real estate

Three main forces are shaping the business and investment climate:  Surging energy prices, a dramatic backing up of short-term interest rates in Anglo-American countries, and the persistence of supply chain disruptions.  The US and Europe have likely passed peak growth.  Fiscal policy will be less accommodative, and financial conditions have tightened. Japan appears to be getting a handle on Covid and after a slow start.  Its vaccination rate has surpassed the US.  The lifting of the formal state of emergency and a hefty dose of fiscal stimulus is expected to be delivered in the coming months. Many developing economies have already lifted rates, some like Brazil and Russia, aggressively so.  They will likely finish earlier too.      US light sweet crude oil rose nearly 12% last month, even though US inventories rose last month for the first time since April.   The price of WTI rose almost 10% in September.  Statistically, the rise in oil prices is strongly correlated with the increase in inflation expectations.  OPEC+ will boost supplies by another 400k barrels a day at the start of November and is committed to the same monthly increase well into 2022.   At the same time, new Covid infections in several Asia-Pacific countries, including China, Singapore, and Australia, warn of the risk of continued supply-chain disruptions.  In Europe, Germany and the UK recently reported the most cases since the spring. Belgium is tightening curbs.  Bulgaria is seeing a rise in infections, and Romania was at full capacity in its intensive care facilities.  The fact that Latvia lags the EU in vaccination at about 50% leaves it vulnerable.  The US may be lagging behind Europe, and the next four-six weeks will be critical.  Roughly 40% of Americans are not fully vaccinated.   The rise in price pressures and the gradual acknowledgment by many central bankers that inflation may be more persistent have helped spur a significant backing up of short-term rates in the Anglo-American economies. The ultimately deflationary implications of the surge in energy prices through demand destruction and the implications for less monetary and fiscal support still seem under-appreciated. Yet, the market has priced in aggressive tightening of monetary policy over the next 12 months.   The focus of the foreign exchange market seems squarely on monetary policy.  From a high level, the central banks perceived to be ahead in the monetary cycle have seen stronger currencies. The likely laggards, like the Bank of Japan, the Swiss National Bank, and the ECB, have currencies that underperformed.  Norway and New Zealand have already raised rates and are expected to do so again in November.    Of course, as you drill down, discrepancies appear.  In October, the Australian dollar was the top performer among the major currencies with a 4% gain.  It edged out the New Zealand dollar and the Norwegian krone, whose central banks are ahead of the Reserve Bank of Australia.  The RBA has pushed against market speculation that has 90 bp of tightening priced into 12-month swaps.  The Australian dollar outperformed sterling by about 2.5% in October even though the Bank of England has been so hawkish with its comments that the market had little choice but to price in a high probability of a hike as early as the November meeting.  In fact, the market has the UK's base rate above 50 bp by the end of Q1 22.  This is important because in its forward guidance that BOE has identified that as the threshold for it to begin unwinding QE by stopping reinvesting maturing issues.  Interestingly enough, when the BOE meets on March 17 next year, it will have a sizeable GBP28 bln maturity in its portfolio.   In an unusual quirk of the calendar, the Federal Reserve meets before the release of the October jobs report.  All indications point to the start of the tapering process.  It is currently buying $120 bln a month of Treasuries ($80 bln) and Agency Mortgage-Backed Securities.  The pace of the reduction of purchases is a function of the duration, and the Fed has clearly indicated the tapering will be complete around mid-year. That suggests reducing the purchases by about $15 bln a month.  Chair Powell indicated that unlike the Bank of England, the Fed will stop its bond purchases before raising rates. A faster pace of tapering would be a hawkish signal as it would allow for an earlier rate hike.  The gap between when the tapering ends and the first rate hike does not appear predetermined. Powell has talked about the economic prerequisites, which emphasize a full and inclusive labor market in the current context. The Fed funds futures entirely discount a 25 hike in July, with the risk of a move in June.  Comments by several officials hint that the Fed may drop its characterization of inflation as transitory, which would also be understood as a hawkish development.   Partly owing to the extended emergency in Japan, it is marching to the beat of a different drummer than the other high-income countries. Inflation is not a problem.  In September, the headline rate rose to 0.2% year-over-year, the highest since August 2020.  However, this is a function of fresh food and energy prices, without which the consumer inflation stuck below zero (-0.5%).  In December 2019, it stood at 0.9%.  In addition, while fiscal policy will be less accommodative in Europe and the US, a sizeable supplemental budget (~JPY30 trillion) is expected to be unveiled later this year.   After expanding by 1.3% quarter-over-quarter in Q2, the Chinese economy slowed to a crawl of 0.2% in Q3, which was half the pace expected by economists. Some of the decline in economic activity resulted from the virus and natural disasters (floods). Still, some of it stemmed from an effort to cut emissions in steel and other sectors.  The problems in China's property development space, accounting for a large part of its high-yield bond market,  unsettled global markets briefly.  Talk of a Lehman-like event seems a gross exaggeration. Still, given the sector's importance to China's economy (30% broadly measured) and the use of real estate as an investment vehicle, it may precipitate a structural shift in the economy.   The Communist Party and the state are reasserting control over the economy's private sector and the internet and social network.  It has also weighed in on family decisions, like the number of children one has, how long a minor should play video games, the length of men's hair, what kind of attributes entertainers should have, and appropriate songs to be played with karaoke.   It seems to be reminiscent of part of the Cultural Revolution and a broader economic reform agenda like Deng Xiaoping did in the late 1970s and Zhu Rongji in the 1990s.  At the same time, Beijing is wrestling with reducing emissions and soaring energy prices, which also dampen growth. Even though consumer inflation is not a problem in China (0.7% year-over-year in September), Chinese officials still seem reluctant to launch new stimulative fiscal or monetary initiatives. Moreover, new outbreaks of the virus could exacerbate the supply chain disruptions and delays fuel inflation in many countries.  The aggressiveness in which investors are pricing G10 tightening weighed on emerging market currencies in October.  The JP Morgan Emerging Market Currency Index fell by almost 0.8% last month after falling 2.9% in September, the largest decline since March 2020.  The continued politicization of Turkey's monetary policy and the aggressive easing saw the lira tumble nearly 7.5% last month, which brings the year-to-date depreciation to 22.5%.   On the other hand, Brazil's central bank has aggressively hiked rates, and the 150 bp increase in late October brought this year's tightening to 575 bp and lifting the Selic to 7.75%.  Yet, it is still below the inflation rate (10.34% October), and the government has lost the confidence of domestic and international business.  The Brazilian real fell nearly 3.5% last month to bring the year-to-date loss to almost 7.8%.   Our GDP-weighted currency basket, the Bannockburn World Currency Index, snapped a two-month decline and rose by 0.35%.  The rise in the index reflects the outperformance of the currencies against the dollar.  The currencies from the G10 countries, including the dollar, account for about two-thirds of the index, and emerging markets, including China, the other third.  The yen was the weakest of the majors, falling 2.3%.  It has a weighting of 7.5% in the BWCI.   Among the emerging market currencies in our GDP-weighted currency index, the Brazilian real's 3.4% decline was the largest, but its 2.1% weighting minimizes the drag.  It was nearly offset by the Russian rouble's 2.5% advance.  It has a 2.2% weighting in our basket.  The Chinese yuan, which has a 21.8% share, rose by 0.6%.      Dollar:   The market is pricing in very aggressive tightening by the Federal Reserve.  As recently as late September, only half of the Fed officials anticipated a hike in 2022.  The December 2022 Fed funds futures are pricing in a little more than two hikes next year. More than that, the market is discounting the first hike in June next year, implying a transition from completing the bond-buying to raising rates with no time gap.  The disappointing 2% Q3 GDP exaggerated the slowing of the world's largest economy.  We note that the supply-side challenges in vehicle production halved the growth rate.  Growth is likely to re-accelerate in Q4, but we continue to believe that the peak has passed.  While inflation is elevated, the pace of increase slowed in Q3.  Consider that the PCE deflator that the Fed targets rose at an annualized rate of 4.0% in Q3 after a 5.6% pace in Q2.  The core rate slowed to an annualized pace of 3.3% last quarter, half of the speed in the previous three months.  The infrastructure spending plans have been reduced, and some of the proposed tax hikes, including on corporations, appear to be dropped as part of the compromise among the Democratic Party.   Euro:  For most of Q3, the euro has been in a $1.17-$1.19 trading range.  It broke down in late September, and was unable to recapture it in October.  Instead, it recorded a new low for the year near $1.1525.  A convincing break of the $1.1500 area could signal a move toward $1.1300. The single currency drew little support because growth differentials swung in its favor in Q3:  the Eurozone expanded by 2.2% quarter-over-quarter while the US grew 2% at an annualized pace.  The ECB is sticking to its analysis that the rise in inflation is due to transitory factors while recognizing that energy prices may prove more sticky.  That said, news that Gazprom may boost gas sales to Europe after it finishes replenishing Russian inventories after the first week in November, natural gas prices fall at the end of October.  After the Pandemic Emergency Purchase Program ends next March, decisions about the asset purchases next year will be announced at the December ECB meeting along with updated forecasts.   (October indicative closing prices, previous in parentheses)   Spot: $1.1560 ($1.1580) Median Bloomberg One-month Forecast $1.1579 ($1.1660)  One-month forward  $1.1568 ($1.1585)    One-month implied vol  5.1%  (5.1%)         Japanese Yen:  The dollar rose 2.3% against the yen in October to bring the year-to-date gain to nearly 9.5%.  The Bank of Japan will lag behind most high-income countries in the tightening cycle, and the higher US yields are a crucial driver of the greenback's gains against the yen.  Japan's headline inflation and core measure, which only excludes fresh food, may be rising, but they are barely above zero and, in any event, are due to the surge in energy prices. In response to the weakening yen, Japanese investors appear to have boosted their investment in foreign bonds, while foreign investors increased their holdings of Japanese stocks.  The LDP and Komeito maintained a majority in the lower chamber of the Diet. A sizeable stimulus supplemental budget is expected to help strengthen the economic recovery now that the formal emergencies have been lifted.  In Q3, the dollar traded mainly between JPY109 and JPY111.  It traded higher in the second half of September rising to nearly JPY112.00.  The dollar-yen exchange rate often seems to be rangebound, and when it looks like it is trending, it is frequently moving to a new range.  We have suggested the upper end of the new range may initially be the JPY114.50-JPY115.00.  The four-year high set last month was about JPY114.70.  A move above JPY115.60 could target the JPY118.50 area.     Spot: JPY113.95 (JPY111.30)       Median Bloomberg One-month Forecast JPY112.98 (JPY111.00)      One-month forward JPY113.90 (JPY111.25)    One-month implied vol  6.4% (5.6%)   British Pound:  Sterling rallied around 4 1/3 cents from the late September low near $1.34.  The momentum stalled in front of the 200-day moving average (~$1.3850).  After several attempts, the market appeared to give up.  We anticipate a move into the $1.3575-$1.3625 initially, and possibly a return toward the September low. The implied yield of the December 2021 short-sterling interest rate futures rose from 22 bp at the end of September to 47 bp at the end of October as the market.  It was encouraged by Bank of England officials to prepare for a hike at the meeting on November 4, ostensibly while it is still providing support via Gilt purchases.  If there is a surprise here, it could be that, given the unexpected softening of September CPI and the fifth consecutive monthly decline in retail sales, rising Covid cases, that the BOE chooses to take the more orthodox route.  This would entail ending its bond purchases, as two MPC members argued (dissented) at the previous meeting and holding off lifting rates a little longer.        Spot: $1.3682 ($1.3475)    Median Bloomberg One-month Forecast $1.3691 ($1.3630)  One-month forward $1.3680 ($1.3480)   One-month implied vol 6.8% (7.1%)      Canadian Dollar:  The three drivers for the exchange rate moved in the Canadian dollar's favor in October and helped it snap a four-month slide against the US dollar.  First, the general appetite for risk was strong, as illustrated by the strength of global stocks and the record highs in the US.  Second, the premium Canada pays on two-year money more than doubled last month to almost 60 bp from 25 bp at the end of September.  Third, commodity prices in general and oil, in particular, extended their recent gains.  The CRB Index rose 3.8% last month, the 11th monthly increase in the past 12, to reach seven-year highs.  The Bank of Canada unexpectedly stopped its new bond purchases and appeared to signal it would likely raise rates earlier than it had previously indicated.  The swaps market is pricing 125 bp of rate hikes over the next 12 months, with the first move next March or April.  Still, the US dollar's downside momentum stalled near CAD1.2300.  There is scope for a corrective phase that could carry the greenback into the CAD1.2475-CAD1.2500 area.     Spot: CAD1.2388 (CAD 1.2680)  Median Bloomberg One-month Forecast CAD1.2395 (CAD1.2580) One-month forward CAD1.2389 (CAD1.2685)    One-month implied vol 6.2% (6.9%)      Australian Dollar:  The Aussie's 4% gain last month snapped a four-month, roughly 6.5% downdraft.  Despite RBA Governor Lowe's guidance that the central bank does not anticipate that the condition to hike rates will exist before 2024 is being challenged by the market.  Underlying inflation rose above 2% in Q3. The central bank's failure to continue defending the 10 bp target of the April 2024 bond spurred speculation that it would be formally abandoned at the November 2 policy meeting.  The RBA's inaction unsettled the debt market.  The two-year yield soared almost 70 bp last month, and the 10-year yield rose nearly 60 bp.  Although the RBA could have handled the situation better, New Zealand rates jumped even more.  Its two-year yield jumped 80 bp while the 10-year yield surged by 58 bp.  Last month, the Australian dollar's rally took it from around $0.7200 to slightly more than $0.7550, where it seemed to stall, just in front of the 200-day moving average.  We suspect the October rally has run its course and see the Aussie vulnerable to a corrective phase that could push it back toward $0.7370-$0.7400.  The New Zealand dollar has also stalled ($0.7220), and we see potential toward $0.7050.       Spot:  $0.7518 ($0.7230)        Median Bloomberg One-Month Forecast $0.7409 ($0.7290)      One-month forward  $0.7525 ($0.7235)     One-month implied vol 9.1  (9.0%)        Mexican Peso:  The peso eked out a minor gain against the dollar last month.  However, the nearly 0.4% gain understated the swings in the exchange rate last month.  The dollar's recovery seen in the second half of September from almost MXN19.85 to nearly MXN20.40 at the end of the month was extended to a seven-month high around MXN20.90 on October 12.  It then proceeded to fall to almost MXN20.12 before the greenback was bought again.  A move above the MXN20.60 area now would likely signal a test on last month's high and possibly higher. Recall that the dollar peaked this year's peak set in March was near MXN21.6350. The economy unexpectedly contracted in Q3  by 0.2% (quarter-over-quarter).  Nevertheless, with the year-over-year CPI at 6% in September, Banxico will see little choice but to hike rates at the November 11 meeting. The market expects a 25 bp increase.  A 50 bp hike is more likely than standing pat.       Spot: MXN20.56 (MXN20.64)   Median Bloomberg One-Month Forecast  MXN20.42 (MXN20.41)   One-month forward  MXN20.65 (MXN20.74)     One-month implied vol 9.6% (11.0%)      Chinese Yuan: Our starting point is the yuan's exchange rate is closely managed.  The fact that the yuan rose to four-month highs against the dollar and a five-year high against the currency basket (CFETS) that the PBOC tracks imply a tacit acceptance.  While it is tempting for observers to link the appreciation to securing an advantage as it secures energy supplies and other commodities, we note that the yuan's gains are too small (0.6% last month and less than 2% year-to-date) to be impactful.  We suspect that the dollar's recent weakness against the yuan will be unwound shortly.  The US government continues to press its concerns about the risk for investors in Chinese companies listed in the US and American companies operating in China. At the same time, the FTSE Russell flagship benchmark began including mainland bonds for the first time.  China's 10-year government bond is the only one among the large bond markets where the yield has declined so far this year (~16 bp).  On the other hand, Chinese stocks have underperformed.  That said, some investors see this underperformance as a new buying opportunity.  The NASDAQ Golden Dragon Index that tracks Chinese companies listed in the US fell by 30% in Q3 and gained 5% in October, its best month since February.  Lastly, the Central Committee of the Chinese Communist Party meets November 8-11 this year, a prelude to the important National Party Congress in 2022 that is expected to formally signal the third term for President Xi.     Spot: CNY6.4055 (CNY6.4450) Median Bloomberg One-month Forecast  CNY6.4430 (CNY6.4470)  One-month forward CNY6.4230 (CNY6.4725)    One-month implied vol  3.5% (3.4%)    Disclaimer

This year’s value of transactions on the investment land market in Poland is already record-breaking The demand for land for commercial investments has never been so high in Poland. Observing the activity of investors, we are looking a boom on the investment land market. The exceptionally large number of transactions recorded in recent months will bring the sector an absolutely record result. According to Walter Herz's estimates, this year’s value of the transaction volume may be almost 60 per cent higher than in the best years of this segment. The vast majority, about two-thirds of land is purchased for residential investments. The biggest battle for plots goes on between the investors who build apartments. Land eligible for residential construction disappears from the market immediately. The purchase process is very fast, shortened as much as possible, so that the land does not go to the competition. - Investors have a large amount of capital, which they invest in land. Land is often purchased for cash. Plots of high value are also popular. More and more contracts are signed for amounts that have not been seen before. Purchases of plots of land at prices exceeding PLN 300 million are being finalized. At the same time, prices are constantly rising. The increase in rates is visible even in the semi-annual statement - says BartÅ‚omiej Zagrodnik, Managing Partner / CEO of Walter Herz. - Investors are actively looking for land, both on the Warsaw market and in the largest regional cities. Never before have regions enjoyed as much interest as they do now. The plots of land purchased are often intended for long-term investments. Investors are eager to buy land in Poland, because compared to Europe, the main markets in our country offer land at much lower prices. Investments in the real estate market, on the other hand, bring higher rates of return in Poland than in other European Union countries - explains BartÅ‚omiej Zagrodnik. A huge scale of transactions in land for housing The size of some investments is impressive. One of the largest transactions recorded on our market was the recent purchase of 62 ha of factory land in Warsaw's Å»eraÅ„ by Okam. Preparing the construction of a multi-stage investment, which is planned in this location, will take several years. Meanwhile, Walter Herz became involved in the process of commercialization of warehouse, production and office space located in the premises of the former car factory at Jagiellonska Street in Warsaw. A few weeks ago, White Stone concluded a land purchase transaction in Warsaw's Bielany district, by the Mlociny metro station, thanks to which it became the owner of 200 thousand sq m. of land for a total cost  of over EUR 23 million. Among transactions of a similar scale, there is also the purchase of a 12 ha plot in Warsaw's Wilanow district for PLN 263 million by Robyg, with a construction potential estimated at 104 thousand sq m. of useable floor space. This year, Vantage Development, a developer from Wroclaw, has acquired a 4.72 ha plot on the border of Gdansk’s Center and Mlode Miasto districts for PLN 222.5 million.  Grupa Geo from Cracow has bought land in the area of Wilda district in Poznan valued at PLN 206.1 million. Expensive acquisitions also apply to companies. The Goldman Sachs Group has just put up for sale real estate developer Robyg, which has one of the largest land banks in Poland, with a sales potential of over 23.3 thousand square meters of premises. Residential developers need land, not only for traditional investments aimed at individual clients, but also for projects implemented within the PRS segment. Nowadays, investment funds are keenly interested in this segment. The value of investments in apartments for rent is growing month by month. This sector, which is only developing in Poland, is now seeing record results. Due to the huge investment activity in the PRS sector, even greater competitiveness accompanying the process of purchasing land in attractive urban locations can be expected in the near future. According to Walter Herz data, the prices of plots intended for residential development in Warsaw, are in the range of PLN 1.5 thousand - PLN 7 thousand for useable floor space. Land for investments in the PRS sector in the largest agglomerations in the country has transaction prices in the range of PLN 1.7 thousand up to PLN 2.9 thousand for GLA. Hotel and office investments in standby mode 2021 is also another year characterized by a decrease in demand for plots intended for hotel facilities located in large cities. Previously planned hotel projects were suspended and some investments were transformed into residential projects. Transactions in the hotel segment are rare, but they do happen. PURO Hotels brand with Norwegian-Polish capital recently bought a property with a building permit in Warsaw's Center district, at Canaletta Street from Strabag Real Estate.  They intend to construct a hotel with over 200 rooms. On the other hand, plots for resort hotels in attractive seaside locations near the beach and within the most popular mountain resorts are still very popular. The pandemic also inhibited investors' activities on the market of land intended for office projects. - The office sector shows a steady interest in land in the best, central locations in the largest urban centers in the country. As in the case of hotels, some of the planned investments are redesigned for residential purposes, and more apartments are being arranged in multi-functional complexes prepared for construction, informs BartÅ‚omiej Zagrodnik. - Investors are now willing to buy well-located, older office buildings, planning to change their function in the long term. Instead of offices, they want to offer high-class apartments for rent in these places. Plots intended for office projects in Warsaw are offered at prices varying from PLN 1.3 thousand up to PLN 3.5 thousand per sq m. Land for logistics is worth its weight in gold The logistics sector is the second beneficiary of the new balance of power on the real estate market, alongside the residential segment. Investors are also make every effort to look for land for warehouse projects. According to Walter Herz analysis, the volume of transactions related to investments in land for warehouses increased by at least a fifth this year. The changes caused by the pandemic accelerated the growth of the e-commerce sector, which was followed by a rapid development of logistics and, consequently, the warehouse sector. Today, investment plots located on the outskirts of large cities attract a lot of attention. The most popular are Warsaw, Wroclaw, Cracow, the Tri-City and Poznan. Warehouse investments focus on the construction of small warehouses on the outskirts of the largest cities and less involvement in the construction of large logistics parks. A significant part of projects is initiated in the segment of city warehouses. For example, in Warsaw, a quarter of space under construction is located within the city limits. Due to the development of last mile logistics, plots of land for warehouses are also sought after in smaller urban centers. The highest rates are in the Warsaw agglomeration, the largest logistics center in the country. In Warsaw, prices are as high as PLN 700-800 /sq m. In Cracow, rents start from PLN 400/sq m. In the Wroclaw agglomeration, where there is a significant increase in interest in investments in the logistics segment, the prices are slightly lower than in Cracow. In Wroclaw, one has to pay about PLN 300/sq m. for the most attractive land for last mile logistics. In the vicinity of Poznan, land for warehouses is twice as cheap compared to Wroclaw. Land intended for warehouse projects in Poland in the so-called BIGBOX format, depending on the location, costs from PLN 80 to PLN 450/sq m. The changes caused by the pandemic also strongly influenced the development of the retail market, limiting investment activity in this sector to retail parks and convenience centers. Investors looking for land for such facilities are now focusing primarily on smaller towns. Retail parks record the largest growth in the history of the market. Most of them are built in smaller cities with under 50 thousand residents.

