1. 2013
Weekly Markets
21th,
n Perspectives
January
For important disclosures, refer to the Disclosure Section, located at the end of this report.

2. Weekly Summary
Equity markets rose last week. In the US, the Dow third week in a row, supported by news that
Jones Industrial Average reached on Friday a five- Portugal could soon return to the market. The
year high, after House Republicans announced that Portuguese PM expects the country to start issuing
they intend to pass a three-month increase (until April debt gradually in 2013. However, there are still
15th) in the debt ceiling this week. Japanese indices downside risks as the Portuguese Central Bank
were again the highlight, on headlines that the Bank downgrade of its GDP forecast for 2013 seems to
of Japan is preparing to announce additional remind.
measures at its meeting this week (on Tuesday).
China Q4 2012 GDP growth came in slightly above
The US earnings season has so far been decent, consensus. On a full year basis, the economy rose
which also helped risk sentiment. Nonetheless, only by 7.8%.
67 S&P 500 companies have so far reported results.
Apple shares traded below the $500 mark over the This week, investors will probably remain focused
week (down c. 30% from its peak reached in mid- on the US and European earnings season. In
September 2012), after reports that the company’s Q1 Portugal, Galp (today) and Sonae (Wednesday) will
2013 component orders have been cut due to lower release trading statements.
than expected demand for the iPhone 5.
In the euro area, several surveys will be released
In Europe, Spain (2015, 2018 and 2041 bonds) and this week. On the political front, this week’s main
Portugal (T-bills)’s auctions were successfull. event will probably be today’s eurogroup
Portuguese 10-year government bond yields fell for a meeting.

3. US: Retail sales shrugged off “fiscal cliff” US: Inflation remained muted at the
related concerns at the end of 2012 end of 2012
• December’s retail sales value increased by 0.5% • Inflation remained below the Fed’s 2% target in
m/m, well above the consensus forecast at 0.2%; December. The Fed can continue to focus on
• Excluding gasoline, motor vehicles and building reducing the still high unemployment rate;
materials, core sales rose by a solid 0.6% m/m, • The annual rate of headline CPI inflation fell to
after a 0.5% increase in November; 1.7%, from 1.8%. The rate of core CPI inflation
• Retail sales accelerated at the end of 2012. remained unchanged at 1.9%;
Consumers don´t seemed to be overly concerned • Producer prices fell by 0.2% m/m in December.
with the “fiscal cliff” negotiations. The annual rate of PPI inflation dropped to
1.3%, from 1.5% in November.
US Consumer Prices
6
5
4
3
All items (%, y/y)
2
1 Excluding Energy
and Food (%, y/y)
0
-1
-2
-3
07 08 09 10 11 12 13
Source: US Commerce Department Source: Bureau of Labor Statistics

4. US: Industrial Production rises 0.3% US: The manufacturing sector is still
m/m in December 2012 struggling
• Industrial production gained 0.3% m/m in • The Empire State manufacturing index
December. The monthly variation was held back remained in negative territory in January, after
by a 4.8% m/m drop in utilities output due to falling to -7.8 from -7.3;
unseasonably warm whether; • The US Philly Fed manufacturing index dropped
• Business equipment production increased by to -5.8 in January, from +4.6 in December;
1.3% m/m. Consumer goods production saw a • The new orders index (-4.3 from +4.9), the
0.1% m/m fall in December, while construction employment index (-5.2 from -0.2), and the
supplies rose by 1.0% m/m, suggesting that the shipments index (+0.4 from +14.7) fell over the
housing recovery is probably continuing. month.
US Regional PMIs
50
40
30
20
10
0
-10
-20
-30
-40
-50
2001 2003 2005 2007 2009 2011 2013
Empire State manufacturing US Philly Fed
Source: Federal Reserve Source: Philadelphia Federal Reserve, US Federal Reserve

5. US: Consumer confidence falls to a one- US: Bank loans are still expanding
year low
• The University of Michigan’s measure of • Bank loans registered a solid increase over the
consumer confidence fell to 71.3 in January, from closing weeks of 2012;
72.9 in the previous month; • Most types of loans expanded, including
• The “fiscal cliff” deal approved in early January residential mortgages, consumer credit and
and the following rise in equity prices didn’t business loans;
boost sentiment, probably reflecting the expiry of • The growth rate of US bank loans has slowed
the payroll tax cut; but it remains in positive territory, which
• The survey’s current conditions index (normally contrast to what is seen both in the euro-zone
driven by labor market conditions) fell from 87.0 and in the UK.
to 84.8.
University of Michigan Consumer Confidence
120
110
100
90
80
70
60
50
40
00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Bloomberg Source: Federal Reserve Board of Governors

