CIO OFFICE

Benchmark interest rates Official rate End-Dec 2017F

United States Fed fund rates 100ndash125

Eurozone Refi rate 0

United Kingdom Repo rate 025

Japan Overnight call rate 0

China 1 year lending rate 435

FX End-Dec 2017F

EUR vs USD EURUSD 100

USD vs JPY USDJPY 120

EUR vs JPY EURJPY 120

EUR vs GBP EURGBP 085

GBP vs USD GBPUSD 118

USD vs CNY USDCNY 73

Equities Market Index End-Dec 2017F

US SampP 500 2350

Germany DAX 11800

Eurozone Eurostoxx 50 3300

Europe Stoxx 600 370

Japan MSCI Japan 950

Switzerland SMI 8250

UK FTSE 100 7000

Emerging Markets MSCI EM 890

Asia ex Japan MSCI Asia ex Japan 550

Latam MSCI Latam 2350

Commodities End-Dec 2017F

Gold Gold spot 1200

Oil WTI spot 58



Fixed Income Market Index End-Dec 2017F

US

UST 2yr US 2y yield 180



Municipals 10Y AAAUST ratio 93

US IG Corp BarCap US Credit 110bp

US HY Barclays US HY 450bp

Securitized MBS MTGENFCL vs 7y UST 105bp

Europe

Schatz 2yr GER 2y yield ndash050

Bund 10yr GER 10y yield 080


Gilt 10yr UK 10y yield 175

EUR IG Corp iBoxx Eur Corp all 100bp

EUR HYML EUR Non-Fin HY Constr Index

375bp

Securitized Covered iBoxx Covered 10bp

Italy ndash forecasted spread over German Bunds GTITL10Y Corp 150bp

Spain ndash forecasted spread over German Bunds GTESP10Y Corp 130bp

Asia Pacific

JGB 2yr JPN 2y yield ndash020

JGB 10yr JPN 10y yield 000

Asia Credit JACI Index 270bp

Global

EM Sovereign EMBIG Div 340bp

EM Credit CEMBI 350bp

CIO Insights Glossary29

The Bank of Japan (BoJ) is the central bank of Japan

Brexit is a combination of the words Britain and Exit and describes the possible exit of the United Kingdom of the European Union

Bunds are longer-term bonds issued by the German government

Congress is the bicameral federal legislature of the United States

Commodity Trading Advisors (CTAs) strategies involve trading futures contracts traded on exchanges

Consumer discretionary goods are those which are non-essential to consumer goods consumer discretionary stocks therefore tend to underperform the overall in a struggling economy and outperform in an upturn

Core inflation refers to a measure of inflation which excludes some volatile components (eg energy) These excluded components can vary country by country

Correlation is a statistical measure of how two securities (or other variables) move in relation to each other

The current account balance is the balance of trade net primary income or factor income and net cash transfers

Discretionary macro strategies attempt to gain from macroeconomic policy or political changes

Diversification refers to the dispersal of investments across asset types geographies and so on with the aim of reducing risk or boosting risk-adjusted returns

Dividends are payments made by a company to its shareholders

Earnings per share are calculated as a companies net income minus dividends of preferred stock all divided by the total number of shares outstanding

An emerging market (EM) is a country that has some characteristics of a developed market in terms of market efficiency liquidity and other factors but does not meet standards to be a developed market

The European Central Bank (ECB) is the central bank for the Eurozone

The Eurostoxx 50 Index tracks the performance of blue-chip stocks in the Eurozone the Eurostoxx 600 has a wider scope taking in 600 companies across 18 European Union countries

The Federal Reserve is the central bank of the United States Its Federal Open Market Committee (FOMC) meets to determine interest rate policy

Fintech is a general term for the innovative application of information technology in the financial sector

The FTSE 100 Index tracks the performance of the 100 major companies trading on the London Stock Exchange

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a countrys borders in a specific time period

Hedge funds are alternative less regulated investment vehicles using pooled funds that may use a number of different strategies in order to earn active return for their investors