Office buildings that have solutions to limit the negative impact on the environment and reduce operating costs, at the same time provide a friendlier, safer and better organized work space. What do they offer? The change in the way of thinking about the work environment that has taken place since last spring did not ultimately affect the status of offices. On the contrary, after several months of hibernation, offices experience a renaissance. They are still a strong support in building the organizational culture of companies and a base for the development and cooperation of teams, training new employees, and a meeting place with clients. However, the expectations of the users of office buildings have changed. In addition, issues concerning the way buildings affect the natural environment and the people working in them have come to the fore. - Decision-making processes aimed at environmental protection are gaining momentum, which more and more often carry specific declarations of investors and developers, in which they undertake to reduce carbon dioxide emissions by buildings to zero in a specific time perspective - says Bartłomiej Zagrodnik, Managing Partner/CEO of Walter Herz. It became necessary to reevaluate the previously adopted standards and expand the scale of pro-ecological solutions, especially in the context of the climate change, which brings unexpected and dangerous weather phenomena. - The development of the market is focused on the implementation of intelligent, environmentally neutral buildings and the creation of innovative solutions that support the decarbonisation of the existing resources and adapting them to the current requirements in the field of sustainable development - explains Bartłomiej Zagrodnik. - The changes are also stimulated by such factors as rising electricity prices, costs of water consumption, heating and waste disposal. Office buildings are switching to green energy derived only from renewable sources, which not only has positive environmental effects, but also reduces operating costs. Hence, we also see the growing interest of tenants in real estate equipped with environmentally friendly solutions - says Bartłomiej Zagrodnik. Green energy and water saving The most modern buildings not only draw energy from renewable sources, but also use technologies that reduce its consumption by automating space management. There are also more and more common solutions enabling water retention, which is of key importance in the face of the water crisis. Facility owners are serious about the problem of shrinking water resources. They invest in gray water filtering and reuse systems and rainwater management, fittings and showers based on motion sensors to reduce network water consumption, as well as various types of water retention solutions. They create green roofs, terraces and rain gardens. Companies are also more likely to choose buildings that meet certain standards in this area, in order to take advantage of the possibility of reducing costs. In Poland, proper management of water resources is particularly important because in terms of our resources, we are on one of the last places in Europe, ahead of the Czech Republic, Cyprus and Malta. Unfortunately, the level of water consumption in the world is constantly increasing. Over the last century, it has increased sixfold. Crystal clear air, green enclaves and ecological crops There are many more factors that influence the efficiency of the office buildings. There are, among others, ventilation and air circulation systems that control and supply air of better quality than specified in the standards in high-class facilities, specialized filters and humidifiers, as well as carbon free finishing materials and solutions optimizing acoustics. Modern buildings expand the spectrum of solutions to become more work-friendly and environmentally friendly. Here, green also plays one of the main roles. We observe the creation of green enclaves around the buildings, the arrangement of courtyards, squares and recreation areas immersed in greenery, also with green concrete pavements that purify the air. Vegetation is usually selected in terms of low water demand and the possibility of producing a large amount of oxygen and absorbing toxins, and vines in the context of protecting the walls of the building from heating up. The complexes include refuges for birds and insects, as well as city apiaries and gardens for organic farming. Specially designed blocks, facades and roofs of buildings with elements reflecting sunlight are used to reduce the effect of the so-called urban heat islands. The interiors of office buildings are arranged in such a way as to activate users. For example, the central location of the stairs is to encourage the movement of pedestrians between the floors, which reduces the use of elevators. The promotion of infrastructure for cyclists in the office buildings is also conducive to the pro-health activity of employees and reducing the burden on the environment. Technologies that facilitate work organization The well-being of employees, so widely discussed today, is supported by the use of hybrid office management platforms in the most modern buildings, thanks to which the facilities can offer the so-called smart office. Applications available on smartphones improve the daily work organization. With their use, one can, among others, book an office arrival time or a parking space, enter the garage and take a lift to the selected floor avoiding contact with the other office users, book a conference room for a team or client meeting, and even report a printer issue. The key challenge was to provide people in the office environment with the greatest possible comfort and safety. It is to be guaranteed not only by generally available basic disinfectants, masks and gloves, but also by changes in the arrangement of offices. Such arrangement of office spaces, so that they are comfortable for everyone and provide various types of zones adapted to the new work profile. Therefore, companies most often decide to increase the distance between work stations, limit the number of large conference rooms that replace dedicated smaller rooms, boxes and booths for talks, as well as stands for creative team work. There are social zones, chill out rooms to rest, green terraces and winter gardens. The ambition of the office environment is also to create ecological spaces. Using as many recycled or reusable office supplies as possible, such as filter bottles instead of disposable plastic packaging. Undoubtedly, the reduction of the carbon footprint is also facilitated by the popularization of videoconferences, which significantly reduced business trips. Just as the already sanctioned electronic document flow previously contributed to minimizing the use of paper. Good service in the buildings is also increasingly important. The offer of additional services, similar to those provided by hotels, for example concierge service, is gaining in importance. The key condition is also direct access to the gastronomic offer, basic services and shops, preferably on the premises of the building. The changes taking place in the office market are generally aimed at perceiving space as a service. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

  Evergrande’s debt issues are a symptom of China’s deep structural problems. If the crisis spills over wider, gold may benefit, but we are still far from such a scenario. Beijing, we have a problem! Evergrande, one of China’s largest real estate developers and biggest companies in the world, is struggling to meet the interest payments on its debts. As the company has more than $300 billion worth of liabilities, its recent liquidity problems have sparked fears in the financial markets. They also triggered a wave of questions: will Evergrande become a Chinese Lehman Brothers? Is the Chinese economy going to collapse or stagnate? Will Evergrande make gold grand? The answer to the first question is: no, the possible default of Evergrande likely won’t cause a global contagion in the same way as Lehman Brothers did. Why? First of all, Lehman Brothers collapsed because of the run in the repo market and the following liquidity crisis. As the company was exposed to subprime assets, investors lost confidence and the bank lost its access to cheap credit. Lehman Brothers tried to sell its assets, which plunged the prices of a wide range of financial assets, putting other institutions into trouble. Unlike Lehman Brothers, Evergrande is not an investment bank but a real estate developer. It doesn’t have so many financial assets, and it’s not a key player in the repo market. The exposure of important global financial institutions to Evergrande is much smaller. What’s more, we haven’t seen a credit freeze yet, nor an endless wave of selling across almost all asset classes, which took place during the global financial crisis of 2007-2009. Given that the Lehman Brothers’ bankruptcy was ultimately positive for gold (although the price of the yellow metal declined initially during the phase of wide sell-offs), the fact that Evergrande probably doesn’t pose similar risks to the global economy could be disappointing for gold bulls. However, gold bulls could warmly welcome my answer to the second question: the case of Evergrande reveals deep and structural problems of China’s economy, namely its heavy reliance on debt and the real estate sector. As the chart below shows, the debt of the private non-financial sector has increased from about 145% of GDP after the Great Recession to 220% in the first quarter of 2021. So, China has experienced a massive increase in debt since the global financial crisis, reaching levels much higher than in the case of other economies. The rise in indebtedness allowed China to continue its economic expansion, but questions arose about the quality and sustainability of that growth. As Daniel Lacalle points out, The problem with Evergrande is that it is not an anecdote, but a symptom of a model based on leveraged growth and seeking to inflate GDP at any cost with ghost cities, unused infrastructure, and wild construction. Indeed, the levels and rates of growth of China’s private debt are similar to the countries that have experienced spectacular financial crises, such as Japan, Thailand, or Spain. But the significance of China’s real estate sector is much higher. According to the paper by Rogoff and Yang, the real-estate sector accounts for nearly 30% of China’s GDP. On the other hand, China has a relatively high savings rate, while debt is mostly of domestic nature. China’s financial ties to the world are not very strong, which limits the contagion risks. What is more, the Chinese government has acknowledged the problem of excessive debts in the private sector and started a few years ago making some efforts to curb it. The problems of Evergrande can be actually seen as the results of these deleveraging attempts. Therefore, I’m not sure whether China’s economy will collapse anytime soon, but its pace of growth is likely to slow down further. The growth model based on debt and investments (mainly in real estate) has clearly reached its limit. In other words, the property boom must end. Rogoff and Yang estimate that “a 20% fall in real estate activity could lead to a 5-10% fall in GDP”. Such growth slowdown and inevitable adjustments in China’s economy will have significant repercussions on the global economy, as – according to some research – China’s construction sector is now the most important sector for the global economy in terms of its impact on global GDP. In particular, the prices of commodities used in the construction sector may decline and the countries that export to China may suffer. Given that China was the engine of global growth for years, it will also slow down, and, with lower production, it’s possible that inflation will be higher. Finally, what do the problems of China’s real estate sector imply for the gold market? Well, in the short term, not so much. Gold is likely to remain under downward pressure resulting from the prospects of the Fed’s tightening cycle. However, if Evergrande’s problems spill over, affecting China’s economy or (a bit later) even the global economy, the situation may change. Other Chinese developers (such as Fantasia or Sinic) also have problems with debt payments, as investors are not willing to finance new issues of bonds. In such a scenario, the demand for gold as a safe-haven asset might increase, although investors have to remember that the initial rush could be into cash (the US dollar) rather than gold. Unless China’s problems pose a serious threat to the American economy, the appreciation of the greenback will likely counterweigh the gains from safe-haven inflows into gold. So far, financial markets have remained relatively undisturbed by the Evergrande case. Nevertheless, I will closely monitor any upcoming developments in China’s economy and their possible effects on the gold market. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.

  If the dollar goes through a corrective downswing, it’s more bullish for gold? Not if a decline in the euro caused gold to rise in the first place. Another day, another new yearly high for the USD Index. The U.S. currency soars just like it has since the beginning of the year, in tune with what I said at that time, (and against what almost everyone else said about its outlook). The rally accelerated recently, with the USD Index soaring by 0.78 this week – and it’s only Wednesday today. So, surely that’s bullish for the USD Index? - one might ask. No. “Bullish” or “bearish” relates to the future, not to the past. In fact, the rally in the USD Index might need a breather as all markets – no matter how bullish or bearish the situation is in them – can’t rally or decline in a straight line, without periodic corrections. The USD Index, gold, silver, mining stocks, and practically all the other markets are no exception from this rule. Even the real estate prices don’t increase over the long run without periodic downturns. As you can see on the above chart, the U.S currency index soared to almost 96 yesterday and it’s after an almost straight-up rally. This rally caused the RSI indicator to move above 70, and this has been a quite precise short-term sell signal this year. In fact, in all cases when we saw it, some kind of short-term correction followed. Based on the size of the current rally, it seems that the current situation is most similar to what we saw in early March and in late June. That’s when we saw short-term declines that took the USDX approximately a full index point lower. In the current case, it could mean a decline back to 95. This would be a perfectly natural thing for the USD Index to do right now, given that the previous resistance (which now serves as support) is located slightly below 95. The support is provided by the late-2020 high and the March 2020 low (not visible on the above chart). So, surely this corrective downswing in the USD Index would cause an even bigger rally in the precious metals sector, right? That’s where things get complicated. You see, the biggest (over 50%) part of the USD Index (which is a weighted average) is the EUR/USD currency pair. Let’s take a look at it. The Euro Index moved sharply lower last week and just like the RSI based on the USD Index flashed a sell signal, the RSI based on the Euro Index flashed a buy signal. Also, the Euro Index just moved to the lower border of its declining trade channel, which is likely to indicate some kind of rebound. Why am I discussing the euro here? Because that’s what’s complicated about the current USD-gold link. The euro recently declined and the prices of silver and gold recently rallied shortly after dovish comments from the eurozone. Namely, while the expansionary nature of fiscal and monetary decisions in the U.S. might be after its peak (with the infrastructure bill signed even despite high inflation numbers), the eurozone is far from limiting its expansionary (i.e., inflationary) policies, and it was just made clear recently. That was bearish for the euro and bullish for the gold price – as more money (euros in this case) would be chasing the same amount of physical gold bars. The point here is that it might have been the decline in the value of the European currency that caused gold to rally, and it had little to do with what happened in the USD Index. Don’t get me wrong, most of the time, the gold-USD link is stable and negative. In some cases, gold shows strength or weakness by refusing to move in tune (and precisely: again) with the U.S. dollar’s movement. But in this case, it seems that it’s not about the U.S. dollar at all (or mostly), but rather about what happened in the Eurozone and euro recently. I marked the recent decline in the euro and the rally in gold with a golden rectangle. The usual link between gold-USD would have one assume that lower USD Index values (due to higher EUR/USD values) would trigger a rally in gold. However, given how things worked and the fact that we saw/heard the news coming from the Eurozone, it seems like this “temporary” and “bearish for the PMs” interpretation would actually prevail. It could also be the case that we see some kind of mixed reply from the precious metals sector when the USD Index and the Euro Index correct. The PMs could for example fall only after the situation regarding the gold-USD link gets back to normal – that is perhaps after both currencies correct. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Summary:  The economist consensus anticipates inflation will start falling from early next year. We disagree. We consider the market to be too complacent regarding upside risks to the inflation outlook. The great awakening of workers and the steady rent increase (for the United States) are two of the factors which are likely to maintain inflation uncomfortably high into 2022, in our view. October CPI figures released earlier this week confirm that inflationary pressures may last longer than initially expected. Inflation reached levels which have not been seen for decades in the United Kingdom (+4.2% YoY), in the eurozone (+4.1% YoY) and in Canada (+4.7% YoY). In Canada, the jump in inflation is the strongest recorded in 18 years. For now, investors are confident. They believe the U.S. Federal Reserve and European Central Bank’s narrative that inflation will start to fall from early next year. This is far from certain, in our view. From supply chain bottlenecks to energy prices, everything suggests that inflationary pressures are far from over. Expect energy prices to continue increasing as temperatures will drop in Europe from next week onwards. This will weigh on November CPI data which will be released next month. The peak in inflation has not been reached. We fear investors are too complacent regarding upside risks to the inflation outlook. Every economic theory says inflation will be above 2% next year : ·         The Phillips curve is alive and well : workers are demanding higher salaries, amongst other advantages and their expectations are rising. ·         Monetarism : the global economy is characterized by large deposits, desire to spend and to convert cash into real assets. ·         Commitment approach : the U.S. Federal Reserve (Fed) and the European Central bank (ECB) have a dovish bias. This is confirmed by their new inflation strategy (symmetric 2% inflation target over the medium term for the ECB and inflation of 2% over the longer run for the Fed). ·         Fiscal approach : high public debt and fiscal dominance (central banks need to remain dominant market players in the bond market to avoid a sharp increase in interest rates). ·         Supply-side approach : supply bottlenecks due to the zero Covid policy in China and central banks’ trade off higher inflation for a speedier economic recovery (the ECB especially). ·         Green transition : this is basically a tax on consumers. What has changed ? The wage-price spiral has started. In countries where the labor market is tight, workers are asking for higher salaries. In the United States, the manufacturer John Deere increased salaries significantly : +10% this year and +5% in 2023 and in 2025. It also agreed to a 3% bonus on even years to all employees, for instance. But this is happening in countries where the unemployment rate is high too. In France, the unemployment rate is falling. But it remains comparatively elevated at 7.6% in the third quarter. Earlier this week, the French Minister of Economy, Bruno Le Maire, called for higher salaries in the hospitality industry. A survey by the public investment bank BPI and the pro-business institute Rexecode show that 26% of small and medium companies are forced to propose higher salaries to find employees. Those which are reluctant choose to reduce business activity. The pandemic has fueled a great awakening of workers, in our view. They are demanding more : better job conditions, higher wages, more flexibility and purpose from work. This is more noticeable in countries facing labor shortage. But it is also visible in all the other developed economies to a variable extent.   U.S. steady rent increase is a game-changer. Until now, supply bottlenecks were the main driver behind the jump in prices. Now, housing costs (which represent about a third of living cost) and prices in the service sector are accelerating too. The rental market is tight, with low vacancy rates and a limited stock of available rentals. Expect rents to move upward in the coming months. According to official figures, owner’s equivalent rent, a measure of what homeowners believe their properties would rent for, rose 3.1% YoY in October. This certainly underestimates the real evolution of rents. Based on data reported by real estate agents at national level, the increase is between 7% and 15% YoY. All in all, this reinforces the view that inflationary pressures are proving more persistent than expected. The moment of truth : Expect investors not to question much the official narrative that inflation is transitory, for now. But if inflation does not decrease from 2022 onwards, investors will have to adjust their portfolio to an environment of more persistent inflation than initially anticipated. This may lead to market turmoil. In the interim, enjoy the Santa Claus rally which has started very early this year. The new inflation regime in the United States

