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Treasury Daily Market Report - 3 February 2010 Page 1

Headline News

• Tsy Sec Geithner: focus turning to

fiscal health after growth restoration

• U.S. NAR pending home sales index

rose 1.0% to 96.6 in Dec vs 95.6 in

Nov

• U.S. equities extended gains following

fresh earnings batch, yields off

highs

• Eurozone Dec PPI rose 0.1% m/m

(med 0.0), annual rate rose to -2.9%

from -4.4%

• German Dec retail sales rose 0.8% m/

m (median 0.9%), down 0.2% q/q in

Q4

• EUR-CHF boosted by supranational

bid talk around 1.4700, WSJ report on

SNB

Daily Commentary

Treasury Secretary Geithner urged a bipartisan effort to restore faith

in the financial system and said that once growth is restored, focus

can shift to reducing deficits spawned over the past decade. He projects

the deficit will hit an unsustainable 10.6% of GDP this year and

must aim for 3% by 2015. In this regard, job creation will be key,

spurred by private sector employment growth. After the financial system

has recuperated, he recommends "rule changes" to avoid risky

behavior. Geithner requests the government be charged with the

power to break up and unwind failing firms that pose systemic risk.

He also favors a bipartisan commission to help reduce deficits, similar

to that outlined by President Obama.

Asian equities are mostly in the green amid some pick up in risk appetite

as confidence on the recovery improves. Bullish momentum

from Wall Street, where the major indexes posted solid gains for a

second straight session after a poor start to the year, has spilled over.

The MSCI Asia Pacific Index is up 0.5%, and is now up 1.7% for the

past two days. Japan's Topix is up over 0.5% thanks to a rally in commodities,

especially metals and oil. Toyota shares are lower though,

after reporting a 16% drop in January sales. The automaker is still

reeling from the recall. Meanwhile, Chinese shares are sharply

lower, still suffering the ill effects as the government looks to stem

growth. The PBoC told banks to raise interest rates on third mortgages

and demand larger down payments for such loans.

Cable received a mild lift after the U.K. Conservative party said their

objective is to cut the structural deficit by 50%. Cable rallied from

1.5910 and moved back in to 1.5950, where good standing offers

capped further gains. The Conservative parties were widely expected

to win the next election, but recent polls have suggested

that their lead over the current Labour government has narrowed,

which is raising the risk of a hung parliament.

USD-JPY was capped by exporter offers and a pick up in option

related selling amid large outstanding strike congestion between

90.25 and 90.75. USD-JPY's inability to sustain the move higher,

combined with lackluster equity market movement fueled light

profit taking via the crosses. EUR-JPY backed in to 126.20 and

GBP-JPY drifted towards 144.20 after offers from 144.60

weighed.

OPEC oil ministers are unlikely to change output policy at their

March meeting if the oil price remains around its current level of

$75 a barrel, the group's secretary general said yesterday. Oil

prices were trading close to $75 yesterday, near the centre of the

$70-$80 range that many in OPEC, including top exporter Saudi

Arabia, say is acceptable for oil producers, consumers and industry

investors.

The Kuwait Stock Exchange (KSE) index, along with major indicators

and Global General Index ended yesterday's session relatively

unchanged as investors react to the government on planning

to inject $16.60bn to boost the economy. The KSE Price

Index increased by a mere 1.20 points (+0.02 percent) yesterday

and closed at 7,016.10 points.

