From: Ens, Amanda Sent: 4/7/2017 12:24:59 PM To: jeffrey E. [[email protected]]; Richard Kahn [nnn Subject: EU BANKS: BIG EQUITY OUTFLOWS BUT REMAIN UPBEAT ON REFLATION TRADE: SALES TOP PICKS = SOC GEN, INTESA, NORDEA Attachments: image001.gif; image001jpg01D2AF7627BB3E30.jpg; image012png01D2AF7627BB3E30.png; image014jpg01D2AF762A2ADEA0. jpg; imageO015jpg01D2AF762A2ADEAQ.jpg; image016jpg01D2AF762A2ADEA0.jpg; image017jpg01D2AF762A2ADEA0. jpg; image018jpg01D2AF762A2ADEA0. jpg Importance: — High We remain positive on banks that can make acceptable returns in the current environment and are geared into the upside when rates begin to recover... ING, KBC, Intesa, Unicredit, SocGen, Erste, BKIR are all Buy rated. Global Equities Bank of America Specialist Sales — European Financials Merrill Lynch MAR disclosure EU BANKS: BIG EQUITY OUTFLOWS BUT REMAIN UPBEAT ON REFLATION TRADE Spec Sales Comment: BofAML latest flow show data this morning shows the largest equity outflows in 40 weeks and first outflows YTD (click here). Our BofAML Bull & Bear Indicator is now at 7.1, the highest level since Jul'14 and not far from "sell" signal. So is this just a pause for breath in the reflation trade? BofAML strategists think so. In our updated thoughts this morning we think reflation is real so stay long equities, short rates, selectively long USD (click here). Chart 12: BofAML B&B Indicator (scale from 0 to 10) Today Brexit © 4 6 ( ‘iu. Feb'16 lows ® 0 10 Extreme Extreme Bearish Bullish Source: BofA Merill Lynch Global Investment Strategy Why do we remain bullish the reflation trade? The main reasons for equity investor concern in recent weeks = the gap between hard and soft data, plus the delay in the Trump fiscal package HOUSE_OVERSIGHT_014860