From: Richard Kahn Sent: Wednesday, September 21, 2016 12:32 PM To: Jeffrey Epstein Subject: Fwd: MEGA AM: JGBs no longer a capital appreciation asset if l0y pegged near 0% Richard Kahn HBRK Associa=es Inc. 575 Lexington Avenue, 4th Fl=or New York, NY 10022 Phone Fa> Cell Begin forwarded message: From: "Ens, Amanda" Date: September 21, 201= at 8:27:42 AM EDT To: "Rich Kahn Subject: MEGA A=: JGBs no longer a capital appreciation asset if 10y pegged near 0% =b>Reply-To: "Ens, Amanda" =blockquote type="cite"> * &n=sp; The critical change is t=e Bal has told us JGBs bonds are no longer a capital appreciation asset (as=they have been for 10 years) so now the question is how much income do you n=ed to justify owning them — methinks more than zero!! • =They have also t=ken a very strong forward guidance stance by introducing an: "inflation-ove=shooting commitment". The BoJ commits itself to "expanding the mone=ary base until the year-on-year rate of increase in the observed consumer p=ice index (CPI) exceeds the price stability target of 2 percent and stays a=ove the target in a stable manner". • <=span>Previously, the standard $700m Bal ETF buy-basket would be split=53% for N225, 42% for Topix and 5% for JPX400. Now will veer more towards 69% Topix, 28% Nikkei and 2.3% of total purchas=s. =span style="font-family:Symbol;mso-fareast-font-family:Symbol;mso-bidi-fo=t-family:Symbol">. = With TOPIX now 69% of ETF purchases and Topix / 3=y JGB yield correlation positive, for Topix to rally it means JGBs have to s=ll off. • &=bsp; ** =WTI: API shows U.S. crude in=entories down 7.5 mbbl last week; consensus f=recast for EIA today is build of 3.25 mbbl * <=span>China: The BofAML Chi=a Activity Coincident Tracker (China-ACT) rose to 7.5% yoy in August from a=revised reading of 6.6% in July. There was a broad-based improvement=/a> EFTA_R1_00153961 EFTA01806410