• SNB won't let CHF appreciate, will

hold back on monetary policy hike

• Australia trade deficit -A$2.3 bln in

Dec, above median vs -A$1.7 bln in

Nov

• NYMEX crude prices above $77 bbl

with stocks and economic recovery

hopes

Schedule of Forthcoming Key Economic Releases and Events

Wednesday, 03 rd February

US – MBA Mortgage Applications

US – Challenger Layoffs

US – ADP Employment Survey

US – ISM-NMI

NZ – HLFS Unemployment Rate

Thursday, 04 th February

US – Initial Claims

US – Factory Orders

US – Monster Employment Index

EU – ECB Rate Announcement

UK – BoE Rate Announcement

JP – Trade Balance

Friday, 05 th February

US – Nonfarm Payrolls

US – Unemployment Rate

CA – Unemployment Rate

UK – PPI

JP – Leading Index

Monday, 08 th February

GER – Retail Sales

CA – Housing Starts

CH – Unemployment Rate

Tuesday, 09 th February

US – Redbook

US – ABC Consumer Comfort Index

UK – Trade Balance

UK – BRC Retail Sales

GER – Trade Balance

This document has been prepared and issued by Ahli United Bank B.S.C. (“AUB”) which is regulated by the Central Bank of Bahrain. All recipients of this document should note that it is being furnished to them solely for information purposes and may not be reproduced

or redistributed to any other person without the permission of AUB. Although information has been obtained from and is based upon sources believed to be reliable, AUB does not warrant its accuracy and it may be incomplete or condensed. All opinions and estimates

constitute AUB’s judgement at the date of publication and are subject to change without notice. AUB does not advise as to the suitability or otherwise of this information and provides the information to recipients exclusively on the basis that they have sufficient

knowledge, experience and/or professional financial, legal, tax and other advice to make an independent assessment thereof.


Treasury Daily Market Report - 3 February 2010 Page 2

Foreign Exchange Snapshot

CCY Today Previous Change % Change 2010 High 2010 Low

USD TW Index 79.05 79.38 -0.33 -0.42% 79.491 76.801

EUR/USD 1.3958 1.3897 0.0061 0.44% 1.4582 1.3854

GBP/USD 1.5993 1.5930 0.0063 0.40% 1.6457 1.5851

USD/JPY 90.48 90.76 -0.2800 -0.31% 93.76 89.15

USD/CHF 1.0567 1.0600 -0.0033 -0.31% 1.0641 1.0133

EUR/GBP 0.8727 0.8724 0.0003 0.03% 0.9028 0.8596

AUD/USD 0.8853 0.8797 0.0056 0.64% 0.9330 0.8780

USD/CAD 1.0581 1.0639 -0.0058 -0.55% 1.0708 1.0226

USD/INR 46.12 46.2625 -0.15 -0.32% 46.63 45.12

USD/IQD 1170.00 1156.05 13.95 1.21% 1170.00 1150.00

USD/SAR 3.7503 3.7501 0.0002 0.00% 3.7653 3.7401

USD/BHD 0.37703 0.37702 0.00001 0.00% 0.3770 0.3770

USD/KWD 0.28760 0.28760 0.00000 0.00% 0.29120 0.28450

USD/QAR 3.6405 3.6400 0.0005 0.01% 3.6418 3.6350

USD/OMR 0.38500 0.38501 -0.00001 0.00% 0.38502 0.38410

USD/EGP 5.4695 5.4730 -0.0035 -0.06% 5.48700 5.42000

Equity Market Snapshot

Index

Last

Close

Prev.

Close

Daily

Chg

% Daily

Chg

2010

% Chg

52 Wk

High

Official Interest Rates

US Discount Rate 0.50% 16-Dec-08 Fed Funds 0.25% 16-Dec-08

ECB Lending Rate 1.75% 07-May-09 ECB Repo 1.00% 07-May-09

BOE Lending Rate 0.50% 05-Mar-09 UK Base Rate 0.50% 05-Mar-09

Bahrain Repo 2.25% 15-Sep-09 Deposit Facility 0.25% 18-Dec-08

Qatar Repo 5.55% 03-Jul-06 Deposit Facility 2.00% 05-May-08

Kuw ait Discount Rate 3.00% 14-May-09 Kuw ait 1M Repo 2.25% 21-Jul-09

Saudi Repo 2.00% 19-Jan-09 Reverse Repo 0.25% 16-Jun-09

Corridor Rate 9.75% 17-Sep-09 Egypt O/N Dep 8.25% 17-Sep-09

FOMC Meetings 2009/10

12-Aug-09 unchanged

23-Sep-09 unchanged

04-Nov-09 unchanged

16-Dec-09 unchanged

27-Jan-10 unchanged

16-Mar-10 ?