From quarter to quarter, more and more warehouses are built in our country, resulting in Poland ranking second in Europe in terms of resources under construction. New players are also entering our market Despite the record-high amount of space under construction, new supply on the warehouse market in our country is not keeping up with the ever-growing demand. Lease volume recorded in the first half of this year, was three times larger than the amount of the commissioned space. The largest number of warehouses appeared in Upper Silesia, Warsaw and the Tri-City. The amount of warehouse space under construction is similar to the level of lease recorded in the first 6 months of this year. In the second quarter, the warehouse space under construction increased by a third compared to the previous quarter. According to Walter Herz, most logistics facilities remain in Upper Silesia, in Western Poland and in Poznan. A total of over 1.5 million sq m. of space is under construction in these three regions. The scale of the increase in warehouse resources ranks Poland second in Europe, after Germany. New investors The group of investors active on our market in the warehouse sector is also growing. Recently, Scandinavian fund NREP started its expansion in Poland, finalizing the purchase of logistics portfolio of 130 thousand sq m. of space and planning activities in the segment of warehouses and apartments. LCube company, after starting the investment in Jasionka near Rzeszow, recently launched its second warehouse project near Wroclaw. - Developers are also taking up speculative ventures today, because the demand for warehouses remains at a record high level. Recently, facilities in the area of city logistics have been very popular. Nevertheless, all segments of the warehouse market remain on the path of growth. The largest transactions are concluded by companies from the e-commerce sector, logistics operators are also invariably in high demand - informs BartÅ‚omiej Zagrodnik, Managing Partner/CEO of Walter Herz. - Market observers agree that the demand for warehouses in our country, as in Europe, will continue to grow. First of all, thanks to the forecasted, further increase in online sales and the development of e-commerce, as well as the expected expansion of tenants from the manufacturing industry - adds BartÅ‚omiej Zagrodnik. Emerging warehouse centers Warsaw remains the largest logistics hub in the country, where demand for warehouse space in 2020 reached 1.2 million sq m. and resources exceed 5 million sq m. The second, largest warehouse center in Poland is Upper Silesia, with stock reaching almost 4 million sq m. of space. The next position is occupied by the warehouse hub located in the central part of Poland, where approximately 3.3 million sq m. of space is located. Wroclaw and Poznan also belong to the group of the largest logistics centers. The potential of the largest warehouse markets in our country is constantly growing, but smaller logistics centers are also experiencing intense growth. The Tri-City, Szczecin and the center in Western Poland will join the centers offering over 1 million sq m. of warehouse space after the completion of the current construction projects. New warehouse investments are multiplying all over the country. In Lower Silesia, on the 20 ha plot, Panattoni has started the construction of Panattoni Park GÅ‚ogów investment, which will provide a total of 111 thousand sq m. of space. The first of the two scheduled buildings will provide 78 thousand sq m. of space. The developer is also starting the implementation of another project in this region - Panattoni Park BolesÅ‚awiec, which will bring 50 thousand sq m. of warehouses. In addition, Panattoni has started the next stage of construction of their largest investment in Lower Silesia - WrocÅ‚aw Campus 39 - in Wierzbice near Wroclaw. It will offer a total of 150 thousand sq m. of space. Large facilities near Wroclaw GLP is building WrocÅ‚aw V Logistics Center, the largest warehouse project currently under construction in the Wroclaw agglomeration. 5 buildings of approximately 240 thousand sq m. are to be erected on 50 ha of land. Moreover, the construction of a facility offering 41 thousand sq m. has already started in Magnice near Wroclaw. Hillwood Polska is also building in Lower Silesia. Nearly 90 thousand sq m. of warehouses will be built in Sycow. The first building will bring over 44 thousand sq m. of space. Mountpark Logistics has also started construction. The first phase of the investment will provide 35 thousand sq m. of space, and the entire warehouse and logistics complex Mountpark WrocÅ‚aw will offer 140 thousand sq m. of warehouses. In Gorzow Wielkopolski, MLP Group purchased a 12 ha plot designated for a modern logistics and distribution center MLP Gorzów Wielkopolski with a lease area of 52 thousand sq m. Accolade company has also invested in the expansion of warehouses in this city, acquiring further investment areas. The company is planning on constructing industrial warehouses of almost 100 thousand sq m. At the western border, by the national road No. 24, Hillwood Rokitno logistics center of 112 thousand sq m. is also being built. The company is currently also implementing Hillwood Bydgoszcz investment of a similar size. Also in Swiebodzin, in Lubuskie Province, Amazon has recently opened its tenth logistics center in Poland, providing 193 thousand sq m. Szczecin under development New warehouse facilities are also emerging in Szczecin. Accolade company has acquired two industrial properties there. Modern warehouse spaces with a total of 73 thousand sq m. will be built on the land. The currently implemented stage of the project at Kniewska Street in Szczecin will include 31 thousand sq m. of space. In Goleniow, Panattoni Park Goleniów with a target area of 54 thousand sq m. is under construction. Nearly 20 thousand sq m. has been built so far. Pruszcz Logistics is preparing an investment in Bedzieszyn, which will bring about 50 thousand sq m. Apart from the warehouse hall, the project will include an office building. GLP, in turn, plans to implement the next stage of the Pomeranian Logistics Center in Gdansk. Another 39 thousand sq m. of warehouse and production space is to be built in the vicinity of the DCT Gdansk container terminal. Further investments in Poznan MLP Group is expanding the MLP PoznaÅ„ West project near Poznan. Another 43,000 sq m. of warehouses will be built in the complex in DÄ…brówka. P3 is going to build a building providing 82.5 thousand square meters in P3 PoznaÅ„ park for Westwing, The company offers the possibility of extension with additional 27 thousand sq m. In addition, Panattoni Park PoznaÅ„ East Gate with 45 thousand sq m. will be built on a plot of 10 hectares in SwarzÄ™dz minicipality near Poznan. Good Point, a Real Management brand, is also planning the construction of warehouses and technology parks near Warsaw, on land in the municipalities of Gora Kalwaria and Karczew. In Strykow in the Lodz province, in the vicinity of the junction connecting the A1 and A2 motorways, Mountpark Logistics is preparing a warehouse and logistics center which will provide 245 thousand sq m. New warehouses in Upper Silesia The largest warehouse investment in Upper Silesia is GLP LÄ™dziny Logistics Center, where 111 thousand sq m. is to be delivered. In Gliwice, MDC2 company has purchased a plot of 13.4 ha designated for a warehouse and logistics facility. MDC2 Park Gliwice complex is to consist of three buildings with 52 thousand sq m. of warehouse space. In addition, European Logistics Investment has started the construction of a second warehouse building in Silesia. The implementation of Park Tychy II investment is to bring 43 thousand sq m. of space. In Miedzyrzecze, 7R company will also build a specialized warehouse with about 20 thousand sq m. for the production company Aluprof. Retailers are building facilities Chain brands are also investing in logistics. Jeronimo Martins is already building the seventeenth distribution center for Biedronka in our country. A complex of warehouse and logistics halls with 54 thousand sq m., will be built in Stawiguda near Olsztyn on a 9 hectare plot. ALDI chain, which plans to open 40 stores in Poland, is to have a new distribution center located near Bydgoszcz, with over 43 thousand sq m. Recently, Lublin province also issued a building permit for the largest logistics park in Europe. In Malaszewicze, a modern cargo transshipment hub between Asia and Europe is to be built in the current dry port, which after the expansion will quadruple its capacity. The construction of the logistics park, which will occupy a key place on the New Silk Road route, is planned to start in 2022, and its implementation will take 5 to 6 years. The investment will cost over PLN 3 billion. Half of the funds are to come from the state budget. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

November 29, 2021  $USD, Covid, Currency Movement, Federal Reserve, Inflation, Japan Overview: The fire that burnt through the capital markets before the weekend, triggered by the new Covid mutation, burned itself out in the Asian Pacific equity trading earlier today. A semblance of stability, albeit fragile and tentative, has emerged. Europe's Stoxx 600 is up about 1%, led by real estate, information technology, and energy.  US index futures are trading higher, with the NASDAQ leading.  Benchmark 10-year yields are firmer.  The US 10-year Treasury yield has risen about six basis points to 1.53%.  European yields are mostly 1-2 basis points higher, while the UK Gilt yield is up four basis points. The dollar remains, as we say, at the fulcrum of the major currencies, but in an opposite way, with the funding currencies that rallied strongly before the weekend seeing their gains pared today, while the dollar bloc and Scandis trade firmer.  Among the emerging market currencies, the liquid and freely accessible currencies, such as the South African rand, Russian rouble, and Mexican peso are leading the recovery.  The Turkish lira and central European currencies, perhaps dragged down by the softer euro, underperform.  The JP Morgan Emerging Market Currency Index is slightly firmer after falling around 0.4% before the weekend.  Gold held support near $1780 but has been unable to resurface above $1800.  January WTI jumped by about 5% after the 13% drop at the end of last week.  Iron ore surged 6.5%, recouping in full the 5.6% decline in the last session to approach its recent highs.  Winter weather is beginning to be experienced in Europe, and natural gas (Netherlands) is up 7.75% after falling 4.8% ahead of the weekend.  Copper is recouping a little less than half of last Friday's nearly 4% fall.   Asia Pacific Faced with much unknown about the new mutation, several Asia Pacific countries are opting to close their borders to foreign travelers.  Initially, countries limited the travel ban to a handful or so of countries from Southern Africa.  It does appear that the omicron variant has been around before being sequenced in South Africa, and it is has been found in several countries. However, the origin is still not clear.  While some reports from South Africa suggest mild symptoms, there is good reason for the World Health Organization's caution.  If a new vaccine is needed for the variant, reports suggest it could take around 100 days.  Recall that Japan has lifted its formal emergency in late September, and the economy is rebounding as anticipated.  Today's data showed retail sales rose for a second month in October.  The 1.1% increase lifted the year-over-year rate to 0.9%.   Purchases of clothing and food surged by 9.2%.  Auto sales, still hampered by supply chain disruptions, was the only category that fell.  After a frustratingly slow start, Japan's inoculation efforts have been successful, and the vaccination rate is above 75%.   Before news of the new variant broke, the dollar was around JPY115.50.  It fell to nearly JPY113.00 before the weekend.  It recovered in early dealing to almost JPY113.90 before the weakness of the regional equities contributed to its push lower.  Bloomberg pricing data showed it recorded a JPY112.99 low near midday in Tokyo.  It bounced to almost JPY113.65 in late dealings and has been consolidating in the European morning.  The option for $350 mln at JPY113.40 that expires today has likely been neutralized.  The market appears to be waiting for a new development to push it out of the JPY113-JPY114 range.  The Australian dollar held the pre-weekend low slightly below $0.7115 and is making session highs late in the European morning near last Friday's high (~$0.7155).  Nearby resistance is seen in the $0.7180-$0.7200 area. Recall that last week's 1.55% decline was the fourth consecutive weekly loss and the largest in three months.  The greenback gave up its pre-weekend gain against the Chinese yuan and a bit more today.  It did not even trade above CNY6.39 today, settling above it at the end of last week.  As we have noted, it remains within the range set on November 16 of roughly CNY6.3670-CNY6.3965. The PBOC set the dollar's reference rate at CNY6.3872 and continued to set it above expectations (CNY6.3858, via Bloomberg).   Two issues seem to be receiving attention today.  First are the prospects of easing by the PBOC in the face of continuing weakening of the economy. The November PMI will be released starting first thing tomorrow.  Second, China's property developers have an estimated $1.3 bln in debt servicing next month, following $2 bln this month.   Europe Outside of the virus, two issues dominate investors' attention in Europe today.  First are the November inflation reports from Spain and Germany ahead of the preliminary aggregate figures tomorrow.  The other is the increasingly bellicose rhetoric between the UK and France over the channel crossings and fishing.   Spain's harmonized November CPI rose by 0.3% to lift the year-over-year rate to 5.6%.  It is the fastest pace since 1992.  It follows October's 1.6% increase and 5.4% 12-month rate.  Food and energy were the main drivers.  The increase was in line with forecasts.  In September, the central bank's chief economist had anticipated that November could be the peak in inflation and anticipated it falling back below the 2% target in 2022.  German states are reporting their November CPI figures, and the country's measure will be reported late today.  The states' measures are consistent with forecasts calling for the nation's harmonized measure to fall around 0.2%.  However, the year-over-year pace is projected to accelerate to 5.5% from 4.6% due to the base effect.  The EMU aggregate preliminary CPI is forecast (Bloomberg median) to be flat on the month for a 4.5% year-over-year pace (up from 4.1% in October).  The core rate is projected to climb to 2.3% from 2.0%.  The euro poked slightly above $1.1330 at the end of last week and settled just above $1.1315.  It traded near $1.1260 in late Asia/early Europe and caught a bid that brought it back to about $1.1290.  There is a 1.7 bln euro option at $1.13 that expires today.  The intraday momentum indicators are getting stretched, warning of the downside risk in early North American activity.  Sterling recorded a new low for the year ahead of the weekend, near $1.3280. It is trading in about a quarter-cent range today, around $1.3335, and staying within last Friday's range.  The pre-weekend high was closer to $1.3365.   After an eight-day rally, the December short-sterling interest rate futures contract is trading slightly heavier today.  The market expectations have shifted from a good chance of a hike next month to a bit more than a third of a chance.   America The US auto sales and jobs highlight this week, but Fed officials are out in force too.  Today Powell, Williams, and Hasson speak at an innovation conference, and Bowman discusses the central bank and indigenous economies. Tomorrow, Powell and Yellen testify before a Senate committee on the CARES Act.  Their prepared remarks are expected to be released later today that may also work for the testimony on Wednesday on the same topic before a House committee.    Tuesday, Clarida discusses the Fed's independence, while Williams will speak on food security.  The Beige Book, in preparation for next month's FOMC meeting, is due Wednesday too.  No fewer than five Fed officials speak in the second half of the week.  Our initial bias continues to be for faster tapering at the December FOMC meeting. It still seems to be the prudent course to maximize the Fed's ability to respond to a broad range of probable economic outcomes.  The US pending home sales and the Dallas Fed manufacturing survey, due today, are not typically market movers.  And today is unlikely to be an exception.  Canada reports its Q3 current account surplus (expected to be around C$5.7 bln, up from C$3.6 bln in Q2.  It also reports raw material and industrial prices for October.  The week's highlight is tomorrow's September and Q3 GDP, followed by Friday's employment report.  Mexico reports October unemployment figures (median forecast in Bloomberg's survey calls for a 4.07% rate, down from 4.18% in September). Concerns about President AMLO's appointment to the central bank lingers even though the peso may benefit from the correction to the 1.6% pre-weekend drop.   The US dollar spiked to almost CAD1.28 before the weekend.  It fell to nearly CAD1.2720 today.  The pullback was seen in Asia, and it has been consolidating since then.  Still, the greenback looks vulnerable to a further retracement of the pre-weekend gains. Initial potential extends toward CAD.2680-CAD1.2700.   The broader risk appetites may be the key today for both the Canadian dollar and Mexican peso.  The greenback jumped to MXN22.1550 amid the pre-weekend turmoil.  This now marks the high for the year.  It pulled back initially to MXN21.6850 in Asia, but the selling pressure eased, and it traded in an MXN21.7630-MXN21.9000 range in Europe.  We suspect the combination of the trajectory of US monetary policy plus the concerns about the central bank of Mexico boosts the chances that the peso underperforms generally.  Moreover, rising price pressures and a weak economy put officials in a difficult position, especially given AMLO's reluctance to deploy fiscal measures to support the economy.   Disclaimer

Macro 2021-12-06 08:45 6 minutes to read Summary:  Friday saw global markets weakening again in another violent direction change from the action of the prior day. With futures for the broader US indices up this morning, the damage is somewhat contained, even if nerves are ragged. At the weekend, cryptocurrencies suffered a major setback in what looked like a run on leveraged positions that erased 20 percent or more of the market cap of many coins before a bit more than half of the plunge was erased with a subsequent bounce. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - despite the US 10-year yield pushed lower on Friday on the string of strong macro numbers, Nasdaq 100 futures are oddly weak in early European trading hours sitting around the 15,700 price level. The 100-day moving average down at 15,400 is the key price level to watch should the weakness in US technology and bubble stocks continue today. We see clear exposure overlap between cryptocurrencies and growth stocks, and with the steep plunge in Bitcoin over the weekend the risk-off might not be over. Stoxx 50 (EU50.I) - Stoxx 50 futures continue to be in a tight trading range sitting just above the 4,100 level this morning with little direction as traders are still digesting the US labour market report and Omicron news which at the margin seems to be improving somewhat, although expectations are still that jet fuel demand will be impacted. The weaker EUR is also short-term helping some of the exporters in Europe and generally leading to positive sentiment in early trading with European equities up 1%. USDJPY and JPY crosses – USDJPY closed the week near 112.50-75 support that was tested multiple times last week, but is once again rebounding overnight, while JPY crosses elsewhere continue to trade heavily, with the likes of AUDJPY, a traditional risk proxy, cementing the reversal back lower and GBPJPY closing the week near a significant zone of support into 148.50-149.00. Safe haven seeking in US treasuries at the long end of the curve are the key coincident indicator driving the JPY higher, with Friday’s weak risk sentiment driving fresh local lows in US long yields, with the 30-year T-bond yield at its lowest since January, below 1.75%. AUDUSD – the AUDUSD slide accelerated Friday in what looks like a capitulation ahead of tonight’s RBA meeting, where the feeling may be that there is a high bar for a surprise, given that the RBA has declared it would like to wait for the February meeting before providing guidance on its ongoing QE. Weak risk sentiment and uninspiring price action in commodities (with the partial exception of the very important iron ore price for the Aussie recently) are weighing and the price action has taken the AUDUSD pair to the pivotal 0.7000 level, an important zone of support and resistance both before and after the pandemic outbreak early last year. Crude oil (OILUKFEB22 & OILUSJAN21) trades higher following its longest stretch of weekly declines since 2018. Today’s rise apart from a general positive risk sentiment in Asia has been supported by Saudi Arabia’s decision to hike their official selling prices (OSP) to Asia and US next month. Thereby signaling confidence demand will be strong enough to absorb last week's OPEC+ production increase at a time when mobility is challenged by the omicron virus. For now, both WTI and Brent continue to find resistance at their 200-day moving averages, currently at $69.50 and $72.88 respectively. Speculators cut bullish oil bets to a one-year low in the week to November 30, potentially setting the market up for a speculative-driven recovery once the technical outlook turns more friendly. US natural gas (NATGASUSJAN22) extended a dramatic collapse on Monday with the price down by 7% to a three-month low at $3.84 per MMBtu, a loss of 31% in just six trading day. Forecasts for warmer weather across the country have reduced the outlook for demand at a time where production is up 6.3% on the year. A far cry from the tight situation witnessed in Europe where the equivalent Dutch TTF one-month benchmark on Friday closed at $29.50 while in Asia the Japan Korea LNG benchmark closed at $34. Gold (XAUUSD) received a small bid on Friday following the mixed US labor market report, but overall, it continues to lack the momentum needed to challenge an area of resistance just above $1790 where both the 50- and 200-day moving averages meet. Focus on Friday’s US CPI data with the gold market struggling to respond to rising inflation as it could speed up rate hike expectations, leading to rising real yields. A full 25 basis point rate hike has now been priced in for July and the short-term direction will likely be determined by the ebb and flow of future rate hike expectations. US Treasuries (IEF, TLT). This week traders’ focus is going to be on the US CPI numbers coming out on Friday, which could put pressure on the Federal Reserve to accelerate tapering as the YoY inflation is expected to rise to 6.7%. Yet, breakeven rates started to fall amid a drop in commodity prices, indicating that the market believes that inflation is near peaking despite we are just entering winter. It is likely we will continue to see the yield curve bear flattening, as the short part for the yield curve is adjusting to the expectations of more aggressive monetary policies, and long-term yields are dropping as economic growth is expected to slow down amid a decrease in monetary stimulus and the omicron variant. Last week, the 2s10s spread suffered the largest drop since 2012 falling to 74bps. The 5s30s spread dropped to 53bps. What is going on? COT on commodities in week to November 30. Hedge funds responded to heightened growth and demand concerns related to the omicron virus, and the potential faster pace of US tapering, by cutting their net long across 24 major commodity futures by 17% to a 15-month low. This the biggest one-week reduction since the first round of Covid-19 panic in February last year helped send the Bloomberg Commodity index down by 7%. The hardest hit was the energy sector with the net long in WTI and Brent crude oil falling to a one year low. Following weeks of strong buying, the agriculture sector also ended up in the firing line with broad selling being led by corn, soybeans, sugar and cocoa. Evergrande plunges 16% to new low for the cycle. The situation among Chinese real estate developers is getting more tense with Evergrande’s chairman being summoned by Guangdong government on Friday as the company is planning a larger restructuring with its offshore creditors. The PBOC has said that they are working with the local government to defuse risk from a restructuring and the regulator CSRC said over the weekend that risks into capital markets are manageable. This week another real estate developer Kaisa Group is facing a deadline on debt which will be critical for the Chinese credit market. US Friday data recap: Services sector on fire, November jobs report stronger than headlines suggest. The November ISM Services report showed the strongest reading in the history of the survey (dating back to 1997) at 69.1, suggesting a red-hot US services sector, with the Business Activity at a record 74.6, while the employment sub-index improved to 56.5, the highest since April. The November employment data, on the other hand, was somewhat confusing. Payrolls only grew 235k vs. >500k expected, but the “household survey” used to calculate the unemployment rate saw a huge growth in estimated employment, taking the overall employment rate down to 4.2% vs 4.5% expected and 4.6% in October. The Average Hourly Earnings figure rose only 0.3% month-on-month and 4.8% year-on-year, lower than the 0.4%/5.0% expected, though the Average Weekly Hours data point ticked up to 34.8 from 34.7, increasing the denominator. Twitter sees exodus of leaders. Part of Jack Dorsey stepping down as CEO at Twitter is a restructuring of the leadership group which has seen two significant technology leaders at engineering and design & research steeping down. The new CEO Agrawal is setting up his own team for Twitter which if done right could make a big positive impact on the product going forward. What are we watching next? Study of omicron variant and its virulence, new covid treatment options. Discovery of omicron cases is rising rapidly, with some anecdotal hopes that the virulence of the new variant is not high, but with significant more data needed for a clearer picture to emerge. Meanwhile, a new covid treatment pill from Merck (molnupiravir) may be available in coming weeks in some countries as it nears full approval. Next week’s earnings: The earnings season is running on fumes now few fewer important earnings left to watch. The Q3 earnings season has shown that US equities remain the strongest part of the market driven by its high growth technology sector. Today’s focus is on MongoDB which is expected to deliver 36% y/y revenue growth in Q3 (ending 31 October). Monday: Sino Pharmaceutical, Acciona Energias, MongoDB, Coupa Software, Gitlab Tuesday: SentinelOne, AutoZone, Ashtead Group Wednesday: Huali Industrial Group, GalaxyCore, Kabel Deutschland, Dollarama, Brown-Forman, UiPath, GameStop, RH, Campbell Soup Thursday: Sekisui House, Hormel Foods, Costco Wholesale, Oracle, Broadcom, Lululemon Athletica, Chewy, Vail Resorts Friday: Carl Zeiss Meditec Economic calendar highlights for today (times GMT) 0830 – Sweden Riksbank Meeting Minutes 0900 – Switzerland Weekly Sight Deposits 1130 – UK Bank of England’s Broadbent to speak 0330 – Australia RBA Cash Rate Target   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher

Last Friday was marked by strong pressure on Chinese shares, which lost 10-20% each in New York trading due to the announcement that DiDi, the Chinese counterpart to Uber, will delist in the US and float in China by the middle of next year. This is a significant concession to the Chinese authorities, and investors took it as a signal that we will be hearing more announcements like this soon. This is probably Politburo’s policy turn from a stick to a carrot. Chinese equity indices have been falling since February due to three negative factors: regulatory restrictions on the technology sector, tight monetary policy and waning economic growth. However, the risks of an economic slowdown seem to have come to the forefront, pushing back fears of inflation and turning to monetary stimulus to stabilise financial markets. On Monday, the People’s Bank of China lowered the reserve requirement for banks, freeing up about $188bn of liquidity. The measures are designed to support small businesses by easing access to finance. The bank took the step because of early signs that inflationary pressures are stabilising and the need to get the economy back on growth. The policy easing is moderately negative for the renminbi and should weaken the yuan, taking it away from the 2.5-year highs against the dollar. Furthermore, the Chinese Politburo promises “healthy development” for the real estate sector. It is unlikely that this wording will allow the asset holders of distressed property developers Evergrande or Kaisa to breathe a sigh of relief. But for the market, such top-level attention raises hopes that the peak of pressure is over. Since the global financial crisis, China has largely ensured a growth recovery thanks to the massive stimulus to the economy. This year, the Politburo avoided such sweeping actions for fear of adding fuel to the inflation fire. However, it seems that they are not prepared to stay on the sidelines any further. Friday’s sell-off in the Chinese giants is reminiscent of a final blow to a trend, which is often followed by a reversal. We saw a similar thing with oil in April 2020. Today the H-Shares Index is taking out Friday’s momentum on the US markets, losing 2% and trading at 5.5-year lows, near the bottom of the long-term trading range, down more than 30% from the peaks. Reaching these levels has caused the authorities to move to support the economy and the financial system. We could then see increased buying on the realisation that the sell-off in Chinese companies has gone too far, pushing them back to multi-year lows.

Investors scramble to snatch up virtual plots of land in the Decentraland metaverse. Analysts criticize Sandbox for copying Decentraland’s Metaverse in many ways, considering MANA a dominant metaverse token. As Bitcoin price struggles to recover from a drop below $57,000, capital rotates into Sandbox and Decentraland. Grayscale Decentraland Trust now manages $64.9 million in MANA tokens. Decentraland is an institutional investor’s favorite. The metaverse token has witnessed a spike in inflows from investment firms. Grayscale’s Decentraland Trust has attracted institutions and high net worth investors over the past nine months. Decentraland dominates Metaverse with capital inflow from institutional investorsInstitutional investors have started pouring capital into Decentraland as Metaverse gains popularity. Grayscale Decentraland Trust, an investment product for institutions and high net worth investors, solely invests in MANA. The Trust has invested over $64.9 million in Decentraland tokens, enabling investors to gain exposure to MANA as a security without the challenge of buying, storing and safekeeping the token. Tokens.com recently purchased 116 parcels of digital real estate in Decentraland for $2.52 million. Decentraland was second to Sandbox in total volume traded over the past week. However, the top 10 most expensive metaverse sales ranged from $758,250 to $220,000 on Decentraland. The total transaction volume of Metaverse has been $1.4 billion over the past 24 hours. Decentraland price has posted 16% gains over the past 24 hours as capital rotation from Bitcoin to MANA continues. Analysts use Decentraland and Sandbox price trends as an indicator for metaverse tokens. Decentraland price has recovered from the flash crash on December 4, and analysts have observed hidden bullish divergence in the metaverse token. Decentraland price pulled off a gigantic recovery attracting new investors to the metaverse token. FXStreet analysts have evaluated the Decentraland price trend and predicted that the metaverse token could make a recovery to $5 eventually, with a break above $4.50 providing confirmation.

Equities 2021-12-10 00:00 4 minutes to read Summary:  Markets are facing speed bumps again as investors await key inflationary numbers and the Feds meeting outcome, key catalyst that will ultimately change market dynamics, with fiscal stimulus being taking away. The US benchmark the top 500 stocks fell from record high territory, falling for the first time in 4 days, while the ASX200 fell for the second day, dipping below its 50 day moving average. Growth names are being sold down and safe haven assets, bonds, the USD, the JPY, are gaining appeal. It is for three important reasons. Here is what you need to know and consider, plus the five elements to watch today. Firstly, investors are holding their breath ahead of key events: Friday’s US inflation data (tipped to show inflation rose 6.8% YOY in November), plus we are also seeing investors pre-empt that the Federal Reserve next week, will map out tapering and interest rate hikes for 2022. A poll by Reuters showed that 30 of the 36 economists expect the Fed to hike rates sooner than thought, rising rates four times from the third quarter of the year 2022 to the second quarter of 2023 (expecting rates to be 1.25-1.50%). This explains why investors took profits from nine of the major 11 US sectors overnight. So growth stocks and sectors that thrive in low interest rates; consumer discretionary, real estate and information technology, saw the most selling as a result. From a stock perspective Tesla fell 6%, Semiconductor giant Advanced Micro Devices, and Etsy-the e-commerce vintage store, both fell 5%, and chip maker Nvidia fell 4%. If you look at Saxo Markets themes that we track, you can also see the most money on a month-on-month basis, has come out of semiconductors, while the other themes we track are posting monthly gains. Secondly, it’s critical to be aware, the UK Prime Minister announced restrictions to curb Omicron’s spread -  so the UK entered new work-from-home guidance, that could cost the UK economy $2.6 billion a month (according to Bloomberg). Meanwhile, a study by a Japanese scientist found the new variant to be 4.2 times more transmissible in its early stage than delta. As such some companies are responding like Lyft saying their workforce can work remotely in 2022, while Jefferies asked staffers to WFH. This means, travel and tourism stocks could see short term pressure, Australian and US stocks that are exposed to the UK could also see pressure, while oil could see demand weakness here. Plus, it could be time to again rethink exposure to the office property sector, as it’s a likely to remain squeezed, while industrial and logistics real estate remain supported given the likely new shift to WFH. Thirdly – be aware of volatility. A measure of this, VIX CBOE Volatility Index rose for the first time in four days, rising back above the 50 day average. Volatility has fallen from its 12-month high and remains contained right now as Pfizer said its vaccine can neutralize the new COVID strain Omicron after three doses (two doses offer protection again severe disease). However, keep your ears to the ground. If tomorrow’s inflation data from the US is worse than expected, expect volatility to spike, and growth stocks to see further selling and expect safe haven assets (USD, bonds, USDJPY) to gain more attraction. Aside from the above – here’s 5 things to watch today; Firstly - let's go over Fortescue Metals (FMG) 1.FMG’s CEO, Elizabeth Gains just announced she is standing down, right in the thick of iron ore having a murky outlook. It’s not been an easy 12 month for FMG holders. FMG trades 7% lower this year, but it’s a far cry from its all-time high, down 30% from its peak as iron ore price remains in a bear market (down 40% from May). 2. FMG’s trading range has been restricted for two weeks as the world holds its breath to learn more about China’s property sector. FMG shares have broken out above their 50 day moving average but its trading has been even more so restricted over the last three days as its stock hit a key resistance level awaiting news from China. If good news comes, FMG could break out higher. But it looks murky. Majority of FMG revenue (94%) comes from iron ore, and its majority sold to China (90%) (unlike BHP that now diversifies its sales to other countries). And now… we are getting mixed signals from China, making iron ore’s outlook look hazy. 3. On the positive side; week-on-week Australian iron ore exports are up. China has increased its monthly imports of Australian iron ore in November, more than expected. This has supported the iron ore price rising 8.9% this week. 3. But on the negative side - Evergrande, one of China’s biggest property developers was just officially downgraded -labelled a defaulter by Fitch Ratings after failing to meet two coupon payments after a grace period expired Monday. This may now trigger cross defaults on Evergrande’s $19.2 billion of dollar debt. Also at the same time JP Morgan downgraded its outlook for iron ore expecting the iron ore to fall 7% to $92, while Citi expects seaborne iron ore prices to fall 60-$80/t in 2022 on Chinese policy changes. 4. However, Fortescue has been in the news this week, for its shift to a green future. Was this a tactic? A smoke Bomb? Yesterday FMG announced its Future Industries department signed a pact with the Indonesia to explore hydrogen projects. The day before Fortescue Future Industries (FFI) and AGL Energy (AGL) teamed up to explore repurposing NSW coal-fired power plants and turning them into green hydrogen production facilities – to hopefully create renewable electricity production, 250 megawatts (which will generate 30,000 tonnes of green hydrogen per year). AGL and FMG will undertake a feasibility study to repurpose AGL’s Liddell and Bayswater power stations, that both accounted for 40% of NSW’s carbon dioxide emissions. Sheesh. Secondly  – Australian analyst rating changes to consider ANZ AU: Reiterated as a Bell Potter BUY, PT $30.00, RRL AU: Regis Resources Raised to Outperform at RBC; PT A$2.50 EBO NZ: EBOS Raised to Outperform at Credit Suisse; PT NZ$43.14 FMG AU: JPMorgan downgrades FMG from Overweight to Neutral, dropping its PT from $22 to $20. RIO AU: JPMorgan downgrades RIO from Overweight to Neutral, dropping its PT from 113.00 to 102. MIN AU:  Reiterated as JPMorgan hold/neutral, dropping its PT from $47 to $40 Thirdly  - what else to watch today Annual General Meetings: HMC AU, PDL AU, PH2 AU, SOL AU Other Shareholder Events: AOF AU, HMC AU THL NZ: Tourism Holdings Halted in NZ Pending Proposed Transaction ADPZ NA: APG Buys 16.8% Stake in Ausgrid from AustralianSuper EBO NZ: Ebos Successfully Raises A$642m From Share Placement Fourthly - Economic news out 8:30am: (NZ) Nov. Business NZ Manufacturing PMI, prior 54.3 8:45am: (NZ) Nov. Card Spending Total MoM, prior 9.5% 8:45am: (NZ) Nov. Card Spending Retail MoM, prior 10.1% Fifthly - Other news to keep in mind: Australia Seen Facing Steeper Borrowing Costs If Slow on Climate RBA Likely to Stick With QE Until Election Over, BofA Says      ---   Markets - the numbersUS Major indices fell: S&P 500 -0.7% Nasdaq -1.7% Europe indices closed lower: Euro Stoxx 50 lost 0.6%,London’s FTSE 100 lost 0.2% flat, Germany’s DAX fell 0.3%Asian markets closed mixed: Japan’s Nikkei fell 0.5%, Hong Kong’s Hang Seng rose 1.1%, China’s CSI 300 rose 1.7%. Yesterday Australia’s ASX200 fell 0.3% Futures: ASX200 hints of a 0.14% fall today Commodities: Iron ore rose 1.3% to $110.50. Gold fell 0.4%, WTI crude fell 2% to  $70.94 per barrel. Copper fell 1.4% Currencies: Aussie dollar trades 0.4% lower at 0.7146 US. Kiwi down 0.3% to 0.6788 per US$ Bonds: U.S. 10-year yield fell 3.5bps to 1.4871%,Australia 3-year bond yield fell 0.8bps to 0.95%, Australia 10-year bond yield rose 6bps to 1.68%

https://www.midastouch-consulting.com/13122021-gold-recovery-ahead December 13th, 2021: The gold market is nearing the end of a difficult and very challenging year. Most precious metal investors must have been severely disappointed. Gold – Recovery ahead. Review 2021 started quite bullish, as the gold price climbed rapidly towards US$1,960 at the beginning of the year. In retrospect, however, this peak on January 6th also represented the high for the year! In the following 11.5 months, gold did not even come close to reaching these prices again. Instead, prices came under considerable pressure and only bottomed out at the beginning and then again at the end of March around US$1,680 with a double low. Interestingly, the low on March 8th at US$1,676 did hold until today. The subsequent recovery brought gold prices back above the round mark of US$1,900 within two months. But already on June 1st, another violent wave of selling started, which pushed gold prices down by US$150 within just four weeks. Subsequently, gold bulls attempted a major recovery in the seasonally favorable early summer phase. However, they failed three times in this endeavor at the strong resistance zone around US$1,830 to US$1,835. As a result, sufficient bearish pressure had built up again, which was then unleashed in the flash crash on August 9th with a brutal sell-off within a few minutes and a renewed test of the US$1,677 mark. Despite this complete washout, gold bulls were only able to recover from this shock with difficulty. Hence, gold traded sideways mainly between US$1,760 and US$1,815 for the following three months. It was not until the beginning of November that prices quickly broke out of this tenacious sideways phase and thus also broke above the 15-month downtrend-line. This was quickly followed by another rise towards US$1,877. However, and this is quite indicative of the ongoing corrective cycle since the all-time high in August 2020, gold prices made another hard U-turn within a few days and sold off even faster than they had risen before. Since this last sell-off from US$1,877 down to US$1,762, gold has been stuck and kind of paralyzed for three weeks, primarily trading in a narrow range between US$1,775 and US$1,785. Obviously, the market seems to be waiting for the upcoming FOMC meeting. Overall, gold has not been able to do much in 2021. Most of the time it has gone sideways and did everything to confuse participants. These treacherous market phases are the very most dangerous ones. Physical investors can easily sit through such a sideways shuffling. But leveraged traders had nothing to laugh about. Either the movements in gold changed quickly and abruptly or almost nothing happened for days and sometimes even weeks while the trading ranges were shrinking. Technical Analysis: Gold in US-Dollar Weekly Chart – Bottoming out around US$1,780? Gold in US-Dollars, weekly chart as of December 13th, 2021. Source: Tradingview Despite the 15-month correction, gold has been able to easily hold above the uptrend channel, which goes back to December 2015. The steeper uptrend channel that began in the summer of 2018 is also still intact and would only be broken if prices would fall below US$1,700. Support between US$1,760 and US$1,780 has held over the last three weeks too. The weekly stochastic oscillator is currently neutral but has been slowly tightening for months. Overall, gold is currently trading right in the middle of its two Bollinger bands on the weekly chart. Thus, the setup is neutral. However, bottoming out around US$1,780 has a slightly increased probability. Daily Chart – New buying signal Gold in US-Dollars, daily chart as of December 13th, 2021. Source: Tradingview On the daily chart, gold has been searching for support around its slightly rising 200-day moving average (US$1,793) over the last three weeks. However, eye contact has been maintained, hence a recapturing of this important moving average is still quite possible. Despite the failed breakout in November, the current price action has not moved away from the downtrend-line. A further attack on this resistance thus appears likely. Encouragingly, the daily stochastic has turned up from its oversold zone and provides a new buy signal. In summary, the chances of a renewed recovery starting in the near future predominate on the daily chart. In the first step, such a bounce could run to around US$1,815. Secondly, the bulls would then have to clear the downtrend-line, which would release further upward potential towards US$1,830 and US$1,870. The very best case scenario might see gold being able to rise to the psychological number of US$1,900 in the next two to four months. On the downside however, the support between US$1,760 and US$1,780 must be held at all costs. Otherwise, the threat of further downward pressure towards US$1,720 and US$1,680 intensifies. Commitments of Traders for Gold – Recovery ahead Commitments of Traders for Gold as of December 12th, 2021. Source: Sentimentrader The commercial net short position in the gold futures market was last reported at 245,623 contracts sold short. Although the setup has somewhat improved due to the significant price decline in recent weeks, the overall constellation continues to move in neutral waters. There is still no clear contrarian bottleneck in the futures market, where professional traders should have reduced their net short positions to below 100,000 contracts at least. Until then, it would still be a long way from current levels, which could probably only happen with a price drop towards US$1,625. As long as this does not happen, any larger move up will probably have a hard time. In summary, the CoT report provides a neutral signal and thus stands in the way of a sustainable new uptrend. However, given the current futures market data, temporary recoveries over a period of about one to three months are currently possible. Sentiment for Gold – Recovery ahead Sentiment Optix for Gold as of December 12th, 2021. Source: Sentimentrader Sentiment for gold has been meandering in the neutral and not very meaningful middle zone for more than a year. Furthermore, a complete capitulation or at least very high pessimism levels are still missing to end the ongoing correction. Such a high pessimism was last seen in spring of 2019, whereupon gold was able to rise more than US$800 from the lows at US$1,265 to US$2,075 within 15 months. This means that in the big picture, sentiment analysis continues to lack total capitulation. This can only be achieved with deeply fallen prices. In the short term, however, the Optix for gold has almost reached its lows for the year. At the same time, german mainstream press is currently asking, appropriately enough, “Why doesn’t gold protect against inflation? This gives us a short-term contrarian buy signal, which should enable a recovery rally over coming one to three months. Seasonality for Gold – Recovery ahead Seasonality for Gold over the last 53-years as of December 12th, 2021. Source: Sentimentrader As so often in recent years, precious metal investors are being put to the test in the fourth quarter of 2021. In the past, however, there was almost always a final sell-off around the last FOMC meeting between mid-November and mid-December. And this was always followed by an important low and a trend reversal. This year, everything points to December 15th or 16th. Following the FOMC interest rate decision and the FOMC press conference, the start of a recovery would be extremely typical. Statistically, gold prices usually finish the last two weeks of the year with higher prices, because trading volume in the west world is very low over the holidays, while in Asia, and especially in China and India, trading is more or less normal. Also, the “tax loss selling” in mining stocks should be over by now. Overall, the seasonal component turns “very bullish” in a few days, supporting precious metal prices from mid-December onwards. Typically, January in particular is a very positive month for gold, but the favorable seasonal period lasts until the end of February. Macro update and Crack-up-Boom: US-Inflation as of November 30th, 2021. ©Holger Zschaepitz Last Friday, inflation in the U.S. was reported to have risen to 6.8% for the month of November. This is the fastest price increase since 1982, when Ronald Reagan was US president, and the US stock markets had started a new bull market after a 16-year consolidation phase. Today, by contrast, the financial markets have been on the central banks’ drip for more than a decade, if not more than two. The dependence is enormous and a turn away from the money glut is unthinkable. Nevertheless, the vast majority of market participants still allow themselves to be bluffed by the Fed and the other central banks and blindly believe the fairy tales of these clowns. The Global US-Dollar Short Squeeze However, while inflation figures worldwide are going through the roof due to the gigantic expansion of the money supply and the supply bottlenecks, the US-Dollar continues to rise at the same time. A nasty US-Dollar short squeeze has been building up since early summer. The mechanism behind this is not easy to understand and gold bugs in particular often have a hard time with it. From a global perspective, the US-Dollar is still the most important reserve currency and thus also the most important international medium of exchange as well as the most important store of value for almost all major countries. Completely independently of this, many of these countries still use their own currency domestically. International oil trade and numerous other commodities are also invoiced and settled in US-Dollar. For example, when France buys oil from Saudi Arabia, it does not pay in its own currency, EUR, but in USD. Through this mechanism, there has been a solid demand for US-Dollar practically non-stop for decades. The US-Dollar system The big risk of this “US-Dollar system”, however, is that many foreign governments and companies borrow in US-Dollar, even though most of their revenue is generated in the respective national currency. The lenders of these US-Dollar are often not even US institutions. Foreign lenders also often lend to foreign borrowers in dollars. This creates a currency risk for the borrower, a mismatch between the currency of their income and the currency of their debt. Borrowers do this because they have to pay lower interest rates for a loan in US-Dollar than in their own national currency. Sometimes dollar-denominated bonds and loans are also the only way to get liquidity at all. Thus, it is not the lender who bears the currency risk, but the borrower. In this way, the borrower is basically taking a short position against the US-Dollar, whether he wants to or not. Now, if the dollar strengthens, this becomes a disadvantage for him, because his debt increases in relation to his income in the local currency. If, on the other hand, the US-Dollar weakens, the borrower is partially relieved of debt because his debt falls in relation to his income in the local currency. Turkish lira since December 2020 as of December 13th, 2021.©Holger Zschaepitz Looking, for example, at the dramatic fall of the Turkish lira, one can well imagine the escalating flight from emerging market currencies into the US-Dollar. Since the beginning of the year, Turks have lost almost 50% of their purchasing power against the US-Dollar. A true nightmare. Other emerging market currencies such as the Argentine peso, the Thai baht or even the Hungarian forint have also come under significant pressure this year. On top, the Evergrande bankruptcy and the collapse of the real estate bubble in China may also have contributed significantly to this smoldering wildfire. All in all, the “US-Dollar short squeeze” may well continue despite a technically heavily overbought situation. Sooner or later, however, the Federal Reserve will have to react and row back again. Otherwise, the strength of the US-Dollar will suddenly threaten a deflationary implosion in worldwide stock markets and in the entire financial system. The global house of cards would not survive such shock waves. The tapering is “nearish” It is therefore highly likely that the Fed will soon postpone the so-called “tapering” and the “interest rate hikes” until further notice. To explain this, they will surely come up with some gibberish with complicated-sounding words. All in all, an end to loose monetary policy is completely unthinkable. Likewise, the supply bottlenecks will remain for the time being. This means that inflation will continue to be fueled by both monetary and scarcity factors and, on top of that, by the psychological inflationary spiral. In these crazy times, investors in all sectors will have to patiently endure temporary volatility and the accompanying sharp pullbacks. Conclusion: Gold – Recovery ahead With gold and silver, you can protect yourself well against any scenario. In the medium and long term, however, this does not necessarily mean that precious metal prices will always track inflation one-to-one and go through the roof in the coming years. Most likely, the exponential expansion of the money supply will continue and accelerate. Hence, significantly higher gold and silver prices can then be expected. If, on the other hand, the system should implode, gold and silver will be able to play out their monetary function to the fullest and one will be glad to own them when almost everything else must be written down to zero. In the bigger picture, however, gold and silver fans will have to remain patient for the time being, because the clear end of the months-long correction has not yet been sealed. Rather, the most important cycle in the gold market should deliver an important low approximately every 8 years. The last time this happened was in December 2015 at US$1,045. This means that the correction in the gold market could continue over the next one or even two years until the trend reverses and the secular bull market finally continues. In the short term, however, the chances of a recovery in the coming weeks into the new year and possibly even into spring are quite good. But it should only gradually become clearer after the Fed’s interest rate decision on Wednesday what will happen next. A rally towards US$1,815 and US$1,830 has a clearly increased probability. Beyond that, US$1,870 and in the best case even US$1,910 could possibly be reached in February or March. For this to happen, however, the bulls would have to do a lot of work. Analysis initially written and published on on December 13th, 2021, by www.celticgold.eu. Translated into English and partially updated on December 13th, 2021. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. By Florian Grummes|December 13th, 2021|Tags: Gold, Gold Analysis, Gold bullish, Gold Cot-Report, gold fundamentals, gold mining, Gold neutral, Silver, The bottom is in|0 Comments About the Author: Florian Grummes Florian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets.