6. US January Beige Book was released last Brazil: Copom keeps Selic
week unchanged at 7.25%
• The Federal Reserve’s January Beige Book • The central bank Monetary Policy Committee
includes information collected on or before left the policy rate unchanged at 7.25% in an
January 4th, 2013; unanimous decision;
• The Beige Book prepared for the January FOMC • The post-meeting statement signaled again that
meeting pointed to subdued but positive the policy rate is expected to remain unchanged
economic growth across the 12 Federal Reserve for a period of time;
districts; • The Copom considers that “the balance of risks
• Concerns regarding the fiscal policy continued to for inflation” has “deteriorated in the short-
be mentioned in the commentary; term”, and that the recovery of domestic
• Reports on manufacturing were less positive, activity “has been less intense than expected”;
with only half of the districts reporting expansion, • Market attention will likely shift to the minutes
and three reporting contraction; (to be released January 24th).
8
Brazil Consumer Price Index (%, y/y)
• Both residential real estate activity and selling 7
prices improved in all twelve districts;
6
• Consumer spending was reported as higher in all
twelve districts, and benefitted from holiday sales 5
that were mentioned as being “modestly higher” 4
than in 2011. 3
2
2006 2007 2008 2009 2010 2011 2012 2013
Source: IBGE

7. China: December activity growth Euro-zone: Trade surplus reaches
momentum remained solid record high in November 2012
• Real GDP rose 7.9% y/y in Q4 2012, slightly above • In November 2012, the seasonally-adjusted
consensus (7.8%), supported by a good autumn euro-zone trade surplus widened from €7.4bn
grain harvest and a rebound in property market. to a record high of €11bn;
the 2012 full-year GDP increased 7.8% y/y, • Exports rose 0.8% m/m, the first monthly rise
following 9.3% y/y in 2011; since August 2012, while imports dropped
• Real retail sales increased 13.5% y/y in December, 1.5% m/m;
following 13.6% in November; • These figures suggest that net trade may have
• Industrial Production rose 10.3% y/y in had a decisive contribution to GDP in Q4 2012.
December, slightly above consensus (10.2% y/y),
following 10.1% y/y in the previous month;
• Fixed asset investment increased 19.9% y/y (vs. 15
+20.7% y/y in November). EU Trade Balance (€bn)
China GDP (%, y/y) 10
13
12 5
11
0
10
9 -5
8
-10
7
6 -15
2000 2002 2004 2006 2008 2010 2012 2000 2002 2004 2006 2008 2010 2012
Source: China National Bureau of Statistics Source: Eurostat

8. Euro-zone: Industrial production Moody’s remains cautious on
disappoints in November 2012 Portuguese Banks. NPL ratio at 11.38%
• Industrial Production fell -0.3% m/m, weaker than in Spain
the +0.2% rise expected by the consensus, • The rating agency considers the on-going
following two large monthly falls in both economic recession as the key driver of asset
September (-2.3% m/m) and October (-1.0% quality deterioration. Moody’s sees the loan-
m/m). Germany and France recorded small loss capacity of most of the Portuguese rated
monthly gains; banks as insufficient in an adverse scenario;
• By country, Italian and Spanish production • Spanish banks NPL ratio increased to 11.38% in
registered sharp monthly falls. In the euro-zone November. NPLs rose by €2bn (+1% m/m) to
as a whole, production was down 3.7% on an €192bn. Private deposits fell by -4.5% y/y. Loans
annual basis. to the private resident sector declined by 5.7%.
Euro-zone Industrial Production and EC Industrial
Sentiment
120 12
110 7
2
100
-3
90
-8
80
-13
EC Survey Industrial Sentiment (LHS)
70 -18
Industrial Production (% y/y, RHS)
60 -23
1998 2000 2002 2004 2006 2008 2010 2012
Source: Eurostat, European Commission Source: Spanish Central Bank