High yield (HY) bonds are high-paying bonds with a lower credit rating than investment-grade corporate bonds Treasury bonds and municipal bonds

Infratech refers to the application of technology in infrastructure

JPY is the currency code for the Japanese yen the Japanese currency

Longshort equity strategies are investing strategies of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline

Mergers and acquisitions (MampA) are two key methods of corporate consolidation A merger is a combination of two companies to form a new company while an acquisition is the purchase of one company by another in which no new company is formed

Millennials is a term used to refer to people born in the 1980s and 1990s although this definition can vary

Master Limited Partnership (MLP) are limited partnerships that are publicly traded on an exchange

The MSCI Asia ex Japan Index captures large- and mid-cap representation across 2 of 3 developed market countries (excluding Japan) and 8 emerging market countries in Asia

The MSCI EM Index captures large- and mid-cap representation across 23 emerging market countries

The MSCI Japan Index is designed to measure the performance of the large- and mid-cap segments of the Japanese market

A nominal rate or value does not make adjustments to reflect factors such as seasonality or inflation

The Organization of the Petroleum Exporting Countries (OPEC) is an international organization with the mandate to coordinate and unify the petroleum policies of its 12 members

Glossary


Priceearnings (PE) ratios measure a companys current share price relative to its per-share earnings In this context LTM refers to last 12 months earnings

Protectionism refers to policies due to limit trade between economies through tariffs quotas or other means

Quantitative easing (QE) is an unconventional monetary policy tool in which a central bank conducts a broad-based asset purchase

The SampP 500 Index includes 500 leading US companies capturing approximately 80 coverage of available US market capitalization

Share buybacks are purchases by a company of shares on the open market undertaken for a variety of reasons

A strategic asset allocation process involves setting preferred allocations for asset classes on a medium- to long-term time horizon

The Swiss Market Index (SMI) includes 20 large- and mid-cap stocks

Targeted long-term refinancing operations (TLTROs) are used by the ECB to provide financing to Eurozone banks

A trade-weighted exchange rate index is weighted according to the share of trade with each partner country

The Trans Pacific Partnership (TPP) is a planned trade agreement between 12 Pacific Rim countries

Treasuries are bonds issued by the US government

Trend-following strategies are based on technical analysis of market moves rather than on the underlying fundamentals

Valuation attempts to quantify the attractiveness of an asset for example through looking at a firms stock price in relation to its earnings

Volatility is the degree of variation of a trading-price series over time

West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing

The VIX Index refers to the CBOE Index which measures the implied volatility of SampP 500 Index options It is a broadly-used measure of market volatility

The World Trade Organization (WTO) is an intergovernmental organization founded in 1995 that provides a framework for trade agreements

The yield curve shows the different rates for bonds of differing maturities but the same credit quality

CIO Insights Disclaimer31

Disclaimer

Past performance is not indicative of future returns No assurance can be given that any forecast investment objectives andor expected returns will be achieved Allocations are subject to change without notice Forecasts are based on assumptions estimates opinions and hypothetical models that may prove to be incorrect Investments are subject to investment risk including market fluctuations regulatory change possible delays in repayment and loss of income and principal invested Investments come with risk The value of investments can fall as well as rise and you might not get back the amount originally invested at any point in time

Investments in Foreign Countries ndash Such investments may be in countries that prove to be politically or economically unstable Furthermore in the case of investments in foreign securities or other assets any fluctuations in currency exchange rates will affect the value of the investments and any restrictions imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate foreign currency

Macroeconomics Risk ndash Such investments may be in countries that prove to be politically or economically unstable Furthermore in the case of investments in foreign securities or other assets any fluctuations in currency exchange rates will affect the value of the investments and any restrictions imposed to prevent capital flight may make it difficult or impossible to exchange or repatriate foreign currency