28-Apr-10 ?

23-Jun-10 ?

Money Market Rates

ECB Meetings 2009/10

03-Sep-09 unchanged

08-Oct-09 unchanged

05-Nov-09 unchanged

03-Dec-09 unchanged

14-Jan-10 unchanged

04-Feb-10 ?

04-Mar-10 ?

08-Apr-10 ?

Libor Today Previous Change 2010 High 2010 Low

USD 3Mth 0.25031 0.24906 0.00125 0.25438 0.24875

USD 6Mth 0.38375 0.38375 0.00000 0.43438 0.38250

USD 12Mth 0.84250 0.84250 0.00000 0.99375 0.84063

EUR 3Mth 0.66500 0.66500 0.00000 0.70000 0.66500

EUR 6Mth 0.96700 0.96600 0.00100 0.99600 0.96400

EUR 12Mth 1.22800 1.22600 0.00200 1.25100 1.22000

GBP 3Mth 0.61563 0.61563 0.00000 0.61625 0.60938

GBP 6Mth 0.84375 0.84375 0.00000 0.84813 0.84250

GBP 12Mth 1.26250 1.26250 0.00000 1.27000 1.25375

AUB Bhibor 3Mth 1.40000 1.40000 0.00000 1.40000 1.40000

AUB Bhibor 6Mth 1.60000 1.60000 0.00000 1.60000 1.60000

AUB Bhibor 12Mth 2.20000 2.20000 0.00000 2.20000 2.20000

SAR 3Mth 0.77375 0.77375 0.00000 0.77400 0.76875

SAR 6Mth 1.05000 1.05000 0.00000 1.05000 1.05000

SAR 12Mth 1.32125 1.32125 0.00000 1.32263 1.32000

This document has been prepared and issued by Ahli United Bank B.S.C. (“AUB”) which is regulated by the Central Bank of Bahrain. All recipients of this document should note that it is being furnished to them solely for information

purposes and may not be reproduced or redistributed to any other person without the permission of AUB. Although information has been obtained from and is based upon sources believed to be reliable, AUB does not warrant its accuracy

and it may be incomplete or condensed. All opinions and estimates constitute AUB’s judgement at the date of publication and are subject to change without notice. AUB does not advise as to the suitability or otherwise of this information

and provides the information to recipients exclusively on the basis that they have sufficient knowledge, experience and/or professional financial, legal, tax and other advice to make an independent assessment thereof.