9. Germany: Government lower 2013 Banco de Portugal releases December
growth forecast 2012 coincident indicators
• Germany’s economy expanded by 0.9% (working- • In December 2012, both the monthly coincident
day adjusted), 0.7% unadjusted, in indicator for the y/y evolution of economic
2012, according to a first estimate released by the activity and the monthly coincident for the y/y
German Statistical Office; evolution of private consumption increased
• The fiscal balance of the general government relatively to the previous month;
(+0.1% of GDP) went into positive territory for • in the Q4 2012, sales of light commercial vehicles
the first time since 2007; fell 52.5% y/y (-55.5% in Q3). Sales of heavy
• The government lowered its 2013 growth forecast commercial vehicles increased 14.2% (-10.0% in
to 0.4% (0.5% working-day adjusted), which now Q3). Cement sales of national firms to the
matches the current Bundesbank outlook. domestic market declined -29.1% y/y (-31.5% in
Q3). Portuguese Central Bank's Coincident
8 Indicators
6
4
2
0
-2
-4
Activity Coincident Indicator - Monthly
-6
Private Consumption Coincident Indicator - Monthly
-8
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Source: Destatis Source: Banco de Portugal

10. Banco de Portugal sees lower growth in Portugal: IMF completes the sixth
2013 review
• The Portuguese Central Bank has lowered its • The IMF completed the sixth review of the
GDP forecast for 2013 from -1.6% to -1.9%, Extended Fund Facility arrangement with
reflecting a less favorable international Portugal;
economic environment; • The report considers that “the policy and
• The economy is expected to fall almost 2% in reform effort has been impressive”;
2013, after receding by 3% in 2012, on the back • Given a already high tax burden, the IMF
of the fiscal consolidation adopted with the 2013 supports the government’s expenditure review;
budget which are expected to lead to a significant • The report highlights the need to broaden the
drop in domestic demand. tax base and to progress on structural reforms,
Banco de Portugal Projections: 2012-2014 including labor and product market reforms;
Annual rate of change, %
Winter 2012 Autumn 2012 • Finally, the IMF mentions the importance of
2012 2013 2014 2012 2013
“continued external support and successful
Gross Domestic Product -3.0 -1.9 1.3 -3.0 -1.6 crisis policies at the euro area level”;
Private Consumption -5.5 -3.6 0.1 -5.8 -3.6 • The IMF has already disbursed €22.2bn of the
Public Consumption -4.5 -2.4 1.5 -3.9 -2.4
Gross Fixed Capital Formation -14.4 -8.5 2.8 -14.9 -10.0 total €27.5bn package approved on May 2011.
Domestic Demand -6.9 -4.0 0.8 -6.8 -4.5
Exports 4.1 2.0 4.8 6.3 5.0
Imports -6.9 -3.4 3.5 -4.7 -2.3
Current plus Capital Account (% of GDP) -0.1 3.1 4.4 -0.2 4.0
Trade Balance (% of GDP) 0.3 3.1 4.1 0.8 4.5
Harmonized Index of Consumer Prices 2.8 0.9 1.0 2.8 0.9
Source: Banco de Portugal; INE

11. Greece: IMF completes program review The World Bank releases new
economic forecasts
• The IMF has completed the first and second • Last week, the World Bank released its Global
reviews of the Extended Fund Facility Economic Prospects (Assuring growth over the
arrangement with Greece; medium term, January 2013);
• The country remains focused on restoring • The report considers that the global economy
growth, competitiveness and debt sustainability. remains fragile, as high income countries
However, the IMF considers that more should be continue to suffer from slow growth;
done; • Prospects for the developing world remains
• Large fiscal efforts have already been taken by the solid, albeit below the pre-crisis trend growth;
government. Nevertheless, the report considers • The World Bank estimates global GDP increased
that Greece still needs to increase tax collections, 2.3% in 2012. Growth is forecast to remain
fight tax evasions, and shrink the public sector; broadly unchanged at 2.4% in 2013, before
• The IMF highlight the importance of further help gradually strengthening to 3.1% in 2014 and
by the European partners to reduce debt below 3.3% in 2015.
110% of GDP; Real GDP Growth (%)
• Finally, the report reaffirms the IMF’s preferred 2011 2012e 2013f 2014f 2015f
World 2.7% 2.3% 2.4% 3.1% 3.3%
creditor status. Euro-Zone 1.5% -0.4% -0.1% 0.9% 1.4%
US 1.8% 2.2% 1.9% 2.8% 3.0%
Japan -0.7% 1.9% 0.8% 1.2% 1.5%
China 9.3% 7.9% 8.4% 8.0% 7.9%
India 6.9% 5.1% 6.1% 6.8% 7.0%
Brazil 2.7% 0.9% 3.4% 4.1% 4.0%
Source: The World Bank, Global Economic Prospects, January 2013