Equity Market Risk ndash Risks in equity markets are linked to the change of spot and forward prices of equities on the relevant stock exchanges These changes can be specifically influenced by among others the relevant companiesrsquo financial health dividend yields repurchase rates and other macroeconomic factors

Fixed Income Risk ndash The values of the fixed income instruments will fluctuate and may lose value as bond values decline as interest rates rise Certain bonds and fixed income instruments may be callable If called the investor will experience a shorter maturity than anticipated Bonds referenced herein are exposed to credit risk or the risk that the bond will be downgraded and inflation risk or the risk that the rate of the bondrsquos yield will not provide a positive return over the rate of inflation Bonds are subject to interest rate risk When interest rates rise bond prices fall generally the longer a bondrsquos maturity the more sensitive it is to this risk Bonds may also be subject to call risk which is the risk that the issuer will redeem the debt at its option fully or partially before the scheduled maturity date The market value of debt instruments may fluctuate and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer Bonds are subject to the credit risk of the issuer This is the risk that the issuer might be unable to make interest andor principal payments on a timely basis Bonds are also subject to reinvestment risk which is the risk that principal andor interest payments from a given investment may be reinvested at a lower interest rate

Alternative investments ndash (such Hedge Funds Private Equity Non Traded REITs) may be speculative and involve significant risks including illiquidity heightened potential for loss and lack of transparency Alternatives are not suitable for all clients

Deutsche Bank AG Deutsche Bank Wealth Management as of December 14 2016


Important information

Deutsche Bank Wealth Management offers wealth management solutions for wealthy individuals their families and select institutions worldwide Deutsche Bank Wealth Management through Deutsche Bank AG its affiliated companies and its officers and employees (collectively ldquoDeutsche Bankrdquo) are communicating this document in good faith and on the following basis

This document has been prepared without consideration of the investment needs objectives or financial circumstances of any investor Before making an investment decision investors need to consider with or without the assistance of an investment adviser whether the investments and strategies described or provided by Deutsche Bank are appropriate in light of their particular investment needs objectives and financial circumstances Furthermore this document is for informationdiscussion purposes only and does not constitute an offer recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice

Deutsche Bank does not give tax or legal advice Investors should seek advice from their own tax experts and lawyers in considering investments and strategies suggested by Deutsche Bank Investments with Deutsche Bank are not guaranteed unless specified Unless notified to the contrary in a particular case investment instruments are not insured by the Federal Deposit Insurance Corporation (ldquoFDICrdquo) or any other governmental entity and are not guaranteed by or obligations of Deutsche Bank AG or its affiliates

Although information in this document has been obtained from sources believed to be reliable we do not guarantee its accuracy completeness or fairness and it should not be relied upon as such All opinions and estimates herein including forecast returns reflect our judgment on the date of this report and are subject to change without notice and involve a number of assumptions which may not prove valid

Investments are subject to various risks including market fluctuations regulatory change counterparty risk possible delays in repayment and loss of income and principal invested The value of investments can fall as well as rise and you may not recover the amount originally invested at any point in time Furthermore substantial fluctuations of the value of the investment are possible even over short periods of time

This publication contains forward-looking statements Forward-looking statements include but are not limited to assumptions estimates projections opinions models and hypothetical performance analysis The forward-looking statements expressed constitute the authorrsquos judgment as of the date of this material Forward-looking statements involve significant elements of subjective judgments and analyses and changes thereto andor consideration of different or additional factors could have a material impact on the results indicated Therefore actual results may vary perhaps materially from the results contained herein No representation or warranty is made by Deutsche Bank as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained herein The terms of any investment will be exclusively subject to the detailed provisions including risk considerations contained in the Offering Documents When making an investment decision you should rely on the final documentation relating to the transaction and not the summary contained herein

This document may not be reproduced or circulated without our written authority The manner of circulation and distribution of this document may be restricted by law or regulation in certain countries including the United States This document is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality state country or other jurisdiction including the United States where such distribution publication availability or use would be contrary to law or regulation or which would subject Deutsche Bank to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction Persons into whose possession this document may come are required to inform themselves of and to observe such restrictions