S&P 500 staged a very risk-off rally, not entirely supported by bonds. Value declined, not reflecting rising yields. Paring back recent gains on a very modest basis was palpable in financials and real estate, while (encouragingly for the bulls) consumer discretionaries outperformed staples. That‘s a testament to the stock bull run being alive and well, with all the decision making for the medium-term oriented buyers being a choice of an entry point. The brief short-term correction, the odds of which I saw as rising, is being postponed as the divergence between stocks and bonds grows wider on a short-term basis. Even the yield spreads on my watch keep being relatively compressed, expressing the Treasury markets doubts over the almost jubilant resilience in stocks. Make no mistake though, the path of least resistance for S&P 500 remains higher, and those trading only stocks can look forward for a great Dec return. Faced with the dog and pony debt ceiling show, precious metals dips are being bought – and relatively swiftly. What I‘m still looking for to kick in to a greater degree than resilience to selling attempts, is the commodities upswing that would help base metals and energy higher. These bull runs are far from over – it ain‘t frothy at the moment as the comparison of several oil stocks reveals. It‘s still about the dollar mainly: (…) The elephant in the room is (the absence of) fresh debt issuance lifting up the dollar, making it like rising yields more. Not only that these are failing to push value higher, but the tech resilience highlights the defensive nature of S&P 500 performance. Crucially though, precious metals are seeing through the (misleading dollar strength) fog, and are sharply rising regardless. Make no mistake, with the taper reaction, we have seen what I had been expecting (or even better given that I prefer reasonably conservative stance without drumming up expectations either way) – I had been telling you that the hardest times for the metals are before taper. Commodities and cryptos are feeling the greenback‘s heat most at the moment. It remains my view though that we aren‘t transitioning into a deflationary environment – stubborn inflation expectations speak otherwise, and the Fed‘s readiness to face inflation is being generally overrated, and that‘s before any fresh stimulus is considered. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls recaptured the reins in the very short-run, but it‘s the upswing sectoral internals that‘s preventing me from sounding the all clear. Credit Markets Credit markets look to be potentially stabilizing in the very short run – it‘s too early to draw conclusions. Gold, Silver and Miners Gold and silver declined, but the volume doesn‘t lend it more credibility than what‘s reasonable to expect from a correction within an uptrend. Forthcoming miners performance is key to assessing the setback as already over, or not yet. Crude Oil Crude oil bulls didn‘t got anywhere, and the oil sector resilience is the most bullish development till now. The absence of solid volume still means amber light, though. Copper The copper setback is getting extended, possibly requiring more short-term consolidation. Unless commodities swing below the early Nov lows, the red metal won‘t be a source of disappointment. Bitcoin and Ethereum Bitcoin and Ethereum crack in the dam is still apparent and open – the bulls haven‘t yet returned prices to the recent (bullish) range. I‘m though looking for a positive Dec in cryptos too, and chalk current weakness to the momentary dollar strength. Summary S&P 500 bulls leveled the short-term playing field, but the credit markets non-confirmation remains. Even though this trading range might not be over yet, it would be followed by fresh ATHs. Precious metals still have a lot of catching up to do, and will lead commodities into the debt ceiling showdown, after which I‘m looking for practically universally brighter real asset days - inflation expectations aren‘t declining any time soon. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

Part II Let's continue to explore the past 20 years of US Fed actions. I believe the US Fed has created a global expansion of both economies and debts/liabilities that may become somewhat painful for foreign nations – and possibly the US. Reading The Data & What To Expect in 2022 And Beyond In the first part of this research article, I highlighted the past 25 years of US Fed actions related to the DOT COM bubble, the 9/11 terrorist attack, the 2008-09 US Housing/Credit crisis, and the recent COVID-19 virus event. Each time, the US Federal reserve had attempted to raise interest rates before these crisis events – only to be forced to lower interest rates as the US economy contracted with each unique disruption. The US Fed was taking what it believed were necessary steps to protect the US economy and support the global economy into a recovery period. Sign up for my free trading newsletter so you don’t miss the next opportunity! The following few charts highlight the results of the US Fed's actions to keep interest rates extremely low for most of the past 20 years. I want to highlight what I believe is an excessive credit/debt growth process that has taken place throughout most of the developing world (China, Asia, Africa, Europe, South America, and other nations). At the same time, the US has struggled to regain a functioning growth-based economy absent of US Federal Reserve ZERO interest policies and stimulus. Extreme Growth Of World Debt (excluding the US) This Rest Of The World; Debt Securities & Loans; Liabilities chart highlights the extreme, almost parabolic, growth in debt and liabilities that have accumulated since 2005-06. If you look closely at this chart, the real increase in debt and leverage related to global growth started to trend higher in 2004-05. During this time, the US housing market was on fire, which likely pushed foreign investors and foreign housing markets to take advantage of this growing trend in US and foreign real estate. This rally in speculative investments, infrastructure, and personal/corporate debt created a huge liability issue throughout many developing nations. Personal and Corporate debt levels are at their highest levels in decades. A recent Reuters article suggests global debt levels have risen in tandem with real estate price levels and is closing in on $300 Trillion in total debt. (Source: fred.stlouisfed.org) GDP Implicit Price Deflator Rallies To Levels Not Seen Since 1982~83 The rally in the US markets and the incredible rise of inflation over the past 24 months have moved the consumer price levels higher faster than anything we've seen over the past 50+ years. We've only seen price levels rise at this pace in the 1970s and the early 1980s. These periods reflected a stagflation-like economic period, shortly after the US Fed ended the Gold Standard. This was also a time when the US Federal Reserve moved the Fed Funds Rate up into the 12% to 16% range to combat inflationary trends. If the GDP Implicit Price Deflator moves above 5.5% over the next few months, the US Fed may be forced to take stronger action to combat these pricing issues and inflationary trends. They have to be cautious not to burst the growth phase of the markets in the process – which could lead to a very large deflationary/deleveraging price trend. (Source: fred.stlouisfed.org) We need to focus on how the markets are reacting to these extreme debt/liability trends and extreme price trends. The markets have a natural way of addressing imbalances in supply/demand/pricing functions. The COVID-19 virus event certainly amplified many of these issues throughout the globe by disrupting labor, supply, shipping, and manufacturing for a little more than 12+ months. The future decisions of the US Federal Reserve will either lead to a much more orderly deleveraging/devaluation process for the US and global markets – supporting the natural economic functions that help to process and remove these excesses. Or, the US Federal Reserve will push interest rates too high, too fast, and topple the fragile balance that is struggling to process the excesses throughout the global markets. What does this mean? I believe this data, and all the charts I've shared with you in this research article, suggest the US Fed is trapped in a very strenuous position right now. I'll share more information with you regarding my predictions for December 2021 and 2022 in the third part of this article. I will also share my proprietary Fed Rate Modeling System's results in Part III of this article and tell you what I expect from the US Federal Reserve and US stock markets. WANT TO LEARN MORE ABOUT HOW I TRADE AND INVEST IN THE MARKETS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist

PRESS INFO Warsaw, December 20th, 2021 A record year is ahead for the sector of the smaller commercial facilities The growing trend of local awareness and the evolution of shopping habits increased the popularity of commercial convenience stores. Retail parks and small shopping centers have grown in importance, which in result motivates developers to undertake more intense actions. Each quarter, there are more and more investors who are planning to use this format and build commercial facilities. Apart from the flexibility of space and lower rental rates, the advantage of retail parks is their proximity to customers, a key factor in today’s world. - The popularity of smaller retail facilities is best evidenced by the fact that some brands prepare concepts specifically tailored for retail parks and everyday shopping centers. Chain stores have returned to their expansion plans and are starting the talks about leasing space in new locations. The discount sector, by locating its new outlets in retail parks, strengthens its position. Also, fashion brands, which previously limited their activity only to stores in galleries, started to look for new sales channels and thus have been turning up in smaller facilities. New brands are also entering our market, such as the DIY store Hipper.pl, with plans to locate a chain of it’s stores in retail parks - informs Agata Karolina Lasota, Managing Director at LBC Invest. The first three quarters of this year has already brought a greater increase in space in the retail sector than the entire previous year. During this time, the domestic resources increased by almost 330.000 m2 and according to the estimated data, throughout the 2021 the retail space market will be supplied by around 500.000 m2 of new retail space. – Currently, over 460.000 m2 of retail space is under construction nationwide, including 40 retail parks and convenience centers. In this format, over 200.000 m2 of new space will appear on the market this year, making it a historically record result. And developers are still turning up the heat. Retail parks and small shopping centers already account for over 60 percent of investments projects launched in the last quarter. They are usually built in cities with less than 100.000 residents, where there is a shortage of commercial space and cheaper land. It is a good way for the investors to strategically expand their investment portfolio or diversify their real estate portfolio - says Agata Karolina Lasota. New investment groups, with new brands of everyday shopping facilities started to appear on our market, such as the Polish-German investment group 4FI, which debuted with it’s first center called Mozaika in Krakow. Furniture and construction stores remain active and constantly develop their potential. This year, Agata Meble has commissioned new commercial warehouses in Bydgoszcz, while IKEA commissioned it’s one in Szczecin. Castorama in Zary and Leroy Merlin in Bydgoszcz, as well as Leroy Merlin in Kutno, were opened in buildings previously used by Tesco. A former Tesco facility in Warsaw is also being adapted for Leroy Merlin. The Atut Ruczaj Center in Krakow and Galeria Bawóchanka in Belchatow are expanding and building extensions. Andrychow Gallery was opened in December this year. New parks will be brought out to the market, including Saller Park Lipnik retail and service park, Premium Park Lubrza, Zabkowice Slaskie retail park, Sierpc Retail Park, Tuchola Park, S1 Center in Zlotoryja, Multishop Suwalki, Swinoujscie retail park and Stop Shop Zielona Gora. DS Retail Park is planning to open a retail park in Sosnowiec and Rembelszczyzna, and this year the company wants to commission a retail park in Reda. Fortis Investments is preparing further projects, with a total area of ​​17.000 m2, to be built, i.e., in Opoczno, Ciechocinek, Leczyca and Lowicz. The new retail park from DL Invest Group is being built in Mikolow. - Higher capitalization rates in our country, as compared to the European ones, in some cases reaching 7 %, is a strong impulse to invest in this real estate sector. - Agata Karolina Lasota informs. – Recently in the commercial sector, we have mainly seen transactions involving small real properties. Retail parks and convenience centers are attractive assets for investors. This is also confirmed by the large number of the ongoing negotiations regarding this format of the real properties. We are also talking about projects that are currently only at the stage of preparation for construction - comments the director of LBC Invest. - We have recently concluded contracts for the implementation of comprehensive investment processes, including commercialization of retail parks located in Krakow and two smaller cities in Lesser Poland and Pomerania regions. We are planning to start the implementation of the projects next year, and the design works are currently underway. Investors are both the clients from the African continent and Polish companies with whom we have been working successfully for many years - she adds. The growing demand for convenience real properties has resulted in over a dozen transactions this year, involving smaller shopping centers, mainly located in small towns. LCN, the American fund has acquired a number retail parks, as well as leased Auchan hypermarket chains with a total area of 107.600 m2 and located in Szczecin, Rybnik, Slupsk, Gdansk, Nowy Sacz and Lublin. Other facilities, such as Galeria Malta, Galeria Rumia, and Galeria Pestka, despite requiring a modernization, have also changed their owners.

22 December 2021 Following years of turmoil in retail, 2022 will bring rental growth and increased investment capital to the sector across Europe, according to Savills. The international real estate advisor said that the retail sector is better prepared for changes in consumer habits, while strong retail repricing - which has moved +80bps on average in Europe in the past four years - means retail assets are one of the most competitive real estate sectors. Savills’ European Investment Outlook 2022 identifies best-performing supermarkets and retail warehouses as the most sought-after investment deals, followed by convenience stores, commuting hubs and high street units in strong footfall areas. The report forecasts that prime retail warehouse yields will compress further by 5-10bps on average during the next 12 months, following a 4bps compression in the average prime retail warehouse yield in the last two quarters (to 5.2%). It added that shopping centre yields may start stabilising during 2022, after a 3bps increase to 5.3%. These retail trends are unfolding as investment into European commercial and residential property is on the rise, reaching €78.9bn in Q3 - the highest level recorded in a third-quarter over the past five years. Meanwhile €201.6bn of investment was transacted during the first three quarters of 2021 - a 13.5% jump on last year and a 7.7% increase on the past 5-year average. Savills estimates that the end-year volume will be around €288bn, a 9% increase year-on-year, and a similar total volume of around €290bn in 2022. “These are some stand out figures given the current circumstances,” said Oliver Fraser-Looen, joint head of Regional Investment Advisory EMEA, Savills. “Strong investment activity will continue until the end of the year.” The UK, Germany and France will remain the preferred investment destinations, but as increasing amounts of cross-border capital is invested in the Nordics, the region’s share in the total European volume could continue to expand. Despite growing deal volumes, investors will remain focussed on quality in 2022, particularly in the office sector, and with greater ESG imperatives ahead, property owners will be forced to renovate stock to achieve greener standards or repurpose buildings to embrace social values. Leila Packett, associate director, Regional Investment Advisory EMEA, Savills, said: “This will eventually provide some opportunities for value-add investors. Yet, we do not expect a significant return of the value-add investors at least until 2023, after a significant repricing in secondary asset classes. Historically, we have seen the interest of value-add investors rising in periods when the prime and secondary office yield gap is above 90bps, and during Q3 2021 it was 88bps.” Savills also said greater portfolio diversification would be a theme for years to come, in terms of assets, locations and strategies. The logistics and living sectors will also remain highly sought-after in 2022 and supply and demand imbalances in both sectors will create rental growth. But interest in the alternative sector will further increase as investors seek higher returns in a very low yield environment, said the firm. “Hospitals, universities, data centres, life sciences and urban farming are slowly growing on investors' radars,” said Lydia Brissy, director, Europe research, Savills. “We expect these sectors to gradually emerge as an asset class in the next five years.” Similarly, prime yields may harden by up to 15bps on average in European logistics, while the living sectors may see a 5-10bps yield compression. Michal Stepien, Associate, Investment, Savills Poland, said: “The resumed investor activity is also evident in Poland, where investors follow global trends and growth patterns, looking for stable returns and growth opportunities in order to protect the capital against inflation, as well as for ESG compliance. Industrial is still in the spotlight with offices right behind. There is also a recovering interest in retail, with a particular focus on convenience, standalone supermarkets and retail warehousing, nevertheless, due to limited supply of relevant investment product, the retail sector accounts for less than 14% of the investment volume. A balanced position of shopping centers and more attractive shopping centre yields are conducive to the return of investment capital to the retail sector, however, rising costs of energy and anti-inflation measures of the Central Bank may slow down consumer demand next year, which may adversely affect the turnover of popular chain stores and extend the ‘wait-and-see’ approach to this asset class.”

