8 December 2016 World Outlook 2016: Managing with less liquidity Table of Contents Global Overview Managing with less liquidity US Dollar drag Europe Note global engine Japan Return to steady recovery trend China Rising challenges to trigger further policy easing Asia (ex Japan) Triple troubles Latin America Still adjusting to low commodity prices Bond Market Strategy Peak policy divergence US Credit US credit feels the pressure of high commodity exposure European Credit Strategy To follow the US or march to its own beat? 3 s 23 32 34 37 40 42 49 51 US Equity Strategy Still low Treasury yields despite Fed hikes to boost S&P PE - Heavy tilts to Health Care & Tech 53 European Equity Strategy 7% upside in 2016 but beware of the risk of a near-term correction 57 FX Strategy Plenty of run left in the USD upswing Commodities Supply adjustment is well underway for oil, not so for the metals Global Asset Allocation The case for normalization Geopolitics The EU's geopolitical crisis eclipses its economic crisis 59 61 67 71 Forecast table Key Economic Forecasts 74 Key Financial Forecasts 76 Long-term Forecasts 77 Contacts 78 Page Deutsche Bank AG/London CONFIDENTIAL — PURSUANT TO FED. R CRIM. P. 6(e) DB-SDNY-0119109 CONFIDENTIAL SDNY_GM_00265293 EFTA01458949