Past performance is no guarantee of future results nothing contained herein shall constitute any representation or warranty as to future performance Further information is available upon investorrsquos request

This document may not be distributed in Canada Japan the United States of America or to any US person

copy 2016 Deutsche Bank AG



Kingdom of BahrainFor Residents of the Kingdom of Bahrain This document does not constitute an offer for sale of or participation in securities derivatives or funds marketed in Bahrain within the meaning of Bahrain Monetary Agency Regulations All applications for investment should be received and any allotments should be made in each case from outside of Bahrain This document has been prepared for private information purposes of intended investors only who will be institutions No invitation shall be made to the public in the Kingdom of Bahrain and this document will not be issued passed to or made available to the public generally The Central Bank (CBB) has not reviewed nor has it approved this document or the marketing of such securities derivatives or funds in the Kingdom of Bahrain Accordingly the securities derivatives or funds may not be offered or sold in Bahrain or to residents thereof except as permitted by Bahrain law The CBB is not responsible for performance of the securities derivatives or funds

State of KuwaitThis document has been sent to you at your own request This presentation is not for general circulation to the public in Kuwait The Interests have not been licensed for offering in Kuwait by the Kuwait Capital Markets Authority or any other relevant Kuwaiti government agency The offering of the Interests in Kuwait on the basis of a private placement or public offering is therefore restricted in accordance with Decree Law No 31 of 1990 and the implementing regulations thereto (as amended) and Law No 7 of 2010 and the bylaws thereto (as amended) No private or public offering of the Interests is being made in Kuwait and no agreement relating to the sale of the Interests will be concluded in Kuwait No marketing or solicitation or inducement activities are being used to offer or market the Interests in Kuwait

United Arab EmiratesDeutsche Bank AG in the Dubai International Financial Centre (registered no 00045) is regulated by the Dubai Financial Services Authority Deutsche Bank AG ndash DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license Principal place of business in the DIFC Dubai International Financial Centre The Gate Village Building 5 PO Box 504902 Dubai UAE This information has been distributed by Deutsche Bank AG Related financial products or services are only available to Professional Clients as defined by the Dubai Financial Services Authority

State of QatarDeutsche Bank AG in the Qatar Financial Centre (registered no 00032) is regulated by the Qatar Financial Centre Regulatory Authority Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall within the scope of its existing QFCRA license Principal place of business in the QFC Qatar Financial Centre Tower West Bay Level 5 PO Box 14928 Doha Qatar This information has been distributed by Deutsche Bank AG Related financial products or services are only available to Business Customers as defined by the Qatar Financial Centre Regulatory Authority

Kingdom of Saudi ArabiaDeutsche Securities Saudi Arabia LLC Company (registered no 07073-37) is regulated by the Capital Market Authority Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall within the scope of its existing CMA license Principal place of business in Saudi Arabia King Fahad Road Al Olaya District PO Box 301809 Faisaliah Tower ndash 17th Floor 11372 Riyadh Saudi Arabia



Important disclosures

In the UK this publication is considered a financial promotion and is approved by Deutsche Asset Management (UK) Limited on behalf of all entities trading as Deutsche Bank Wealth Management in the UK

Deutsche Bank Wealth Management (DBWM) offers wealth management solutions for wealthy individuals their families and select institutions worldwide and is part of the Deutsche Bank Group DBWM is communicating this document in good faith and on the following basis

This document is a financial promotion and is for general information purposes only and consequently may not be complete or accurate for your specific purposes It is not intended to be an offer or solicitation advice or recommendation or the basis for any contract to purchase or sell any security or other instrument or for Deutsche Bank to enter into or arrange any type of transaction as a consequence of any information contained herein It has been prepared without consideration of the investment needs objectives or financial circumstances of any investor This document does not identify all the risks (direct and indirect) or other considerations which might be material to you when entering into a transaction Before making an investment decision investors need to consider with or without the assistance of an investment adviser whether the investments and strategies described or provided by Deutsche Bank are suitability and appropriate in light of their particular investment needs objectives and financial circumstances We assume no responsibility to advise the recipients of this document with regard to changes in our views