S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: (…) The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. We got the lower values, and today is shaping up to look likewise constructively for the bulls across both paper and real assets. Yesterday‘s dollar decline has helped as much as well bid bonds. Inflation expectations aren‘t yet doubting the Fed, there is no more compressing the yield curve at the moment, so it‘s all quiet on the central bank front. That‘s good, the Santa rally can go on unimpeded. Precious metals are peeking higher in what looks to be adjustment to the lower yields and dollar, and commodities upswing remains driven by energy, base metals and agrifoods. Cryptos hesitation may hint at slimmer gains today than was the case yesterday when instead of a brief consolidation, we were treated to improving returns. Merry Christmas if you‘re celebrating – and if not, happy holidays spent with your closest ones. Let the festive season and message of the Prince of Peace permeate our hearts and inspire the best in mankind. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rally goes on, and the 4,720s are again approaching. Market breadth isn‘t miserable in the least, and the riskier end of the bond spectrum looks positive even if larger time frame worries haven‘t gone away. Classic Santa Claus rally. Credit Markets HYG keeps jumping higher – the risk-on sentiment is winning this week. A bit more strength from LQD would be welcome, but isn‘t an obstacle to further stock market gains. Gold, Silver and Miners Gold downswing indeed weren‘t to be taken at all seriously – solid gains across precious metals followed. I‘m expecting a not too rickety ride ahead as the metals keep appreciating at relatively slow pace. Crude Oil Crude oil extended gains, and even if oil stocks paused, downswing in black gold isn‘t looming. Importantly, the $72 area has been overcome – the bulls should be able to hold ground gained. Copper Copper keeps tracking the broader commodities rally, and isn‘t outperforming yet. The red metal‘s long consolidation goes on, and a breakout attempt on par with early Oct seems to be a question of quite a few weeks (not days) ahead. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating Tuesday‘s gains – the performance is neither disappointing nor stellar. Both cryptos don‘t look to be in the mood for a break below Dec lows. Summary If not yesterday, then probably today we‘ll get a little consolidation of prior two day‘s steep S&P 500 and commodity gains (copper says) – the positive seasonality hasn‘t spoken its last word. HYG posture has significantly improved, and that bodes well for short-term gains still ahead before we dive into market circumstances turning increasingly volatile towards the end of Q1 2022. For now, let‘s keep celebrating – Merry Christmas once again – and enjoying the relatively smooth ride. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

As the US and global markets rattle around over the past 60+ days, many traders have failed to identify an incredible opportunity setting up in both Gold and Silver. Historically, Silver is extremely undervalued compared to Gold right now. In fact, Gold has continued to stay above $1675 over the past 12+ months while Silver has collapsed from highs near $30 to a current price low near $22 – a -26% decline. Many traders use the Gold/Silver Ratio as a measure of price comparison between these two metals. Both Gold and Silver act as a hedge at times when market fear rises. But Gold is typically a better long-term store of value compared to Silver. Silver often reacts more aggressively at times of great fear or uncertainty in the global markets and often rises much faster than Gold in percentage terms when fear peaks. Understanding the Gold/Silver ratio The Gold/Silver ratio is simply the price of Gold divided by the price of Silver. This creates a ratio of the price action (like a spread) that allows us to measure if Gold is holding its value better than Silver or not. If the ratio falls, then the price of Silver is advancing faster than the price of Gold. If the ratio rises, then the price of Gold is advancing faster than the price of Silver. Right now, the Gold/Silver ratio is above 0.80 – well above a historically normal level, which is usually closer to 0.64. I believe the current ratio level suggests both Gold and Silver are poised for a fairly big upward price trend in 2022 and beyond. This may become an exaggerated upward price trend if the global market deleveraging and revaluation events rattle the markets in early 2022. Sign up for my free trading newsletter so you don't miss the next opportunity! I expect to see the Gold/Silver ratio fall to levels below 0.75 before July/August 2022 as both Gold and Silver begin to move higher in Q1:2022. Some event will likely shake investor confidence in early 2022, causing precious metals to move 15% to 25% higher initially. After that initial move is complete, further fallout related to the deleveraging throughout the globe, post-COVID, may prompt an even bigger move in metals later on in 2022 and into 2023. COVID Disrupted The 8~9 Year Appreciation/Depreciation Cycle Trends In May 2021, I published an article suggesting the US Dollar may slip below 90 while the US and global markets shift into a Deflationary cycle that lasts until 2028~29 (Source: The Technical Traders). I still believe the markets will enter this longer-term cycle and shift away from the broad reflation trade that has taken place over the past 24+ months – it is just a matter of time. If my research is correct, the disruption created by the COVID virus may result in a violent reversion event that could alter how the global markets react to the deleveraging and revaluation process that is likely to take place. I suggest the COVID virus event may have disrupted global market trends because the excess capital poured into the global markets prompted a very strong rise in price levels throughout the world in real estate, commodities, food, technology, and many other everyday products. The opposite type of trend would have likely happened if the COVID event had taken place without the excessive capital deployed into the global markets. Demand would have diminished. Price levels would have fallen. Demand for commodities and other technology would have fallen too. That didn't happen. The opposite type of global market trend took place, and prices rose faster than anyone expected. Markets Tend To Revert After Extreme Events As much as we may want to see these trends continue forever, any trader knows that markets tend to revert after extreme market trends or events. In fact, there are a whole set of traders that focus on these “reversion events.” They wait for extreme events to occur, then attempt to trade the “reversion to a mean” event in price action. My research suggests the COVID virus event may have created a hyper-cycle event between early 2020 and December 2021 (roughly 24 months). My research also suggests a global market deleveraging/revaluation event may be starting in early 2022. If my research is correct, the recent lows in Gold and Silver will continue to be tested in early 2022, but Gold and Silver will start to move much higher as fear and concern start to rattle the markets. As asset prices revert and continue to search for proper valuation levels, Gold and Silver may continue to rally in various phases through 2028~2030. Initially, I expect a 50% to 60% rally in Silver, targeting the $33.50 to $36.00 price level. For SILJ, Junior Silver Miners, I expect an initial move above $20 (representing a 60%+ rally), followed by a follow-through rally targeting the $25.00 level (more than 215% from recent lows). I believe the lack of focus on precious metals over the past 12+ months may have created a very unusual and efficient dislocation in the price for Silver compared to Gold. This setup may present very real opportunities for Silver to rally much faster than Gold over the next 24+ months – possibly longer. If my research is correct, the Junior Silver Miners ETF, SILJ, presents a very good opportunity for profits. Want to learn more about the movements of Gold, Silver, and their Miners? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Pay particular attention to what is quickly becoming my favorite strategy for income, growth, and retirement - The Technical Index & Bond Trader. Have a great day!

Warsaw, 15.12.2021 Several companies on our market are already developing their dark store networks, which allow for the delivery of food products within a dozen or so minutes from the order, and new shopping platforms announce their entry onto the Polish market. Things are getting very competitive in the quick commerce segment Quick commerce, which is a segment of express deliveries of basic food products, beverages, sweets, household chemicals and cosmetics, is a format that is now enjoying popularity, both in our country and around the world. Dark stores, distribution microcenters used only to handle orders placed on-line, already operate in the seven largest cities in our country. Due to the limited selection, covering from 1000 to 2000 products, they can’t compete with large retail chains and standard on-line shops offering a huge range of goods. However, they constitute direct competition to small local stores intended for quick, spontaneous shopping to meet the immediate needs. Even so, competition is difficult here due to the narrow range of products. - The development of this form of retail, which guarantees instant deliveries to the customer, favors the strong trend of convenience, related to the expectation of comfortable and easy access to goods. This trend became even more popular during the lockdown. The formula for deliveries within 10-15 minutes, however, requires the creation of a network of properly profiled distribution facilities scattered throughout the city. Dark stores resemble supermarkets measuring several hundred meters, usually from 200 sq m. up to 400 sq m, which are arranged in such a way that the individuals completing the order can efficiently move between the shelves and collect the products in the shortest possible time. They resemble shops, but act as warehouses for storing goods - explains Piotr Szymonski, Director Office Agency at Walter Herz. Free delivery up to 2:00 am Q-commerce on a larger scale began to develop in Poland only this year. The service is popular with a large group of customers. Dark stores offer goods at prices similar to traditional retail outlets. Orders are delivered 7 days a week, also on non-trading Sundays. Lisek, operating in Warsaw, Cracow, Wroclaw, Gdansk, Poznan and Katowice, ensures delivery up to 10 minutes. Completely free delivery is available at JOKR. At Jush, orders over PLN 35 get delivery free of charge. Recent months have brought not only a rapid development of this format in Poland, but also announcements of new large players entering our market. From week to week, companies operating in this segment are expanding their range of activities, providing their service to further city districts. Meanwhile, the express delivery market is already getting crowded. Dark store chains of the first platforms that appeared in Poland, such as Lisek, Jokr, and GetnowX, are growing. The number of Biedronka's distribution points for the Biedronka Express BIEK service, which from this October is being offered in collaboration with Glovo, is growing at a fast pace. This is the second platform that, just like the Lisek App, also functions outside the capital. Deliveries from dark stores scattered in Warsaw, Lodz, Cracow, Gdansk, Poznan and Wroclaw are made within a 2 km radius in a quarter of an hour. Distribution microcenters work throughout the week from 8am to 11pm, and in Warsaw on Fridays and Saturdays even until 2 am. Zabka Future Group chose the Lite E-Commerce start-up, which aims to create new modern convenience solutions. The company has recently decided to launch dark stores and fast food deliveries via the Jush app. This October, Zabka Jush launched in Warsaw. They also plan expansion into the other cities. New purchasing platforms are getting ready to take off in Poland Although the Swyft platform has temporarily suspended its operations after six months, the companies present on our market will soon gain considerable competition. Such companies as Gorillas and Grovy have announced their debuts in Poland. Gorillas, a German start-up specializing in instant deliveries from its own stores-warehouses, forms a project management team in our country. The company, with value that exceeding USD 1 billion just a few months after its establishment, is expanding in Europe. It operates in 15 cities in Germany, as well as in the Netherlands, Great Britain, France, Italy and Belgium. It also made its debut in New York, which will become a hub for the development of the network in the United States. Grovy is also getting ready to enter the Polish market. The platform has already been offering services in the largest cities in Germany and Romania. Now the start-up plans to enter the Polish, Czech and Hungarian markets. Glovo and Wolt specialize in deliveries from various stores. On our market, Glovo cooperates with Biedronka, and in its native Spain, Italy, Portugal, Romania and Ukraine, it operates on the basis of its own distribution facilities. Wolt, on the other hand, wants to launch its Wolt Market, a network of independent virtual supermarkets, in Poland, as it has in the Czech Republic, Denmark and Hungary. Wolt Market is intended to operate only as a dark store and fulfill online orders placed via the Wolt app. The company has launched their first virtual stores in Finland and Greece. One of the first Wolt Market stores also operates in the center of Warsaw. The market is open from 8 am to 11 pm, 7 days a week, and orders over PLN 150 are delivered free of charge within a 1.5 km radius. Soon, Bolt's dark stores are to open in Warsaw. Bolt is another company to offer delivery of goods purchased online within 15 minutes of placing the order. So far, the premiere Bolt Market has been launched only in Tallinn, the capital of Estonia. Pyszne.pl, belonging to the Dutch group Just Eat Takeaway, is also considering extending its services to delivering groceries. However, they do not plan to create their own network of dark stores, but to cooperate with the other stores. Dark stores not in every location - Creating a network of distribution microcenters is a big challenge. The facilities must meet the appropriate location conditions that allow for the rapid shipping of goods. They have to enable express completion of the order from its submission to delivery to the customer's door. Developers of dark stores are looking for space located next to large residential areas in most districts of Warsaw, also in those more distant from the center and in other large cities. They are located not only in commercial buildings, but also on the ground floors of office buildings. The format's potential is best demonstrated by the interest shown by many companies that plan to implement projects on our market - says Piotr SzymoÅ„ski. - The selection of location for dark stores should be based on an analysis of the range and availability of the location, as well as the demographic and transportation aspect. Prospective regions for distribution networks are also those city areas where the implementation of a large number of residential projects is scheduled in the near future. Of course, the technical aspects of the premises should also be taken into account, such as the load-bearing capacity of the ceiling or the ability to charge electric vehicles, which are often used by couriers - adds Piotr SzymoÅ„ski. Market analysis concludes that the constantly growing popularity of online purchases will mean that by 2026, in just 6 years, the value of online sales in Poland will double. Forecasts indicate that the e-commerce sector is facing a period of regular growth. There is still a lot of space for the development of e-commerce in our country. The segment will increase its market share, not only by disseminating new sales formats, but also by increasing the number of online stores operating in our country. In Poland, there are even several times less of them per 1000 inhabitants, compared to some EU countries. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

More expensive offices in Warsaw, is it possible in a pandemic? - There are over 370 thousand sq m. of office space under construction in Warsaw. They are to be commissioned in the period between 2021 and 2024. This is less than half of the offices built in the recent years, before 2020. The Warsaw market slowed down significantly. Moreover, the level of new office construction is at a record low, while more than twice as much office space is being built on the regional markets. It should not be expected that this will change in the next 2-3 years. Developers have not been announcing the implementation of new projects - says Mateusz Strzelecki, Partner / Head of Regional Markets w Walter Herz. – According to our estimates, in 2021 in total almost 340 thousand sq m. of offices will be completed. In 2022, if the deadlines are met, the office resources in Warsaw have a chance to increase by just over 220 thousand sq m. of space. In the years 2023-2024, the first stage of Studio project by Skanska and The Bridge investment by Ghelamco are to be commissioned. They are among the few investments that investors have decided to build this year – adds Mateusz Strzelecki. Meanwhile, as Mateusz Strzelecki points out, in recent months we have been able to observe the resurgence of tenant activity, which in the third quarter of this year, resulted in a one third higher lease volume than in the same period last year. - This bodes well for the Warsaw market, the future of which looks bright. What is more, there is a noticeable increase in interest in renting by companies from the modern business services sector and those operating in the modern technology segment. The decisions of most companies to lease larger space than previously occupied are also a good prognosis. Only every tenth tenant has decided to reduce space this year - says Mateusz Strzelecki. The expert notes that if the demand continues in an upward trend, and developers continue to withhold further projects in the next two years, we can expect not only a decrease in the level of office vacancies in Warsaw, but also an increase in market rates. – In the upcoming quarters, we may have to deal with an increase in prices of flexible space operators due to their current high occupancy - adds Mateusz Strzelecki. Today, the Warsaw market offers 6.16 million sq m. of modern office space. As a result of its pre-pandemic, rapid growth, modern office buildings are now being completed. This year, over a dozen investments have been commissioned, including Warsaw Unit by Ghelamco (59 thousand sq m.), Skyliner by Karimpol (48,9 thousand sq m.), Generation Park Y by Skanska (47,6 thousand sq m.), Galwan and Plater office buildings in Fabryka Norblina belonging to Capital Park Group (40 thousand sq m.) as well as Widok Towers by Commerz Real and S+B Gruppe (28,6 thousand sq m.). Over 12 per cent of offices are awaiting tenants in Warsaw. The vacancy rate increased by less than 3 percent during this year. Noteworthy, however, is the high level of commercialization of modern facilities that entered the market. According to Walter Herz, three-quarters of space in the office buildings is secured with pre-let contracts, which indicates a high demand for work space of the highest standard. Companies are making decisions more and more boldly, as evidenced by the overwhelming share of new contracts in the total lease volume. In addition, as much as 60 per cent of space contracted in Warsaw in the first three quarters of this year, has been leased in buildings located in the very center of the city, which hosts top-class office buildings. This goes hand in hand with the increase in the social function of offices. Despite the consolidation of new work models, the offices retained the status of the central place of management. After a year and a half of experience with remote work, employers opt for a traditional, stationary model of work. It turned out that working in teams and exchanging knowledge between people is much more effective in direct contact than in a remote system. In addition, the office is irreplaceable when it comes to building relationships and community, as well as a sense of belonging to the team. In order to convince employees to return to their offices, companies must, however, remodel the space so that it provides the greatest possible comfort, friendly atmosphere and diversity, and is more flexible. The analysis shows that Warsaw offices are now about 40-50 per cent full. The next months will bring further changes in the way of using the workspace. Certainly, the is a visible trend to limit permanent workstations, so that one can use the entire office freely and stay in constant contact with other people. It will also become very important to use digital solutions to increase efficiency and support the well-being of employees. The key will be, among others, using appropriate applications and creating special zones dedicated to remote communication, which will guarantee high-quality, stable connection. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

SAVILLS: PROPERTY MARKET HAS ADJUSTED TO THE NEW REALITY AND REGAINS MOMENTUM 14 December 2021 Real estate advisory firm Savills presents a preliminary summary of 2021 and predicts trends for the coming months. The commercial real estate market in Poland is regaining momentum but has changed significantly, reveals Savills. Key trends expected to dominate in the year ahead include rental growth, increasing ESG awareness and a focus on innovation. As expected, the vaccine roll-out has had a positive impact on the commercial property market in 2021. With investors remaining active, this year’s investment is likely to hit EUR 5 billion. Savills expects recent investment trends to continue and industrial assets to account for close to half of the total transaction volume by the end of the year. “Although the real estate market has undoubtedly bounced back in 2021, it has remained mired in uncertainty. In addition to concerns about the course of the pandemic, there were also geopolitical and economic risks. This did not however prevent tenants and investors from gradually resuming activity. Key metrics for the past 12 months illustrating investment volumes and office take-up are likely to remain close to last year’s levels amid a positive outlook for the future. A bright exception is the warehouse sector, which - undeterred by the pandemic - is already setting new highs. The commercial real estate market has adjusted to the new reality and is beginning to return to form,” says Tomasz Buras, CEO, Savills Poland. 2021 was the year of searching for an optimal work model on the office market. Many tenants decided to introduce a permanent hybrid scheme combining in-office work and working from home. According to Savills data, Poland’s total office stock topped 12,315,000 sq m. Flexible offices continued to gain traction with flexible office providers shifting their focus to expansion in regional cities. The Build-to-Rent (multifamily) sector is gradually gaining ground on the Polish market. According to Savills, at the end of 2021 there were close to 40 BtR developments in Poland. Projects that are currently under construction will soon double the stock of rental apartments. As high-tech and e-commerce companies continue to enjoy brisk expansion, these sectors are seeing their headcount grow. According to Savills, even though this has not translated directly into more demand for offices yet, there will be a growing requirement for modern housing as the trend of hybrid working intensifies. The online penetration rate (share of total retail sales) has risen from around 5% pre-pandemic to close to 9% in 2021. The development of omnichannel strategies combining online and offline shopping has gathered pace. The growth of e-commerce remains one of the key drivers of demand for logistics space. Retail has also seen the rise of dark stores - small in-town distribution centres helping shorten delivery times. In 2021, this format was launched in Poland, among others, by Å»abka. Such platforms are also operated by Lisek, Jokr and Swyft, while Biedronka has teamed up with Glovo. According to Savills, 2022 is expected to see another spike in construction costs and land prices, as well as an upward pressure on wages amid a risk of rising inflation. This will, first of all, push service charges up. Tenants will also be affected by exchange rate differences as euro-denominated rents remain a market standard. In addition, 2022 is likely to be the first year in many to witness warehouse and office rental rates go up. “There is potential for the investment market to see more buying in 2022. Investor demand for industrial assets will remain strong while the PRS will increase its market share. Several spectacular office projects are likely to change hands. Next year’s investment volume is expected to come close to pre-pandemic levels. Commercial real estate is considered a safe haven in times of high volatility on currency, stock exchange and bond markets, driving investor activity,” adds Tomasz Buras, Savills Poland. Next year is also shaping up to be a time when ESG strategies will begin to gain prominence on the real estate market. The importance of ESG is rising as a result of the European Union’s taxonomy, or the change of regulations on non-financial sustainability reporting and the entry into force of the CSRD, as well as tenants’ preferences. ESG is not only about a concern for the environment, but also for the human being. According to Savills, this will be visible on the warehouse market, where developers wanting to stand out will also begin to focus on the second social pillar of ESG, i.e. the human aspect, in addition to investing in energy efficiency. On the office market there will be marked differences between ESG compliant buildings and those whose owners will fail to take action in this period of change. Today, both older office buildings and properties in non-central locations are faced with refinancing challenges. Prospective buyers are, however, beginning to look for existing buildings with an intention to upgrade or sometimes repurpose them, or even to pull them down. This is true not only for office assets. Warehouse developers have also become keener to engage in brownfield projects in order to secure good locations. A dichotomy or division of properties into buildings that may soon have to be repurposed for lack of other options and those that have been upgraded will become visible for example in Warsaw’s SÅ‚użewiec district. Office buildings in that area meeting high standards will be able to attract cost-sensitive tenants with an opportunity to bring rents down. Such buildings may, therefore, become the big winners of the pandemic, says Savills. In 2022, the Warsaw office market is likely to begin to slowly switch to a landlord’s market. The office development pipeline is currently at its lowest in 10 years. Savills forecasts that as office buildings whose construction began before the pandemic are gradually filling up with tenants, the second half of the year may see the first signs of an undersupply and landlords gaining the upper hand in negotiations. This trend is already apparent in prime office buildings in Warsaw. Another top trend for 2022 according to Savills is innovation comprising the implementation of new technologies in real estate (proptech) and the use of big data in property management. The drive towards more automation is expected in manufacturing facilities, office buildings and autonomous retail stores. Looking ahead, modern data analytics tools will be used for a growing number of tasks in property management and valuation.