12. PSI20 Weekly Review
• Banif (BANIF PL) rose 5.8% over the week. The bank’s GSM
approved the recapitalization plan, which includes €1.1bn of
State capital (€700mn through special special shares and €400
through CoCos). Moreover, the bank’s current shareholders
seem to have already pledged €100mn of the €450mn capital
increase that Banif will execute, while BES (BES PL) has
underwritten €50mn;
• BCP (BCP PL) gained 7.8%. The Bank has denied reports that it is
looking to sell its Polish unit Bank Millennium, where BCP has a
65% holding;
• Portugal Telecom (PTC PL) added 5.1%. The company announced
a definitive agreement for the sale of its minority equity stake
(28%) held in CTM (in Macau) for $411.6mn (subject to certain
adjustments). Moreover, Portugal Telecom launched its
quadruple play offer, including TV, Internet, fixed telephone, and
mobile telephone. The new service is available through FTTH.
This offer could have an important uptake to the company, given
that ZON (ZON PL) and Sonaecom (SNC) are still in the middle of
a merger process;
• Galp (GALP PL) fell -2.4%. After suffering successive delays, the
hydrocraking complex installed at the Sines refinery began the
commercial production stage. Source: Bloomberg

13. Portuguese Sovereign and Corporate Debt Weekly Review
• Portugal has successfully raised €2.5bn through a T-bill 25
Portuguese Government Bond Yields (%)
action, last week; 20
• The Portuguese PM expects the country to start issuing 15
debt gradually in 2013. According to the local press,
10
Portugal wants to return to the capital market by the end of
5
February, in order to take advantage of improving market 2-year 5-year 10-year
0
sentiment, before the next programme review is due. 2011 2012 2013
1,800
Portugal will probably focus on a five-year syndicated bond; 1,600
BCP and BES CDS EUR SR 5Y (bps)
• The IMF’s chief acknoweledged that Portugal has made 1,400
1,200
progress in reducing its deficit. However, she considered 1,000
that more fiscal consolidation is needed; 800
• Portuguese 10-year government bond yield fell for a third 600
400 BES BCP
week in a row, supported by news that Portugal could soon 200
Jan-12 Abr-12 Jul-12 Out-12 Jan-13
return to the market and speculation of potential ECB’s
Portugal Telecom and EDP Selected
OMT buying of Portuguese bonds. Although recognizing 6.5 Corporate Bond Yields (%)
the current positive market sentiment, the economic 6.0 Portugal Telecom 5 7/8
adjustment process is still a long one. The 2013 budget 5.5
04/17/18
EDP 5 3/4 09/21/17
should keep the economy in recession. The high level of 5.0
4.5
corporate debt as a percentage of GDP remains an 4.0
important concern; 3.5
• Portuguese Banks 5Y SR CDS rose over last week, but are 3.0
Out-12 Nov-12 Dez-12 Jan-13 Fev-13
still well below the 2012 year-end levels. Source: Bloomberg

14. Last week’s European and US equity market highlights
• SAP (SAP GY) preannounced Q4 2012 results on January 15th SAP Stock Price Daily Changes (%)
0.5
with licenses of €1.94bn (8% y/y excl. FX), below consensus
estimates of €1.97bn. SSRS revenues of €4.27bn (+10% y/y -0.4
-0.1
excl. FX) also came lower that expected (€4.32bn). Operating -1.5
margins of 38.8% are below consensus estimates of 39.4%.
SAP will release its 2013 outlook on January 23th. The shares
-3.9
fell -5.3% over the week;
14-Jan 15-Jan 16-Jan 17-Jan 18-Jan
• Intel (INTC US) reported Q4 2012 revenue of $13.5bn (flat 29 Intel Stock Price ($)
q/q), in line with consensus. EPS of $0.48 was above 27
consensus of $0.45 due to higher margins. The company 25
guided Q1 2013 revenue to a range of $12.2-$13.2bn (down 23
2%-9% q/q and with a $12.7bn mid-point), below consensus 21
19
of $12.9bn;
17
• Bank of America (BAC US) reported Q4 2012 of $0.03, Jan-12
13
Mar- 12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
including several previously announced charges. Net interest 12
Bank of America Share Price ($)
income was better than expected. Basel 3 capital continued to 11
improve. BAC’s Tier 1 common ratio now stands at 9.25%; 10
9
• ASML (ASML NA) rose 5.3% over the week. The company 8
announced that sales, which fell 16% to €4.73bn in 2012, will 7
probably be little changed in 2013, pointing to an expected 6
week H1. Consensus 2013 sales estimates were €5.2bn. 5
Jan-12 Mar-12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
Source: Bloomberg