Past performance is no guarantee of future results

The products mentioned in this document may be subject to investment risk including market fluctuations regulatory change counterparty risk possible delays in repayment and loss of income and principal invested Additionally investments denominated in an alternative currency will be subject to currency risk changes in exchange rates which may have an adverse effect on the value price or income of the investment The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time We have gathered the information contained in this document from sources we believe to be reliable but we do not guarantee the accuracy completeness or fairness of such information and it should not be relied on as such Deutsche Bank has no obligation to update modify or amend this document or to otherwise notify the recipient in the event that any matter stated herein or any opinion projection forecast or estimate set forth herein changes or subsequently becomes inaccurate

Deutsche Bank does not give taxation or legal advice Prospective investors should seek advice from their own taxation agents and lawyers regarding the tax consequences on the purchase ownership disposal redemption or transfer of the investments and strategies suggested by Deutsche Bank The relevant tax laws or regulations of the tax authorities may change at any time Deutsche Bank is not responsible for and has no obligation with respect to any tax implications on the investment suggested


This document contains forward-looking statements Forward-looking statements include but are not limited to assumptions estimates projections opinions models and hypothetical performance analysis The forward-looking statements expressed constitute the authorlsquos judgement as of the date of this material Forward-looking statements involve significant elements of subjective judgments and analyses and changes thereto andor consideration of different or additional factors could have a material impact on the results indicated Therefore actual results may vary perhaps materially from the results contained herein No representation or warranty is made by Deutsche Bank as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained in this document

Deutsche Bank conducts its business according to the principle that it must manage conflicts of interest fairly both between itself and its clients and between one client and another

As a global financial services provider Deutsche Bank faces actual and potential Conflicts of Interest periodically The Bankrsquos policy is to take all reasonable steps to maintain and operate effective organisational and administrative arrangements to identify and manage relevant conflicts Senior management within the Bank are responsible for ensuring that the Bankrsquos systems controls and procedures are adequate to identify and manage Conflicts of Interest

This information is communicated by Deutsche Bank Wealth ManagementDeutsche Bank Wealth Management is a trading name of Deutsche Asset Management (UK) Limited Registered in England amp Wales No 5233891Registered Office Winchester House 1 Great Winchester Street London EC2N 2DB Deutsche Asset Management (UK) Limited is authorised and regulated by the Financial Conduct Authority Financial Services Registration Number 429806This document may not be distributed in Canada Japan the United States of America or to any US person



Risk warnings

Investments are subject to investment risk including market fluctuations regulatory change possible delays in repayment and loss of income and principal invested The value of investments can fall as well as rise and you might not get back the amount originally invested at any point in time


Foreign ExchangeCurrency ndash Such transactions involve multiple risks including currency risk and settlement risk Economic or financial instability lack of timely or reliable financial information or unfavorable political or legal developments may substantially and permanently alter the conditions terms marketability or price of a foreign currency Profits and losses in transactions in foreign exchange will also be affected by fluctuations in currency where there is a need to convert the productrsquos denomination(s) to another currency Time zone differences may cause several hours to elapse between a payment being made in one currency and an offsetting payment in another currency Relevant movements in currencies during the settlement period may seriously erode potential profits or significantly increase any losses

High Yield Fixed Income Securities ndash Investing in high yield bonds which tend to be more volatile than investment grade fixed income securities is speculative These bonds are affected by interest rate changes and the creditworthiness of the issuers and investing in high yield bonds poses additional credit risk as well as greater risk of default

Hedge Funds ndash An investment in hedge funds is speculative and involves a high degree of risk and is suitable only for ldquoQualified Purchasersrdquo as defined by the US Investment Company Act of 1940 and ldquoAccredited Investorsrdquo as defined in Regulation D of the 1933 Securities Act No assurance can be given that a hedge fundrsquos investment objective will be achieved or that investors will receive a return of all or part of their investment

