1. FOREX.com presents The end of the safe haven? Kathleen Brooks Research Director

2. Contents De-constructing the myth of the safe haven Why did we believe in them, why we won’t in future “Safe havens” for the new paradigm

3. Treasuries Swiss franc Gold Yen

4. What does it mean? Uncorrelated to risk Trustworthy Stable Piece of mind Liquid

5. Safe havens: why do we need them? We like things that go up

6. Making sense of a complex market

7. Key characteristics – Strong domestic finances Politically stable Not controlled by capricious forces History of paying debts

8. Something is wrong here…

10. Gold – Sept- Nov 2008

11. Gold – Jan – June 2010

12. Swiss franc – relic of safe haven era

13. Rot at the heart of the biggest safe haven of them all…

14. Dollar earns safe haven status

15. Politically stable: are you serious?

16. Stable monetary policy?

17. Stable finances? US debt-to-GDP

18. Who destroyed the myth of the safe haven?

19. Central banks – major threat…

20. What made us open our eyes? 1, Financial crisis – we became aware of debt 2, Sluggish recovery – causes central banks to act beyond traditional mandate

21. The new reality in trading 1, central banks and governments are not safe… 2, Be careful who you trust 3, Currency wars a potential for the future 4, public finances – takes years to repair

22. Trading in the new paradigm 1, Accept the volatility of markets 2, Look for other assets without these risks 3, factor in political and CB risk in your trading

23. What safe havens today need to offer  Free from meddling by capricious central banks  No sovereign problems  Strong fundamentals

24. Safe havens of the future - Commodities: Pros – demand expected to remain high Cons – at risk from growth cycles, apart from agriculture …

25. Safe havens of the future - Commodity bloc currencies : AUD, NOK, SEK, CAD, NZD Pros – no financial problems Cons – limited liquidity, still affected by global growth cycle

26. Safe havens of the future - EM government debt Pros – no financial problems Cons – shallow markets, limited liquidity, politically unstable, no proven track record

27. Safe havens of the future -

28. Argument for agri as safe haven Positive: Demand is recession proof Growing global population Highly liquid – often traded … Not controlled by a central bank Negative: Can be volatile due to the weather and growth conditions Sensitive to supply issues (demand fairly solid).

29. Access to agri – FOREX.com Products: TRADE platform -Wheat -Cocoa -Cattle -Hogs -Corn -Oats -Rice -Soybean -Tip – stick to the staples, and meat…

30. Access to agri – FOREX.com Ease of trading with TRADE platform -Spreads are fixed for ALL markets -Comprehensive tools and analysis – Market DNA – revolutionises technical trading -Integrated news and research

31. FOREX.com presents The end of the safe haven? Kathleen Brooks Research Director