15. What we are watching this week:
• In the US, Existing Home Sales (Tuesday) and New Event
Machine Tool Orders (y/y), Japan
Date
21-Jan
Hour (GMT) Survey
06:00
Prior
-27.5%
Producer Prices (y/y), Germany 21-Jan 07:00 1.7% 1.4%
Home Sales (Friday) reports are due. In the industrial Trade Balance (Mln Euros), Spain 21-Jan -1492.4M
BOJ Target Rate, Japan 22-Jan 0.1%
sector, January’s preliminary Markit Manufacturing Current Account (euros), Portugal 22-Jan -268.8M
House Price Index (y/y), Spain 22-Jan -9.3%
PMI (Thursday) will be released. This week will ZEW Survey (Current Situation), Germany
ZEW Survey (Econ. Sentiment), Germany
22-Jan
22-Jan
10:00
10:00
6.2
12.0
5.7
6.9
probably further suggest the diverging fortunes in the ZEW Survey (Econ. Sentiment), Euro-Zone
Richmond Fed Manufact. Index, US
22-Jan
22-Jan
10:00
15:00
7.6
5.0
housing and industrial sectors; Existing Home Sales, US
Cabinet Office Monthly Economic Report for January, Japan
22-Jan
23-Jan
15:00 5.10M 5.04M
Bank of Japan Monthly Economic Report for January 23-Jan 05:00
• In the UK, Q4 2012 GDP data is expected to be Production Outlook Indicator, France 23-Jan 07:45 -36.0 -38.0
Business Confidence Indicator, France 23-Jan 07:45 90.0 89.0
announced (Friday). The unwinding of the Olympics Bank of England Minutes
Current Account (mn euro), Italy
23-Jan
23-Jan
09:30
10:00 -245M
effect will probably take its toll on quarterly growth; Euro Area Third Quarter Government Debt
House Price Index MoM, US
23-Jan
23-Jan
10:00
14:00 0.5% 0.5%
• In the euro-zone, the focus for the week will probably Euro-Zone Consumer Confidence
IMF Releases World Economic Outlook Update
23-Jan
23-Jan
15:00
15:00
-26.0 -26.5
be the release of Flash PMIs for the euro area, France Bank of Canada Rate
GDP (YoY), South Korea
23-Jan
23-Jan
15:00
23:00
1.0%
1.9%
1.0%
1.5%
HSBC Flash Manufacturing PMI, China 24-Jan 01:45 51.5
and Germany (Thursday); Unemployment Rate (Survey), Spain 24-Jan 08:00 26.0% 25.0%
PMI Manufacturing, France 24-Jan 08:00 44.9 44.6
• On the euro-zone political front, this week’s main PMI Services, France
PMI Manufacturing, Germany
24-Jan
24-Jan
08:00
08:30
45.5
46.8
45.2
46.0
event will probably be today’s eurogroup meeting. PMI Services, Germany
Euro-Zone Current Account nsa
24-Jan
24-Jan
08:30
09:00
52.0 52.0
7.2B
Recent news suggest that there is the possibility of ECB Euro-Zone Current Account SA
PMI Manufacturing, Euro-Zone
24-Jan
24-Jan
09:00
09:00 46.6
3.9B
46.1
the discussion or even some announcement PMI Services, Euro-Zone
PMI Composite, Euro-Zone
24-Jan
24-Jan
09:00
09:00
48.0
47.5
47.8
47.2
Retail Sales (y/y), Italy 24-Jan 09:00 -3.8%
ragarding Cyprus, Ireland and Portugal. Moreover, the Initial Jobless Claims, US 24-Jan 13:30 360K 335K
Conference Board Revisions of Leading Indicators, US 24-Jan 15:00
euro-zone finance ministers are likely to appoint the Leading Indicators, US
Markit US PMI Preliminary
24-Jan
24-Jan
15:00 0.3%
53.0
-0.2%
Dutch Finance Minister Jeroen Dijsselbloem as the Natl CPI YoY, Japan
Producer Prices (y/y), Spain
24-Jan
25-Jan
23:30
08:00
-0.2% -0.2%
2.8%
new head of the eurogroup, replacing the IFO - Business Climate, Germany
IFO - Current Assessment, Germany
25-Jan
25-Jan
09:00
09:00
103.0
107.3
102.4
107.1
IFO - Expectations, Germany 25-Jan 09:00 98.5 97.9
Luxembourg Prime Minister Jean-Claude Juncker. GDP (y/y), UK 25-Jan 09:30 0.2% 0.0%
New Home Sales, US 25-Jan 15:00 385K 377K
Source: Bloomberg, Fincor