Commodities ndash The risk of loss in trading commodities can be substantial The price of commodities (eg raw industrial materials such as gold copper and aluminium) may be subject to substantial fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies Additionally valuations of commodities may be susceptible to such adverse global economic political or regulatory developments Prospective investors must independently assess the appropriateness of an investment in commodities in light of their own financial condition and objectives Not all affiliates or subsidiaries of Deutsche Bank Group offer commodities or commodities-related products and services

Investment in private equity funds is speculative and involves significant risks including illiquidity heightened potential for loss and lack of transparency The environment for private equity investments is increasingly volatile and competitive and an investor should only invest in the fund if the investor can withstand a total loss In light of the fact that there are restrictions on withdrawals transfers and redemptions and the funds are not registered under the securities laws of any jurisdictions an investment in the funds will be illiquid Investors should be prepared to bear the financial risks of their investments for an indefinite period of time

Investment in real estate may be or become nonperforming after acquisition for a wide variety of reasons Nonperforming real estate investment may require substantial workout negotiations andor restructuring

Environmental liabilities may pose a risk such that the owner or operator of real estate may become liable for the costs of removal or remediation of certain hazardous substances released on about under or in its property Additionally to the extent real estate investments are made in foreign countries such countries may prove to be politically or economically unstable Finally exposure to fluctuations in currency exchange rates may affect the value of a real estate investment

Structured solutions are not suitable for all investors due to potential illiquidity optionality time to redemption and the payoff profile of the strategy We or our affiliates or persons associated with us or such affiliates may maintain a long or short position in securities referred to herein or in related futures or options purchase or sell make a market in or engage in any other transaction involving such securities and earn brokerage or other compensation Calculations of returns on the instruments may be linked to a referenced index or interest rate In such cases the investments may not be suitable for persons unfamiliar with such index or interest rates or unwilling or unable to bear the risks associated with the transaction Products denominated in a currency other than the investorrsquos home currency will be subject to changes in exchange rates which may have an adverse effect on the value price or income return of the products These products may not be readily realizable investments and are not traded on any regulated market

Global Chief Investment OfficerChristian Nolting1

Global Chief Investment Officer (CIO)