52 Wk

Low

Dow Jones 10,297 10,186 111.32 1.09% -1.26% 10,730 6,470

NASDAQ 2,190 2,171 18.86 0.87% -3.49% 2,320 1,266

FTSE 5,283 5,247 35.90 0.68% -2.40% 6,535 3,512

Nikkei 10,391 10,312 78.63 0.76% -1.48% 10,982 10,192

S&P 1,103 1,089 14.13 1.30% -1.06% 1,150 667

Kuw ait SE 7,016 7,015 1.20 0.02% 0.15% 7,084 6,878

Dubai SE 1,648 1625 23.71 1.46% -8.92% 1,877 1,540

Saudi SE 6,256 6,243 13.46 0.22% 2.20% 6,568 4,130

Qatar SE 6,642 6,610 31.71 0.48% -4.56% 12,636 4,230

Bahrain SE 1,484 1,485 -0.78 -0.05% 1.80% 1,489 1,444

Muscat SE 6,483 6,515 -32.00 -0.49% 2.01% 6,631 6,368

Egypt Hermes 631 623 8.57 1.38% 10.11% 630 580

AUB Group Equity

AUB Stock - Bahrain (US$) 0.540 0.550 -0.010 -1.82% 24.14% 0.610 0.348

AUB Stock - Kuw ait (Kw D) 0.162 0.164 -0.002 -1.22% 24.62% 0.176 0.105

AUB Stock - Kuw ait (US$ Eqv) 0.563 0.570 -0.007 -1.22% 24.34% 0.612 0.364

BKME Stock - (Kw D) 0.500 0.500 0.000 0.00% -1.96% 0.570 0.350

ABQ Stock - (QAR) 45.00 45.00 0.000 0.00% -4.26% 55.60 34.50

AUB (Egypt) Stock - (EGP) 37.00 37.00 0.000 0.00% 3.85% 36.50 10.15

AHLI Bank Oman Stock - (OMR) 0.229 0.233 -0.004 -1.72% 5.53% 0.245 0.111

KMEFIC Stock (Kw D) 0.085 0.085 0.000 0.00% -2.30% 0.231 0.087


Treasury Daily Market Report - 3 February 2010 Page 3

Capital & Bond Market Snapshot

Swaps Today Previous Change

Futures Calendar Spreads

2010

High

2010

Low

Benchmark

Govt Yields

USD 2Yr 1.14 1.14 0.00 1.35 1.11 0.87

USD 3Yr 1.76 1.75 0.01 1.98 1.71 1.40

USD 5Yr 2.67 2.69 -0.02 2.91 2.62 2.37

USD 10Yr 3.77 3.78 0.00 3.93 3.71 3.65

USD 30Yr 4.46 4.47 -0.02 4.59 4.39 4.57

EUR 2Yr 1.69 1.68 0.01 1.86 1.64 1.11

EUR 3Yr 2.07 2.08 -0.01 2.31 2.02 1.58

EUR 5Yr 2.61 2.61 0.00 2.81 2.61 2.26

EUR 10Yr 3.42 3.42 -0.01 3.59 3.42 3.19

GBP 2Yr 1.77 1.75 0.02 1.98 1.72 1.21

GBP 3Yr 2.39 2.37 0.02 2.62 2.32 2.12

GBP 5Yr 3.15 3.14 0.02 3.37 3.09 2.97

GBP 10Yr 3.95 3.94 0.02 4.12 3.92 3.91

SAR 2Yr 1.59 1.53 0.06 1.76 1.29 0.95

SAR 3Yr 2.13 2.15 -0.02 2.37 2.09 1.46

SAR 5Yr 3.06 3.06 0.00 3.35 3.00 2.58

SAR 10Yr 4.30 4.30 0.00 4.59 4.25 3.68

Swap

Spreads

Change

2010

High

2010

Low

Govt

Spreads

US 2Yr / 5Yr 1.53 1.55 -0.01 1.63 1.50 1.50

US 2Yr / 10Yr 2.63 2.63 -0.00 2.69 2.55 2.78

US 10yr / 30yr 0.69 0.70 -0.01 0.71 0.60 0.92

US / EUR 10yr 0.36 0.35 0.00 0.41 0.27 0.27

3 M th USD GBP EUR

Mar-10 Jun-10 0.12% 0.15% 0.27%

Jun-10 Sep-10 0.26% 0.29% 0.27%

Sep-10 Dec-10 0.34% 0.40% 0.26%

Dec-10 Mar-11 0.38% 0.42% 0.23%

Mar-11 Jun-11 0.37% 0.41% 0.23%

Jun-11 Sep-11 0.35% 0.37% 0.20%

Commodities

Commodity Today Previous Change % Change 2010 High 2010 Low

RJ CRB Index 273.19 267.98 5.2100 1.94% 293.75 200.16

WTC 77.20 74.40 2.8000 3.76% 83.09 72.84

Gold ($) 1112.62 1100.60 12.0200 1.09% 1154.75 1078.80

Silver ($) 16.73 16.6 0.1300 0.78% 18.83 16.17

Platinum ($) 1579 1546 32.5000 2.10% 1657 1463

Interest Rate Futures

6 M th USD GBP EUR

Mar-10 Sep-10 0.38% 0.44% 0.54%

Jun-10 Dec-10 0.60% 0.69% 0.53%

Sep-10 Mar-11 0.72% 0.82% 0.50%

Dec-10 Jun-11 0.75% 0.83% 0.47%

Mar-11 Sep-11 0.72% 0.78% 0.43%

12 M th USD GBP EUR

Mar-10 Mar-11 1.10% 1.26% 1.04%

Jun-10 Jun-11 1.35% 1.52% 1.00%

Sep-10 Sep-11 1.44% 1.60% 0.93%

USD Implied GBP Implied EUR Implied

3m Libor 0.25% 0.62% 0.67%