16. Next Week Preview: Economics
US Existing Home Sales and Pending Home Sales
• US Existing Home Sales for December will be released on 7,500
7,000
Existing Home Sales (000s, LHS)
135
125
Tuesday (15:00 GMT). Existing Home Sales broke above the five 6,500
Pending Homes Sales Index (adv. 1 m, RHS)
6,000 115
million mark in the previous month and are expected to rise 5,500
105
further in December. The positive evolution on Pending Homes 5,000
4,500 95
sales also points to a continuing rise in Existing Home Sales; 4,000
85
• Several surveys will be release this week in the euro area. The 3,500
3,000 75
Zew index is expected to be announced on Tuesday. Flash PMIs 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
for the euro-zone, France and Germany are due Thursday. The
German Ifo Business Confidence Survey will be released on
Thursday. Notwithstanding the rise of the euro, a pickup in
business sentiment is expected, reflecting improving market
conditions;
• The Flash Markit US Manufacturing PMI is due Thursday (13:58
GMT). In December, the index rose to a seven-month high of
UK GDP Growth (q/q, %)
54.0. Given the more modest evolution in the ISM survey, the 0.90
January figure will probably show a drop back in the index; 0.60
• The first estimate of the UK Q4 2012 GDP is to be published on 0.40
0.10
Friday. A rebound in construction output is expected to be an
important help to offset (at least partially) the unwinding of the -0.20
-0.30
Olympics efect. -0.40
Q1 2012 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
Source: Bloomberg

17. Next Week Preview: Eurogroup/ ECOFIN Meetings and Government Debt
Issuance Calendar
Eurogroup/ECOFIN meeting Spain to auction T-Bills on January
scheduled for January 21st-22nd 22nd
• Today, EMU finance ministers will discuss the • Quarterly data on government debt for EMU
current economic environment in the euro area, countries will be released on January 21st.
review current assessments by the Troika Next week's Selected Bonds and T-Bills Supply
(including the sixth review of the Portuguese Issue Country Date Amount Hour (GMT)
BTF Apr 2013 France 21-Jan € 4-4.4bn
programme), discuss the roadmap for the BTF Jun 2013 France 21-Jan € 1.2-1.6bn
implemention of bank recapitalization by the ESM BTF 4% 7 Mar 2022
Gilt
Jan 2014 France 21-Jan € 1.2-1.6bn
UK 22-Jan GBP 1.75bn 10:30
and the potential successor of Jean-Claude Letras Apr 2013 Spain 22-Jan
Letras Jul 2013 Spain 22-Jan
Juncker; T-Bills Apr 2013 US 22-Jan USD 32bn
• Tomorrow, the EU27 finance minister will focus T-Bill Jul 2013 US 22-Jan USD 28bn
on (a) the Commission’s annual growth outlook, T-Bills Mar 2013
T-Bills Feb
2013 Japan 23-Jan JPY 2.5tn
US 23-Jan
(b) the economic policy coordination in Europe, JGB 20 Dec 2032 Japan 24-Jan JPY 1.2tn 03:00
TIPS 0.125% 15 Jan 2023 (new) US 24-Jan USD 15bn
(c) the Commission’s action plan on the T-Bills Apr 2013 Japan 24-Jan JPY 5.7tn
prevention of tax evasion, and (d) legislative T-Bills Feb 2013 UK 25-Jan GBP 0.5bn
T-Bills Apr 2013 UK 25-Jan GBP 0.5bn
issues regarding the financial transaction tax; T-Bills Jul 2013 UK 25-Jan GBP 1.5bn
• According to some press, the eurogroup could Next week's Selected Bonds and T-Bills redemptions
Issues Country Date Amount Hour (GMT)
approve changes to the conditions on the EFSF T-Bills Ireland 21-Jan € 0.5bn
Bubills (12m) Germany 23-Jan € 3.0bn
loans to Portugal in line with the changes made BTF France 24-Jan € 6.5bn
to the loans to Greece. Source: Treasuries; Fincor