As 2021 closes, it’s time to consider how sector themes in the markets are likely to perform in 2022. Years like 2021 saw a solid broad-based performance in many stock market sectors. Relatively simple approaches such as Indexing and Sector Rotation did well. But with macro changes in play and many uncertainties for 2022, we may very well see broad indexes underperforming while individual sectors dominated by a few stocks really shine. Dips will continue to be bought unless something significant changes. But let’s not forget that we’re long overdue for a substantial correction. Significant risk catalysts are:Fed actions.International conflicts (i.e., Russia and China).Pandemic developments that are not currently known.There’s always the risk of the unknown – the literal definition of a “Black Swan” event. We shouldn’t get too complacent, knowing that we may need to get defensive to protect capital suddenly. When it’s time to be defensive, let’s not forget that CASH IS A POSITION!sector theme DRIVERS FOR 2022Many uncertainties about Covid and the lingering effects on the economy remain. Inflation has roared back to 30-year highs. Strong employment numbers and consumer spending are fueling significant growth in corporate earnings. We also have a shift in bias at the Fed on interest rates and quantitative easing. These are the “knowns” and are theoretically priced in.For these reasons and more, we should expect more of a “Stockpicker’s Market” in 2022. Certain sectors will do well and weather corrections better than the broader markets.Sign up for my free trading newsletter so you don’t miss the next opportunity! Even short-term traders can gain an edge by paying attention to what sectors are strongest. Traders tend to benefit most from playing the strongest stocks in the strongest sectors for bullish trades and choosing the weakest stocks in weaker sectors for bearish trades. That “tailwind” can make a significant difference in results.Let’s look at some sector themes and individual names to keep an eye on in 2022.ECONOMIC NORMALIZATIONA long-anticipated return to a “normal” economy will continue to be a theme -- we just don’t know if that will be Post-Covid or Co-Covid. Or when. Air travel, theme parks, hotels, cruise lines, etc., have all suffered in the persistent Pandemic. What does seem to be changing is the idea of a “new normal” where virus variants may be with us for years to come. We will adjust socially and economically to that for the foreseeable future. DAL, UAL, LUV, AAL are airlines to watch, and the JETS ETF may be a good way to play a general recovery in this sector.5G INTERNETThe much-hyped rollout of 5G network technology had its share of setbacks and technology disappointments. But 2022 should see the 5G deployment start to take off as technical issues are worked out, and the promise of widespread coverage with transformational performance becomes real. In the background supplying the 5G infrastructure are AMD, QCOM, ADI, MRVL, AMT, XLNX, and KEYS. Along with infrastructure and testing companies, shares of major carriers T, TMUS, and VZ languished for much of the second half of 2021 and looked poised for recovery in the coming year.ARTIFICIAL INTELLIGENCEIn all its various forms (including autonomous vehicles), AI will remain a developing trend. Big players in the space to watch include MSFT, AMAT, GOOGL, NVDA, AAPL, and QCOM. EVs and AUTONOMOUS VEHICLESElectric Vehicles (EVs) are nearing an inflection point where widespread adoption is poised to take off. Technology and cost competitiveness has improved where some EVs will reach price parity with their traditional internal combustion counterparts.While there are many smaller players in the EV space, automotive stalwarts F, GM, and TM are investing very heavily. TSLA has been grabbing the headlines, but many others want to stake out their territory in the space, including whole tiers of manufacturers and infrastructure enablers like WKHS, XPEV, NKLA, and CHPT.MATERIALS and MININGGold, silver, and related miners underperformed for much of 2021 and now look poised for a recovery year as inflation, and monetary concerns grow. GLD, SLV, GDX, GDXJ, SIL, SILJ look good as both longer and mid-term plays. Metals and miners may get hit initially with a significant downturn in stocks but could ultimately demonstrate their safe-haven potential. Specific to the growth in EVs, battery technology, etc., copper, lithium, and related basic materials should see stronger demand ahead. FCX looks particularly interesting as a dual play on gold and copper. LIT may be a good ETF play on lithium battery technology.SEMICONDUCTORSThe market for chips is primed for exponential growth. EV’s have about ten times the number of specialty semiconductors as conventional vehicles. AI, crypto, 5G, mobile devices, and ubiquitous computing should drive growth in the semiconductor sector for some time to come.REAL ESTATEReal Estate and Homebuilders should continue to do well while employment numbers remain strong and if interest rates don’t rise too quickly. The inventory shortage in most real estate markets will likely persist well into the new year.Storage REITs like PSA, LSI, and CUBE have been big winners in the Covid economy and still have room to run.SUMMARYMany sectors still look bullish after gains in 2021. But there are “storm clouds” on the horizon, and we must not take future performance for granted.Lastly, one of the simplest ways to assess how sectors are measuring up is to watch the charts for the S&P SPDR series sector ETFs and a few others. Here are some notable ones to watch:These can give us a good starting place to look for leading stocks in winning sectors as the year unfolds.Let’s remain vigilant for possible market corrections and may the wind be at our backs!Want to learn more about our Options Trading Service?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to check it out, click here: TheTechnicalTraders.com.Enjoy your day!

Near November 24, 2021, I published a research article suggesting the Financial Sector, XLF in particular, may bottom and start to move higher, targeting the $43.60 level. After watching XLF rotate lower and form multiple bottoms near $37.50, it appears to finally be starting a new breakout rally phase ahead of Q4:2021 earnings. Will it rally up to my $43.60 target level before the end of January 2022? And how far could it rally beyond my $43.60 target?Using a simple Fibonacci Price Extension allowed me to target the $43.60 level. Duplicating that range and applying it to the top of the $43.60 target level will enable me to see a higher target range of $49.55. This upper target level would result from a 200% Fibonacci price rally from the original price range I identified back in late November 2021.Could it happen? Sure, it could happen. Financials are uniquely positioned to benefit from higher consumer engagement in almost all levels of the economy. Housing, consumer spending, credit/loan origination, fees and services, trading, and other services – they all combine into Banking and Financial Services. I expect Q4:2021 to show robust consumer engagement and housing data, likely prompting many financial firms' strong revenues/earnings results.My original financial sector (xlf) research article included (below) for you to review:The recent downward price rotation in the Financial Sector (XLF) may have frightened some traders, but my research suggests this move is setting up a future bullish price target near $43.60 – a more than +11% move. The end of the year Christmas Rally phase of the markets should drive spending and Q4:2021 expectations strongly into the first quarter of 2022. Unless something big breaks this market trend, traders should continue to expect a “melt-up” bullish price trend through at least early January 2022.Sign up for my free trading newsletter so you don’t miss the next opportunity!The Financial Sector continues to deliver strong earnings and revenue data each quarter. The way consumers and assets prices have reacted after the COVID market collapse says quite a bit about the ability of financial firms to generate future profits. Financial firms actively engage in financial services, traditional banking, real estate, and other investments, and corporate financing. The rising inflation trends and consumer spending activities suggest the US economy is still rallying after the COVID stimulus and recovery.Financials May Rally 10% to 15%, or more, by January 2022My analysis of XLF suggests this recent pullback in price may stall and start a new bullish price rally targeting the $43.60 level – a full 100% Fibonacci Price Extension of the last rally in XLF.This Daily XLF chart shows the extended rally in early 2021 and the brief pause in the price rally between June 2021 and early September 2021. Now that we've entered Q4:2021 and the US economy appears to be strengthening in the post-COVID recovery, my expectations are that most sectors, and the US major indexes, will rally throughout the end of 2021 and into early 2022.This recent pullback in XLF sets up a solid buying opportunity for traders targeting a +10% rally that may last well into January/February 2022 – or longer.Longer-term Financial Trends Suggest Another Rally Above $44 May Start SoonOver the past 6+ months, moderate rally phases in XLF have shown a range of about $4.00 to $4.50. I've highlighted two recent rally phases in XLF on this longer-term XLF Daily chart below with gold rectangles. I believe the next rally from the recent pullback will be similar in size and prompt a moderate upward price move targeting the $43.60 level – or higher.Although there are some concerns related to the continuing recovery in the US markets, I believe the momentum of the US recovery and the strength in the US Dollar will push many US sectors higher over the next 60+ days. Closing out Q4:2021 and starting Q1:2022 with a fairly strong rally that may surprise many traders.The Financial sector is likely to present very strong Q4:2021 revenues and earnings data as long as the global markets don't push some crisis event or other issue that could detract from the US economic recovery. Right now, the biggest issues seem to be China and Europe.Concluding thoughtsMy opinion is that any moderate price weakness in the Financial sector will be short-lived and will resolve into a bullish price rally, or "melt-upward" type of trend, as we move into early December 2021. Once the US Debt Ceiling issue is resolved, I believe the Financial sector will begin a very strong rally pushing prices above $44 or $45 as Q4:2021 earnings expectations drive investors' focus into Technology, Consumer Retail, Financials, and Real Estate.The strength of the US Dollar is driving large amounts of capital into US assets and stocks right now. Based on my research, it is very likely that the US major indexes and certain sectors will continue to rally into early January 2022. If my analysis proves accurate, we may see a +11% to +18% rally in XLF before the end of January.If you are interested in learning more about how my strategies can help you protect and grow your wealth in any type of market condition, I invite you to visit www.TheTechnicalTraders.com 

S&P 500 indecisiveness Thursday gave way to another down day, and it doesn‘t look to be over in the least. Tech still isn‘t catching breadth enough – and that was my key condition of declaring a reprieve in the selling, if not a turnaround. Likewise credit markets don‘t offer optimistic signs – it‘s still risk-off there, and the sharp rise in yields is putting inordinate pressure on many a tech stock. True, the behemoths aren‘t that much affected, but even a glance at semiconductors tells you that the rot is running deeper than apparent from $NYFANG. This is part of the flight from growth into value, which we will see more of in 2022. The same for still unpleasantly high inflation which won‘t be tamed by the hawkish Fed – not even if they really allow notes and bonds to mature without reinvesting the proceeds already in Mar. The train has left the station more than 6 or 9 months ago when they were pushing the transitory thesis I had been disputing. We have truly moved into the persistently high inflation paradigm, and it would be accompanied by wage inflation and strong precious metals and commodities runs. We‘re looking at very good year in gold and silver while the turbulence in stocks is just starting, and we have quite a few percent more to go on the downside. Oil and copper are set up for great gains too. This will be a year when monetary and fiscal policy work at odds, when they contradict each other. Inflation would catch up with the economic growth in that inflation-induced economic slowdown would be a 2022 surprise. Signs of real estate softening would also appear – it‘s all about housing starts. While rates would rise (2.00% in 10-year Treasury is perfectly achievable), it won‘t catch up with inflation in the least – hello some more negative rates, and financial repression driving real assets. Rhymes perfectly with the 1970s. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook No real floor has materialized in either S&P 500 or tech. Volume didn‘t rise, the buyers aren‘t yet interested – we have to get at more oversold levels. Credit Markets HYG didn‘t build on Thursday‘s advance one iota, and still looks to me melting down. While the 10-year closed at 1.76%, we aren‘t looking at such sharp bond ETF downswings – and the degree in which tech reacts next, would be telling. Gold, Silver and Miners Gold and silver staged an orderly recovery, still tiptoeing around the hawkish Fed, whose tightening cycle would turn out shorter than they think. And sniffing that out, would be the turning point in the metals. Crude Oil Crude oil bulls took a daily pause, but expect it to be short-lived. We‘re looking at triple digit oil not too many months away. Copper Copper pared back Thursday‘s setback, and definitely isn‘t overheated. The sideways consolidation that would be resolved to the upside, continues – the bears are fighting a losing battle. Bitcoin and Ethereum Bitcoin and Ethereum continue trading on a weak note, and the sellers are likely to return soon. This certainly doesn‘t look like a good time to buy. Summary S&P 500 still hasn‘t turned, and I‘m looking for more weakness – tech continues leading to the downside, and bond reprieve hasn‘t yet arrived. Anyway, it‘s questionable how fast tech would react – value can‘t keep S&P 500 afloat by itself. The realization of the hawkish Fed is here as much as the jobs data not standing in their tightening plans (wage pressures are here as quite a lot of vacancies remains unfilled – hello, full employment) – and assets are reacting. As I have stated in the 2nd and 3rd paragraphs of today‘s big picture analysis (investors would appreciate thoroughly), we‘re in for a challenging year in stocks, a great one in precious metals and most commodities – and definitely in for turbulence arriving, pulled over into 1H 2022 courtesy of the Fed. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

S&P 500 reversed sharp intraday losses, and credit markets moved in a decisive daily risk-on fashion. Turnarounds anywhere you look – HYG, TLT, XLK… but will that last? VIX having closed where it opened, points to still some unfinished job on the upside, meaning the bears would return shortly – but given how fast they gave up the great run yesterday, I‘m not looking for them to make too much progress too soon. Good to have taken yesterday‘s short profits off the table. Assessing the charts, it‘s great (for the bulls) that tech liked the long-dated Treasuries reversal to such a degree – and that value closed little changed on the day (its candle is certainly ominously looking). As a result, we‘re looking at a budding reversal that can still go both ways, and revisit 4,650s in the bearish case at least. Remember that tech apart from $NYFANG lagged, and financials aren‘t yet broken either, meaning that the credit market upswing better be taken with a pinch of salt. True, rates have risen fast since the New Year, and the pace of yield increases has to moderate. I‘m of the opinion that yesterday‘s good Nasdaq showing hasn‘t yet turned tech bullish, and that we still face a move lower ahead. As written yesterday: (…) This is part of the flight from growth into value, which we will see more of in 2022. The same for still unpleasantly high inflation which won‘t be tamed by the hawkish Fed – not even if they really allow notes and bonds to mature without reinvesting the proceeds already in Mar. The train has left the station more than 6 or 9 months ago when they were pushing the transitory thesis I had been disputing. We have truly moved into the persistently high inflation paradigm, and it would be accompanied by wage inflation and strong precious metals and commodities runs. We‘re looking at very good year in gold and silver while the turbulence in stocks is just starting, and we have quite a few percent more to go on the downside. Oil and copper are set up for great gains too. This will be a year when monetary and fiscal policy work at odds, when they contradict each other. Inflation would catch up with the economic growth in that inflation-induced economic slowdown would be a 2022 surprise. Signs of real estate softening would also appear – it‘s all about housing starts. While rates would rise (2.00% in 10-year Treasury is perfectly achievable), it won‘t catch up with inflation in the least – hello some more negative rates, and financial repression driving real assets. Rhymes perfectly with the 1970s. Stocks aren‘t yet out of the woods, the yesterday opened oil position is already profitable, cryptos likewise maintain a gainful slant to the Sunday-opened short – meanwhile, precious metals are once again catching breadth to rise, and the same goes for copper. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The bid arrived, and the bottom may or may not be in – in spite of the beautiful lower knot, I‘m leaning towards the hypothesis that there would be another selling wave. Credit Markets HYG reversal looks certainly more credible than the S&P 500 one. LQD though didn‘t rise, which is a little surprising – on the other hand though, that‘s part of the risk-on posture, which would have been made clearer by LQD upswing. Gold, Silver and Miners Gold and silver position is improving, and I like the miners coming alive. The stage is set for upswing continuation till we break out of the very long consolidation. Crude Oil Crude oil looks to have declined as much as it could in the short run – I‘m looking for another run to take out $80 – see how little ground oil stocks lost? Copper Copper didn‘t outshine, didn‘t disappoint – its long sideways move continues, the red metal remains well bid, and would play catch up to the other commodities – the bears aren‘t likely to enjoy much success over the coming months. Bitcoin and Ethereum Just as I wrote yesterday, Bitcoin and Ethereum continue trading on a weak note, and the sellers are likely to return soon. This certainly doesn‘t look like a good time to buy. Summary S&P 500 turnaround has a question mark on it – one that I‘m more inclined to think would lead to further selling than a run above 4,720. The tech and bonds progress would be challenged again – we‘re still way too early in the Fed tightening cycle when the headwinds are only becoming to be appreciated. The room for negative surprises and kneejerk reactions is still there (the job market isn‘t standing really in the Fed‘s way), and it would likely take stocks (and cryptos) down while being less of an issue for real assets – be it commodities or precious metals. Wage pressures and unfilled vacancies are likely to last, meaning the inflation would be persistent – the staglationary era coupled with inflation-induced economic slowdown surprise I mentioned yesterday, awaits. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

PRESS RELEASE Warsaw, 11.01.2021 Commercial real estate market in Poland has come a long way since the spring of 2020. Never before have so many changes been made in such a short time. Adaptation to new conditions turned out to be the most difficult for hotels and retail. For the warehouse market, in turn, the reshuffling of sales and deliveries became a springboard for a series of records. The offices returned in a new form. Nowadays, the new trends that will shape the market in the upcoming years, lead the way for the real estate sector. Experts from Walter Herz consulting company comment on what is changing. Offices in demand - Despite the popularization of home office and the hybrid work system, we cannot speak of a revolution on the office market. The situation in the sector is quite stable. However, the way the space is used is changing. Tenants decide to extend contracts and change the arrangement of space, adapting it to the needs of employees in the new market environment. Some companies reduce space and maximize its use. Co-working is trending. Companies create more space for team work, integration and meetings - informs Mateusz Strzelecki, Partner / Head of Regional Markets at Walter Herz. Mateusz Strzelecki expects an explosion of relocation to flexible offices this year. - This tendency was already visible last year, but we expect an increase in the activity of companies this year. This is due to the fact that nowadays, tenants need more time to decide on the new office, even a year or a year and a half - admits Mateusz Strzelecki. Mateusz Strzelecki also points to a positive symptom visible on the market related to the return of foreign companies that have been actively looking for locations for their headquarters in our country since autumn last year. Strzelecki also speaks of the great boom seen on the flex space market segment. - Tenants now prefer shorter, flexible contracts with different options of space. Hence, the growing demand for instant offices and co-working spaces is growing. They offer a full range of services and short lease terms, which attracts tenants. They are most often complementary to traditional spaces. The resources of flexible space are growing rapidly and are already provided by the majority of the most modern facilities. In 2022, the potential of this segment will increase – predicts Mateusz Strzelecki. Frozen projects However, Mateusz Strzelecki no longer speaks of an increase in the resources of traditional office space on the market with such great optimism - The amount of space under construction, especially on the Warsaw market, is the lowest in a decade and there are no signs that this will change in the near future. The situation is better on the regional markets, while in Warsaw most of the large office investments have already been completed, and the remaining construction projects are nearly finished. Almost half of the space in the projects under construction already has tenants. Over time, the free space will shrink and the market offer will become smaller. There is a supply gap on the horizon in the next two years, as only a small number of projects is under implementation. Low supply with higher expected demand may translate into optimization of lease terms on the part of building owners, and even an increase in rental rates in the best buildings in central locations, which are currently the most popular. Increasingly higher utility prices will, in turn, affect the increase in service charges - notes Mateusz Strzelecki. - The growing construction costs related to high inflation and an increase in interest rates do not encourage investors to act. Prices for building materials, services, land and wages are rising. We can expect this trend to continue this year. Estimates show that the cost of delivering an office building to the market has increased by over 30 per cent, since the beginning of the pandemic. In addition, there are difficulties related to the timely delivery of materials - says Mateusz Strzelecki. Warehouse sector is hot BartÅ‚omiej Zagrodnik, Managing Partner/CEO of Walter Herz, points out that thanks to the large-scale office buildings that have been commissioned last year and which constitute attractive assets, this year's value of transactions on the investment market may reach the level seen in Poland before the pandemic. - In 2021, the transaction volume will probably be similar to the one recorded last year. The warehouse and industrial sector will account for almost a half of the total value. The demand for logistics real estate is breaking records not only on our market. In Poland, convenience-type facilities, retail parks and local daily service centers providing access to everyday goods are also gaining importance. Investors also appreciate more and more projects offering flats for institutional rental, student dormitories, retirement homes and nursing homes, which guarantee lasting capital security and an attractive level of return - informs BartÅ‚omiej Zagrodnik. - The pandemic has significantly boosted the development of the warehouse real estate market. A record amount of space is under construction all over the country. The historically high new supply is followed by an equally high demand, which was a third higher in the first three quarters of 2021 than in the corresponding period a year earlier. This is a trend that will continue also this year due to the further development of e-commerce and nearshoring, locating production closer to the outlet zone and striving to shorten the supply chain – explains BartÅ‚omiej Zagrodnik. New concepts BartÅ‚omiej Zagrodnik points out that more and more warehouses built in the new standard will enter the market. They will reach the height of 12 m. - Developers are also noticing great interest in last mile logistics facilities, located close to large urban agglomerations, and will implement more such projects. These types of facilities are particularly popular among distributors and delivery companies, which are associated with the boom in the e-commerce sector. This year, the dark store concept, which debuted on our market in 2021, will also be popularized in Poland. Networks of distribution microcenters, resembling shops, but created exclusively to handle online orders with express delivery in several minutes, will be expanded, which are already operating in the seven largest cities in the country – informs BartÅ‚omiej Zagrodnik. Walter Herz specialists agree that commercial investments in Poland have chosen the multiple functionality course. Among the projects prepared for construction, mixed-use complexes implemented in several stages predominate. The purpose of designing part of the investment is also to supplement the development with additional functions, as is the case with the office building in SÅ‚użewiec in Warsaw. - We could observe the implementation of investments with residential, commercial, service, entertainment and hotel functions in major cities in the country even before the pandemic. Now, such facilities have dominated the sphere of new investments. Projects built in line with sustainable development meet not only the expectations of today's investors, but also the needs of office users who appreciate the advantages of the local area even more, but expect a comprehensive offer - says Piotr SzymoÅ„ski, Director Office Agency at Walter Herz. - In Warsaw, the implementation of new, large-scale mixed-use investments is scheduled, among others, in the districts of Bielany and Å»eraÅ„. Complexes of this type will also be built in Kabaty and OkÄ™cie – says Piotr SzymoÅ„ski. More and more green - When outlining outstanding trends, it is impossible not to mention the ESG (Environmental, Social and Corporate Governance) standards, which are becoming an increasingly important criterion in assessing the value of commercial real estate. The building's efficiency, emissivity and the comfort it provides to its users, confirmed by certificates, have become a key issue for investors. The environmental aspect related to projects in the face of climate change is already as important as the financial profit and, in the context of EU directives, to a large extent influences business decisions. Sustainable investments achieve higher market valuations and are better rated by financial institutions - says Piotr SzymoÅ„ski. Piotr SzymoÅ„ski expects further, more and more detailed regulations on ESG. - We are observing an increasing desire to reduce operating costs and minimize the impact on the planet through the use of energy-saving solutions. Facilities that take into account the convenience of users are also more popular among tenants. Companies pay attention to how the space in which they work affects the natural environment. Some organizations only work with entities that represent similar standards in this field. Therefore, it can be expected that year to year there will be more "green" buildings on the market. We can also expect an increase in market competitiveness in this respect – adds Piotr SzymoÅ„ski. Aboout Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