Mar-10 99.710 0.29% 99.360 0.64% 99.305 0.70%

Jun-10 99.590 0.41% 99.210 0.79% 99.035 0.97%

Sep-10 99.330 0.67% 98.920 1.08% 98.760 1.24%

Dec-10 98.990 1.01% 98.520 1.48% 98.500 1.50%

Mar-11 98.615 1.39% 98.100 1.90% 98.265 1.74%

Jun-11 98.245 1.76% 97.690 2.31% 98.035 1.97%

Sep-11 97.895 2.11% 97.320 2.68% 97.835 2.17%

Dec-11 97.560 2.44% 96.980 3.02% 97.640 2.36%

Mar-12 97.270 2.73% 96.700 3.30% 97.495 2.51%

Jun-12 96.980 3.02% 96.460 3.54% 97.355 2.65%

Sep-12 96.715 3.29% 96.260 3.74% 97.225 2.78%

Dec-12 96.455 3.55% 96.070 3.93% 97.080 2.92%

Futures Currency Spreads

Implied 6m Libor (from Futures)

USD GBP EUR

6m Libor 0.38% 0.84% 0.97%

Mar-10 0.35% 0.72% 0.83%

Jun-10 0.54% 0.94% 1.10%

Sep-10 0.84% 1.28% 1.37%

Dec-10 1.20% 1.69% 1.62%

Mar-11 1.57% 2.11% 1.85%

Jun-11 1.93% 2.50% 2.07%

Sep-11 2.27% 2.85% 2.26%

Dec-11 2.59% 3.16% 2.43%

Mar-12 2.88% 3.42% 2.58%

Jun-12 3.15% 3.64% 2.71%

Sep-12 3.42% 3.84% 2.85%

GBP/USD EUR/USD GBP/EUR

3m Libor 0.37% 0.41% -0.05%

Mar-10 0.35% 0.41% -0.06%

Jun-10 0.38% 0.56% -0.18%

Sep-10 0.41% 0.57% -0.16%

Dec-10 0.47% 0.49% -0.02%

Mar-11 0.52% 0.35% 0.17%

Jun-11 0.56% 0.21% 0.34%

Sep-11 0.58% 0.06% 0.52%

This document has been prepared and issued by Ahli United Bank B.S.C. (“AUB”) which is regulated by the Central Bank of Bahrain. All recipients of this document should note that it is being furnished to them solely for information

purposes and may not be reproduced or redistributed to any other person without the permission of AUB. Although information has been obtained from and is based upon sources believed to be reliable, AUB does not warrant its accuracy

and it may be incomplete or condensed. All opinions and estimates constitute AUB’s judgement at the date of publication and are subject to change without notice. AUB does not advise as to the suitability or otherwise of this information

and provides the information to recipients exclusively on the basis that they have sufficient knowledge, experience and/or professional financial, legal, tax and other advice to make an independent assessment thereof.


Treasury Daily Market Report - 3 February 2010 Page 4

Group Treasury Sales Team & Product Coverage

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This document has been prepared and issued by Ahli United Bank B.S.C. (“AUB”) which is regulated by the Central Bank of Bahrain. All recipients of this document should note that it is being furnished to them solely for information

purposes and may not be reproduced or redistributed to any other person without the permission of AUB. Although information has been obtained from and is based upon sources believed to be reliable, AUB does not warrant its accuracy

and it may be incomplete or condensed. All opinions and estimates constitute AUB’s judgement at the date of publication and are subject to change without notice. AUB does not advise as to the suitability or otherwise of this information

and provides the information to recipients exclusively on the basis that they have sufficient knowledge, experience and/or professional financial, legal, tax and other advice to make an independent assessment thereof.

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