Regional Chief Investment OfficerLarry V Adam4

CIO Americas

Tuan Huynh6

CIO Asia

Steacutephane Junod9

CIO EMEA

Johannes Muumlller1

CIO Germany

Strategy GroupLarry V Adam4

Global Chief Strategist

Dr Helmut Kaiser1

Chief Strategist Germany

Geacuterard Piasko8

CIO Switzerland Chief Strategist EMEA

International locations1 Deutsche Bank AG

Mainzer Landstrasse 11-17 60329 Frankfurt am Main Germany

2 Deutsche Bank AG London 105108 Old Broad St (Pinners Hall) EC2N 1EN London UK

3 Deutsche Bank Trust Company 345 Park Avenue 10154-0004 New York NY United States

4 Deutsche Bank Securities 1 South Street 21202-3298 Baltimore MD United States

5 Deutsche Bank Trust Company National Association 5022 Gate Parkway Suite 400 Jacksonville United States

6 Deutsche Bank AG Singapore One Raffles Quay South Tower 048583 Singapore Singapore

7 Deutsche Bank AG Hong Kong 1 Austin Road West Hong Kong Hong Kong

8 Deutsche Bank (Switzerland) Ltd Hardstrasse 201 8005 Zurich Switzerland

9 Deutsche Bank (Switzerland) Ltd Place des Bergues 3 1211 Geneva 1 Switzerland

Contact us on WMCIO-Officedbcom

Chief Investment OfficeMarkus Muumlller1

Global Head CIO Office

Sebastian Janker1

Head CIO Office Germany

Juumlrg Schmid8

Head CIO Office EMEA

Jeff Ng6

Head CIO Office Asia

Graham Richardson2

Financial Writer CIO Office

Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA

Contacts CIO Wealth Management

CIO Insights Contacts36


LETTER TO INVESTORS

Rhetoric into Reality

As is widely known the Chinese name their years after animals In their calendar we will soon pass from the year of the monkey to the year of the rooster In the Gregorian calendar we are perhaps one year ahead 2016 was indeed characterized by a lot of crowing but 2017 will be the year when noise needs to be translated into action Governments and individuals now have to deliver on the promises that they have made In other words this will be the year when they have to turn rhetoric into reality

We are living in a complex world but investors should not assume that events are so unpredictable as to be impossible to prepare for I think that it is possible to identify what this yearrsquos key economic and political dynamics are likely to be We summarize them in our 10 themes for 2017 discussed on the following pages

I would start with a simple observation that the theater lights will now be on different global policy actors Since the start of the global financial crisis nearly 10 years ago central banks have been playing the starring roles Unhappy electorates are now demanding that elected politicians take center-stage ndash and deliver meaningful change To do this individual governments may be tempted into radical and sometimes uncoordinated solutions that may be imperfectly explained or understood Translating verbal promises into coherent legislation will be a challenge Even if all turns out for the best and I am optimistic here investors will have to operate in a world characterized by policy divergence at multiple levels ndash fiscal monetary trade and other dimensions (Theme No 1)

Investors may also have to get used to a world characterized not only by divergence but also by a continued threat of disruption This may be particularly the case regarding trade policy (Theme No 2) Whether or not much of the current talk ever translates into actual policy action the threat alone is likely to be enough to affect the behavior of governments corporations and individuals Remember however trade restrictions are not a new phenomenon we are not currently living in a perfectly free-trading world

Clear-headed analysis will be needed for other perceived policy challenges in 2017 Even though for example there is currently a lot of talk about inflation and rising interest rates (Theme No 3) just how far are both likely to rise The answer is probably not very far at least in 2017 ndash although both will be major discussion points during the year And despite the endless talk about ldquothe great rotationrdquo out of bonds into equities are we right to be universally negative about the former asset class As discussed in Theme No 4 the answer is probably not