18. Next Week Preview: US Earnings Season
Company Name
nd
Tuesday, 22 January
Company Ticker Time Event Description
Apple will probably be the
EI du Pont de Nemours & Co DD US 11:00 Q4 2012 Earnings Release
Verizon Communications Inc
Johnson & Johnson
VZ US
JNJ US
12:30
12:45
Q4 2012 Earnings Release
Q4 2012 Earnings Release
highlight of the week
Freeport-McMoRan Copper & Gold Inc FCX US 13:00 Q4 2012 Earnings Release
Texas Instruments Inc TXN US 20:30 Q4 2012 Earnings Release • Of the 67 S&P companies that reported Q4
CSX Corp CSX US 21:01 Q4 2012 Earnings Release
Advanced Micro Devices Inc AMD US 21:15 Q4 2012 Earnings Release
2012 results, about 75% beat on EPS,
Google Inc
International Business Machines Corp
GOOG US
IBM US
After Market
After Market
Q4 2012 Earnings Release
Q4 2012 Earnings Release
according to Bloomberg. About 78% of the
rd
Wednesday, 23 January companies beat on sales, with an average
Abbott Laboratories ABT US Before Market Q4 2012 Earnings Release
Air Products & Chemicals Inc APD US Before Market Q1 2013 Earnings Release surprise of 5%;
Praxair Inc PX US Before Market Q4 2012 Earnings Release
United Technologies Corp UTX US Before Market Q4 2012 Earnings Release • Microsoft (MSFT US) will release earnings on
General Dynamics Corp GD US Before Market Q4 2012 Earnings Release
McDonald's Corp MCD US Before Market Q4 2012 Earnings Release Thursday. Earnings are expected to reflect
WellPoint Inc
Motorola Solutions Inc
WLP US
MSI US
11:00
13:00
Q4 2012 Earnings Release
Q4 2012 Earnings Release
weakness in PC demand. Weak market
Apple Inc
Amgen Inc
AAPL US
AMGN US
21:30
After Market
Q1 2013 Earnings Release
Q4 2012 Earnings Release
sentiment reflects holiday season on Windows
SanDisk Corp SNDK US After Market Q4 2012 Earnings Release 8, Surface RT and PC sales. Focus should be on
Symantec Corp SYMC US After Market Q3 2013 Earnings Release
th
Thursday, 24 January expectations regarding the launch of Office
Union Pacific Corp UNP US Before Market Q4 2012 Earnings Release
Raytheon Co RTN US 12:00 Q4 2012 Earnings Release 2013;
Xerox Corp XRX US 12:15 Q4 2012 Earnings Release
Bristol-Myers Squibb Co BMY US 12:30 Q4 2012 Earnings Release
• McDonalds (MCD US) will release Q4 results
AT&T Inc
Starbucks Corp
T US
SBUX US
After Market
After Market
Q4 2012 Earnings Release
Q1 2013 Earnings Release
on Wednesday. Better US trends are expected
Microsoft Corp
3M Co
MSFT US
MMM US
After Market
Not Avaliable
Q2 2013 Earnings Release
Q4 2012 Earnings Release
to be offset by a weaker performance in Asia;
th
Friday, 25 January • 3M (MMM US) reports earnings on Thursday.
Honeywell International Inc HON US Before Market Q4 2012 Earnings Release
Procter & Gamble Co/The PG US Before Market Q2 2013 Earnings Release Few surprises are expected given that the
Covidien PLC COV US Before Market Q1 2013 Earnings Release
Kimberly-Clark Corp KMB US Before Market Q4 2012 Earnings Release company gave a 2013 guidance call in mid-
Halliburton Co
Source: Bloomberg
HAL US Not Avaliable Q4 2012 Earnings Release
December.

19. Next Week Preview: European Earnings Season
Company Name
st
Monday, 21 January
Company Ticker Time Event Description
Novartis, Unilever and
Cie Financiere Richemont SA
Galp Energia SGPS SA
CFR VX
GALP PL
06:00
Before Market
Q3 2013 Sales and Revenue Release - Trading Statement
Q4 2012 Sales and Revenue Release - Trading Update
Siemens report this week
Pearson PLC PSON LN Q4 2012 Sales and Revenue Release - Trading Update • Repsol (REP SM) will hold its
nd
Tuesday, 22 January
Exploration Day on Friday;
Alstom SA ALO FP 07:00 Q3 2013 Sales and Revenue Release
SABMiller PLC SAB LN Q3 2013 Sales and Revenue Release - Trading Statement • Siemens (SIE GY) will disclose Q1
rd
Wednesday, 23 January results on Wednesday. Order
Novartis AG NOVN VX 06:00 Y 2012 Earnings Release
SAP AG SAP GR 06:00 Y 2012 Earnings Release
momentum, management
Siemens AG SIE GR 06:30 Q1 2013 Earnings Release commentary on business trends
Sage Group PLC/The SGE LN 07:00 Q1 2013 Sales and Revenue Release - Interim Management Statement
Unilever PLC ULVR LN 07:00 Y 2012 Earnings Release
and underlying margins are likely
Land Securities Group PLC LAND LN 08:30 Q3 2013 Sales and Revenue Call - Interim Management Statement to be the investors’ focus;
BHP Billiton PLC BLT LN Q2 2013 Sales and Revenue Release - Production Report • Unilever (UNA NA) will report Q4
th
Thursday, 24 January
Lonza Group AG LONN VX 06:00 Y 2012 Earnings Release and FY2012 results on
Ziggo NV ZIGGO NA 06:30 Y 2012 Earnings Release Wednesday. Consensus compiled
Banco de Sabadell SA SAB SM 07:30 Y 2012 Earnings Release
Svenska Cellulosa AB SCAB SS 11:00 Y 2012 Earnings Release
by the company is looking for Q4
Nokia OYJ NOK1V FH 11:00 Y 2012 Earnings Release organic growth of 6.3% but with a
JCDecaux SA DEC FP 16:40 Q4 2012 Sales and Revenue Release
easyJet PLC EZJ LN Q1 2013 Sales and Revenue Release - Interim Management Statement
large range (5.3% - 7.8%).
th
Friday, 25 January Consensus expectations are for
Wartsila OYJ Abp WRT1V FH 06:30 Y 2012 Earnings Release 40bp of Core EBIT margin
Anglo American PLC AAL LN 07:00 Q4 2012 Sales and Revenue Release - Production Report
Source: Bloomberg
expansion to 13.8% in H2, which
would give +20bp or 13.7% for
FY12.

20. Next Week Preview: Earnings season in Portugal and Idea of the
week
Galp and Sonae to release trading Idea of the week: Rio Tinto (RIO LN)
statements • The company announced last week that it will
• Galp (GALP PL) is expected to disclose Q4 take a total of c. US$14bn of write-downs across
Trading Statement on Monday. The company its aluminium coal assets at its 2012 results.
will update on production volumes, crude Moreover, both the group’s CEO and the CEO of
processed and gas sales volumes. It will also the energy division will leave the company;
report data on benchmark refining margins. • The management changes could lead the
Production should reflect lower output from company to better a capital allocation in the
Lula. Refining volumes is expected to be future. Its volume growth profile and cost
penalized by the delay on the upgrade of the savings potential are still important attractions.
Sines refinery; Rio Tinto Share Price (GBp)
4,500
• Sonae (SON PL) will report preliminary results
on Wednesday. 4,000
3,500
3,000
2,500
2011 2012 2013
Source: Bloomberg

21. Charts we are watching
600
• Realized volatility in equity and fixed income markets is iPath S&P500 VIX Short-term Futures
at very low levels. Short-term implied volatility, which 500
tracks realized volatility, is stuck at low levels. However, it
400
is possible to identify a number of economic (e.g. will all
the efforts made by central bank be fruitless?) or political 300
(e.g. instability in the Middle East; will Spain ask for OMT 200
support?) risks. Nonethless, record lows in volatility
seems to be supported by the current environment of 100
low trading volumes and QE policies by central banks. 0
2010 2011 2012 2013
• Cyprus is a small economy in GDP terms. The country Source: Bloomberg
needs external funding and it has applied for EU/IMF/ECB Republic of Cyprus Government
programme in 2012. However, the Troika and the Cypriot 50 Bond Yields (%)
45
government have reached stalemate, with the latter 40
Republic of Cyprus 3Jun2013
refusing to agree on the conditionality that comes with 35 Republic of Cyprus 3Feb2020
30
the programme. Of the proposed bail-out of around 25
€17bn, c. €10bn will probably go to recapitalize the 20
banking sector. Today’s eurogroup meeting could bring 15
10
some news regarding the assessment of the banking 5
sector in Cyprus. However, with the presidential election 0
2010 2011 2012 2013
in February, getting a deal before then could be difficult. Source: Bloomberg

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