Contents


16 MACROECONOMICS


19 MULTI ASSET


25ALTERNATIVES


26 DATA TABLES


5 TEN THEMES

10 Themes for 2017

21 EQUITIES

Limited headroom

27 DATA TABLES


29 GLOSSARY

31 DISCLAIMER

33 CONTACTS




7-


THEMES FOR 2017


NextGen tech

Pop-upprotectionism






All eyes onearnings


1 6

2

3 8

4 9

5 10











2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD



1








00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA













Contents


16 MACROECONOMICS


19 MULTI ASSET


25ALTERNATIVES


26 DATA TABLES


5 TEN THEMES

10 Themes for 2017

21 EQUITIES

Limited headroom

27 DATA TABLES


29 GLOSSARY

31 DISCLAIMER

33 CONTACTS




7-


THEMES FOR 2017


NextGen tech

Pop-upprotectionism






All eyes onearnings


1 6

2

3 8

4 9

5 10











2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD



1








00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA




Contents


16 MACROECONOMICS


19 MULTI ASSET


25ALTERNATIVES


26 DATA TABLES


5 TEN THEMES

10 Themes for 2017

21 EQUITIES

Limited headroom

27 DATA TABLES


29 GLOSSARY

31 DISCLAIMER

33 CONTACTS




7-


THEMES FOR 2017


NextGen tech

Pop-upprotectionism






All eyes onearnings


1 6

2

3 8

4 9

5 10











2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD



1








00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA



7-


THEMES FOR 2017


NextGen tech

Pop-upprotectionism






All eyes onearnings


1 6

2

3 8

4 9

5 10











2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD



1








00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA











2015

2004 $030

$042

trillions USD

$054

$066

$078

$086

$094

$138

$145

$180

$210

$240

$250

trillions USD



1








00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA









00 10 20 30 40

0 400 800 1200 1600

2016

2015

2014

2013

2012

2011

2010






2









Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA










Nov 00

-10

00

10

20

30

40

50






3



97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA




97

0

100

200

300

400

500

600

700

99 01 03 05 07 09 11 13 15



bps







4







07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA








07

8X

10X

12X

14X

16X

18X

20X

08 09 10 11 12 13 14 15 16





5




1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





1400 1450 1500 1600 1700 1800175016501550 19001850 2000 20501950


Telegraph

Light Bulb

First 3D Chip


YouTube

Cell Phones

FacebookGoogle

Hybrid Cars

DVDsWWW

Windows

Apple Macintosh

MS-DOS


Car








NextGen tech

6






2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA







2000 2004 2008 2012

21

23

25

31

29

27

33

35

mn barrelsday

2016








7-





Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA






Eco

nom

ic

Gro

wth

Inte

rest

Rat

e S

pre

ad v

s

Trea

sury

Exp

ecte

d

Ben

chm

ark

Rat

e

Qu

antita

tive

Eas

ing

Val

uat

ion

s

Exp

ecte

d

Inflow

Outflow

s

US Dollar

British Pound

Euro

Japanese Yen

Chinese Yuan

Brazilian Real

Mexican Peso

Australian Dollar






8


Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA



Biggest threat


0 10 20 30 40 50 60 70 80


Global Risks

Elections in Europe



Brexit

Global cyberwar









9













Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA








Average


0 10 20 30 40 50 60








10




MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





MACROECONOMICS















Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA









Mexico

China

India

Philippines

South Korea

Brazil

Thailand

Indonesia

Malaysia

South Africa

Turkey

Russia

0 100

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA

















MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA






MULTI ASSET





Equity


Emerging Markets 80

Fixed Income

Credit 175

Sovereigns 175

Emerging Markets 75

Cash 05

Commodity 30

Alternatives 100


Cash

Fixed Income

Commodity

Alternatives1

Fixed Income

Credit



Equity



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA



10031650

55

60

65

70

75

80

85

90

95

10

12

14

16

18

20

22

24

101716 103116 111416 112816























10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA













10 11 12 13 14 15 16 17 18

Average 15 years



MSCI Japan Index


Stoxx 600 Index

DAX

SampP 500 Index





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





















FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





FIXED INCOME AND FX





900bp

800

700

600

500

400

300

200

100

0112014 112016

bp260

240

220

200

180

160

140

120

100

80112014 112016


US high yield1

Euro high yield2





















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA


















ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA








ALTERNATIVES





Assetmanager

Insurancecompany


Publicpension fund

39

61

25

47

30

52

16

27




DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





DB WM 2016 Forecast

DB WM 2017 Forecast

GDP growth ()

US 18 22

Eurozone 16 13

UK 20 11

Japan 05 07

China 65 63


US 16 19

Eurozone 02 16

UK 07 25

Japan ndash02 02

China 20 15


US ndash27 ndash29

Eurozone 29 27

UK ndash55 ndash45

Japan 28 25

China 25 25


US ndash32 ndash35


UK ndash35 ndash40















FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA













FX End-Dec 2017F








US SampP 500 2350

Germany DAX 11800





UK FTSE 100 7000





Gold Gold spot 1200

Oil WTI spot 58




US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA






US








Europe







375bp




Asia Pacific




Global





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA





































Glossary





















Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA























Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA




Disclaimer











































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA






































Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA


























Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA


















Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA




Risk warnings














CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA






CIO Americas

Tuan Huynh6

CIO Asia


CIO EMEA

Johannes Muumlller1

CIO Germany



Dr Helmut Kaiser1


Geacuterard Piasko8















Sebastian Janker1


Juumlrg Schmid8


Jeff Ng6


Graham Richardson2


Khoi Dang5

CIO Office Americas

Enrico Boumlrger9

CIO Office EMEA



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