PRESS RELEASE Warsaw, 17.01.2022 The growing interest in domestic tourism is conducive to the development of accommodation facilities in resorts. Interesting city hotels are also opening. The current year should bring stabilization in the hotel industry as more countries move from treating the covid as pandemic to endemic - Speaking of the current shape of the hotel sector, it is difficult to treat the market as a whole. Today we are dealing with two markets. The first of them - the city hotel market, considered safer before the pandemic, due to a more balanced structure of guests, as well as less seasonality than the second hotel market, that is tourist hotels. Currently, it is the latter market that is doing much better and is recovering from losses. City hotels, on the other hand, largely focus on maintaining the current profitability, however, in the fall, there was a recovery in demand from business guests and MICE. The results that the industry finished 2021 with are far from those before the market changes, but last year we could already see a recovery in demand and average prices on the market - says Katarzyna Tencza, Associate Director Investment & Hospitality at Walter Herz. Although there were fewer foreign guests, the hunger for travel and the uncertainty associated with overseas travel meant that in July and August last year, about 190 thousand more Poles stayed in hotels than in the summer of 2019. Demand accumulated in the summer as a result of, among others, the restrictions that hotels were subject to in the winter and spring months. The summer season in the resorts was very successful. The beginning of autumn in the resorts brought a sustained high demand for leisure and group stays. In November and December, the situation was clearly worse, with the exception of the holiday season, which was another opportunity for hotels in holiday destinations to increase revenues. - Good results obtained by resort facilities during the summer do not mean that the entire year 2021 can be considered successful by the industry. The turnover in the entire sector was lower than that achieved before the pandemic. The year 2022 should bring a continuation of the recovery in demand in the city markets - says Katarzyna Tencza. Ownership changes Despite the difficulties faced by hotels, so far we have not dealt with many transactions on our market. Especially that the largest market players mostly refrain from acquiring assets in this segment. The mass bankruptcies which were to happen in 2021, did not take place. Hotels for sale are not very attractive to investors due to location or other factors. The transactions took place mainly on regional markets. For example, NK Rysy company purchased Hotel Rysy, located in the very center of Zakopane. The unfinished Ewerdin hotel in Swinoujscie was also sold. In the second half of the year, a 100-room hotel located in the center of Cracow was also sold. We could also observe transactions concerning hotel facilities intended for other functions. Orbis has signed a preliminary agreement for the sale of the Ibis Hotel in Kielce, which is to be transformed into a different function facility. The deserted Astoria hotel in Klodzko was sold to a developer from Cracow, who after the renovation, will probably offer retail and service space. Polkomtel bought the Ossa hotel located in Ossa near Rawa Mazowiecka, in order to build a rehabilitation center. Polski Holding Hotelowy is also active on the market, which carries out the process of consolidation of facilities providing hotel services, owned by state-owned companies. PHH concluded a conditional agreement for the purchase of Geovita SA, part of the Polish Oil and Gas Mining Group, which manages several recreational facilities throughout Poland. The holding has also signed a conditional agreement with PGE Polska Grupa Energetyczna for the purchase of ten hotels and facilities belonging to Elbest, one of its companies that owns hotels, including in Krynica, MiÄ™dzyzdroje, Myczkowce nad Solina as well as facilities in Krasnobrod and Szklarska Poreba. Polski Holding Hotelowy has also signed conditional agreements for the purchase of a controlling stake in Interferie and shares in Interferie Medical SPA, companies belonging to the KGHM Group, thanks to which it will receive another six properties. New, high-class facilities in resorts In 2021, holiday resorts expanded their offer of high-quality hotel facilities. The recent openings are, of course, the result of investment processes initiated before the market turmoil. Tourist accommodation resources in the country increased, among others, thanks to the opening of the Radisson Resort hotel in Kolobrzeg with 209 rooms and an aquapark, the five-star Crystal Mountain hotel in WisÅ‚a with almost 500 rooms and an aquapark, and the 124-room Tremonti Ski&Bike Resort complex in Karpacz. Despite the difficulties, the hotel market continues to expand its resource base. New seaside hotel investments, as in previous years, are mostly located on the line between Swinoujscie and Kolobrzeg. Hotel investments in this region are mostly condo hotels. The largest projects include the Wave MiÄ™dzyzdroje Resort & SPA hotel with 393 suites, Aqua Resort in Miedzyzdroje with 300 rooms and an aquapark, 435-room Radisson Blu Resort in Miedzywodzie, Hotel GoÅ‚Ä™biewski in Pobierowo with approximately 1400 rooms, PINEA Resort & Apartments in Pobierowo with 138 apartments, 266-room Mövenpick in Kolobrzeg, Baltic Wave in Kolobrzeg which is to offer 468 suites. Polish mountains offer interesting hotel investments, also largely sold in the condo system, Among the most interesting projects are Elements Hotel & SPA in Swieradow Zdroj with 289 rooms, Sanssouci Karpacz MGallery Hotel Collection with 110 rooms, Movenpick in Karpacz with 126 rooms, Mövenpick Zakopane Imperial Hotel with 130 rooms, Infinity Zieleniec Ski & SPA in Duszniki Zdroj with 328 apartments, and Linden Hotel & Resort in Szklarska Poreba with 137 rooms. New city hotels - Hotel chains previously focused mainly on municipal investments, are now very active also in the holiday destinations. In addition, smaller regional cities are gaining in importance. Unfortunately, high prices of investment plots and fierce competition in the fight for land from investors developing apartments for rent and dormitories, as well as rising construction costs make it more and more difficult to budget for the new hotel projects. Banks are still very cautious about financing hotel investments - informs Katarzyna Tencza. The investment interest in the sector is mainly in tourist destinations, but urban locations can also offer visitors new, interesting facilities. Last year saw the opening of such facilities as the ibis Styles Kraków Centrum hotel with 259 rooms, NYX Hotel Warsaw of the Leonardo Hotels chain with 331 rooms, located in the Varso Place complex near the Warsaw Central Station, Tulip Residences Warsaw Targowa hotel with 110 units, and Mercure Katowice Centrum with 268 rooms. In addition, the 195-room Mercure Kraków Fabryczna City hotel appeared on the Cracow market, 300-room AC Hotel by Marriott Kraków and Courtyard by Marriott Szczecin City hotel was opened in the Posejdon complex in Szczecin. It offers134 rooms. In WrocÅ‚aw, guests were welcomed by the Jazz aparthotel with 62 rooms and Hotel Herbal with 66 rooms, and at the end of last year, Dwór Uphagena Arche Hotel GdaÅ„sk with 145 rooms was opened in Gdansk. The Olsztyn market welcomed the 105-room Hampton by Hilton Olsztyn hotel. This year, the city hotel market will be supplied with a dozen or so new facilities under the brands of international and Polish brands. Most of them are hotels for which investment decisions were made before the pandemic. The Warsaw market is to be supplied, among others, by 238-room Focus Hotel Premium Warszawa located in Mokotow, 192-room Staybridge Suites Warszawa Ursynów, 448-room Royal Tulip Warsaw Apartments in Unique Tower building on Grzybowska Street, 96-room Autograph Collection by Marriott International in Warsaw's Old Town, or 66-room Flaner Hotel WorldHotels Crafted Collection. In Cracow, a 216-room Hyatt Place Kraków hotel, 125-room Autograph Collection by Marriott International, 116-room Curio Collection by Hilton Hotel Saski Kraków, 53-room Garamond Boutique Hotel Tribute Portfolio, and 173-room Hampton by Hilton Krakow Airport hotel are to open next year. A 130-room B&B hotel is to welcome guests in Lublin, and a 122-room Hampton by Hilton BiaÅ‚ystok is to be commissioned in Bialystok. The 201-room Q Hotel Plus WrocÅ‚aw Bielany will open in Wroclaw and the former Sofitel Wroclaw Old Town hotel with 205 rooms will reopen under the Wyndham brand. More challenges The rapidly changing market conditions mean that the industry is facing new challenges. The greatest difficulties that hotels will have to grapple with in the near future are the rising costs of living and the lack of employees. Problems are also related to the recovery of demand from corporate guests, the MICE sector and foreign tourists. Rises in energy, gas and garbage disposal prices, and rising labor costs, are making it difficult for the sector to recover. Growing inflation driving the costs of maintaining facilities is forcing a rise in accommodation prices. We can expect an increase in accommodation prices in the upcoming months, both in holiday destinations and urban locations. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

  Gold’s fate in 2021 will be determined mainly by inflation and the Fed’s reaction to it. In the epic struggle between chaos and order, chaos has an easier task, as there is usually only one proper method to do a job – the job that you can screw up in many ways. Thus, although economists see a strong economic expansion with cooling prices and normalization in monetary policies in 2022, many things could go wrong. The Omicron strain of coronavirus or its new variants could become more contagious and deadly, pushing the world into the Great Lockdown again. The real estate crisis in China could lead the country into recession, with serious economic consequences for the global economy. Oh, by the way, we could see an escalation between China and Taiwan, or between China and the US, especially after the recent test of hypersonic missiles by the former country. Having said that, I believe that the major forces affecting the gold market in 2022 will be – similarly to last year’s – inflation and the Fed’s response to it. Considering things in isolation, high inflation should be supportive of gold prices. The problem here is that gold prefers high and rising inflation. Although the inflation rate should continue its upward move for a while, it’s likely to peak this year. Indeed, based on very simple monetarist reasoning, I expect the peak to be somewhere in the first quarter of 2022. This is because the lag between the acceleration in money supply growth (March 2020) and CPI growth (March 2021) was a year. The peak in the former occurred in February 2021, as the chart below shows. You can do the math (by the way, this is the exercise that turned out to be too difficult for Jerome Powell and his “smart” colleagues from the Fed). This is – as I’ve said – very uncomplicated thinking that assumes the stability of the lag between monetary impulses and price reactions. However, given the Fed’s passive reaction to inflation and the fact that the pace of money supply growth didn’t return to the pre-pandemic level, but stayed at twice as high, the peak in inflation may occur later. In other words, more persistent inflation is the major risk for the economy that many economists still downplay. The consensus expectation is that inflation returns to a level close to the Fed’s target by the end of the year. For 2021, the forecasts were similar. Instead, inflation has risen to about 7%. Thus, never underestimate the power of the inflation dragon, especially if the beast is left unchecked! As everyone knows, dragons love gold – and this feeling is mutual. The Saxo Bank, in its annual “Outrageous Predictions”, sees the potential for US consumer prices to rise 15% in 2022, as “companies bid up wages in an effort to find willing and qualified workers, triggering a wage-price spiral unlike anything seen since the 1970’s”. Actually, given the fact that millions of Americans left the labor market – which the Fed doesn’t understand and still expects that they will come back – this prediction is not as extreme as one could expect. I still hope that inflationary pressure will moderate this year, but I’m afraid that the fall may not be substantial. On the other hand, we have the Fed with its hawkish rhetoric and tapering of quantitative easing. The US central bank is expected to start a tightening cycle, hiking the federal funds rate at least twice this year. It doesn’t sound good for gold, does it? A hawkish Fed implies a stronger greenback and rising real interest rates, which is negative for the yellow metal. As the chart below shows, the normalization of monetary policy after the Great Recession, with the infamous “taper tantrum”, was very supportive of the US dollar but lethal for gold. However, the price of gold bottomed in December 2015, exactly when the Fed hiked the interest rates for the first time after the global financial crisis. Markets are always future-oriented, so they often react more to expected rather than actual events. Another thing is that the Fed’s tightening cycle of 2015-2018 was dovish and the federal funds rate (and the Fed’s balance sheet) never returned to pre-crisis levels. The same applies to the current situation: despite all the hawkish reactions, the Fed is terribly behind the curve. Last but not least, history teaches us that a tightening Fed spells trouble for markets. As a reminder, the last tightening cycle led to the reversal of the yield curve in 2019 and the repo crisis, which forced the US central bank to cut interest rates, even before anyone has heard of covid-19. Hence, the Fed is in a very difficult situation. It either stays behind the curve, which risks letting inflation get out of control, or tightens its monetary policy in a decisive manner, just like Paul Volcker did in the 1980s, which risks a correction of already-elevated asset prices and the next economic crisis. Such expectations have boosted gold prices since December 2015, and they could support the yellow metal today as well. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.

Bitcoin, the plan, and its execution The Plan: It is an election year when Democrats will project political pressure upon the Federal Reserve to not risk through aggressive policy changes a stock market collapse to keep their votes. As a result, more money printing expands inflation, which supports the interest for bitcoin as an inflation hedge. Should we see in opposition for whatever reason a rapid stock market decline, the investor would unlikely be interested in owning stock or bonds. While initially, bitcoin prices would likely fall alongside the markets, money will likely flow into bitcoin shortly afterward. The execution: With bitcoins prices suppressed from their recent decline (down 52% from its last all-time high at around US$69,000), we have another edge for minimizing exposure risk. BTC in US-Dollar, monthly chart, high likely turning points: Bitcoin in US-Dollar, monthly chart as of January 31st, 2022. The chart above depicts five supply zones we have our eye on. We will try identifying low-risk entry points on smaller time frames at or near these points and reduce risk further with our quad exit strategy. We already had entries near zone 1 and 2 and posted those live in our free Telegram channel. BTC in US-Dollar, weekly chart, bitcoin, the plan, and its execution, reload trading: Bitcoin in US-Dollar, weekly chart as of February 1st, 2022. Once the more significant time frame turning point is identified (white arrow), we will add what we call ‘reload’ trades (see chart above) on the smaller weekly time frame. We do so by identifying low-risk entries in congestion zones (yellow boxes) on the way up. We aim to arrive near the elections in November with a sizable position that is due to our exit strategy being risk-free. Playing with the market’s money will allow for positive execution psychology and ease us to observe our position through an expected volatility period, with further profit-taking into possible volatile upswings that are only temporary in nature. BTC in US-Dollar, Quarterly Chart, long-term profit potential: Bitcoin in US-Dollar, quarterly chart as of February 1st, 2022. While this year’s midterm trading on the long side of the bitcoin market could provide for substantial income from the 50% profit-taking of each individual trade and reload based on our quad exit strategy, the real goal is to have a remaining position size that could potentially go to unfathomable heights, since we see in the long term the inflation problem not going away but rather culminating in a bitcoin rise that could be substantially much larger in percentage than alternative inflation hedges like real estate, gold, silver and alike. Not to say that we find it also essential to hold these asset classes for wealth preservation. The quarterly chart above illustrates the potential of such a position. We illustrated both in time (six years) and price (US$ 134,000) our most conservative model in this chart. Bitcoin, the plan, and its execution: We see no scenario where inflation is just going away. The above narrative shows that a short-term fueling of inflation is likely. Furthermore, a high-risk scenario is fueling inflation even more. Should markets decline rapidly, it can be expected that money printing and buying up the market is the most predominant solution applied. Consequently, the average investor would wake up relieved that prices wouldn’t decline any further but liquidating their holdings in a further inflated fiat currency will have massively decreased purchasing power. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 1st, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

PRESS RELESE Warsaw, 02.02.2022 Rise.pl company has leased 1 600 sq m. of space in the CZ Office Park complex located at the intersection of Aleja KraÅ›nicka and NaÅ‚Ä™czowska Streets in Lublin. In June 2022, the provider of flexible workplaces solutions will offer a modern flex office space in the new location. Walter Herz supported the operator in the process of selecting space and negotiating lease terms. Rise.pl will launch instant offices and coworking spaces in CZ Office Park, an A-class office complex in Lublin. Tenants will also be able to use event spaces, 11 conference rooms, a chillout zone with a pool table and game systems, as well as an internal bar and cafeteria, kitchen and reception. The Lublin branch is the 13th location of Rise.pl in Poland, which also operates under the Chillispaces brand. The provider of flexible work solutions offers flex space in seven offices in Cracow, two offices in Lodz and branches located in Wroclaw and Rzeszow. Each office is tailored to the needs of the local businesses and allows for quick expansion. - We chose Lublin because we see great potential in this city for our industry, among others due to the fact that many companies from the IT sector and the outsourcing industry operate there. Moreover, Lublin is a very open business center that encourages companies to invest - says Katarzyna Augustyn, Sales and Marketing Director at Rise.pl. - When choosing the building in which we would open our first office in Lublin, we realized that the first location in the city is very important for the brand and will become a showcase and a point of reference for our further development. Therefore, entering the Lublin market required the selection of an outstanding property to display the quality and style we want to be identified with - says Katarzyna Augustyn. The operator ensures that the offices under the Rise.pl brand are arranged in such a way that they are not only comfortable places to work, with high technical standards and parameters related to safety, but also original spaces, with tasteful interiors, where one can not only work comfortably, but also spend quality time. Rise.pl has extensive development plans. The company intends to gradually expand the network of services so that the flexible offices offered by the company are available in all regions of the country. Lublin is the second location in Eastern Poland, after Rzeszow, for which Rise.pl has had extensive expansion plans for a long time. In the next two years, the company plans on launching flexible offices also in Szczecin, Poznan, Wroclaw, Opole, Katowice, Gliwice and Warsaw. - The concluded lease transaction is an important step for the development of Lublin's office infrastructure. Thanks to this decision, the city will gain the first modern flex office space. Due to the changes in ​​tenant preferences that have taken place on the market over the last two years, instant offices is a sector that will now develop even faster. Adoption of the long-term operating strategies by companies from the industry is confirmed by a 10-year lease period in CZ Office Park in Lublin. We are glad that we can contribute to the growth of the flexible work space market and participate in the transformation process that is currently taking place in the office segment in our country. Thanks to the wide range of office solutions and an increasingly extensive network of services offered by operators of flexible office spaces, tenants can work in a convenient place, time and form all over Poland - says Mateusz Strzelecki, Partner/Head of Regional Markets at Walter Herz. - Rise.pl was looking for a mixed-use space that would combine both a coworking space and independent offices for larger office segments, as well as full conference and event services. The lease of space in CZ Office Park was determined primarily by the unrivaled quality of the offered space, which allows for any configuration of office zones and the vicinity of key transport hubs in the city - informs Mateusz Dembski-Kornaga, Senior Negotiator at Walter Herz. - We are very pleased with Rise.pl’s investment, which is an important element of the city's economic ecosystem. The presence of such a valued brand in Lublin is a clear signal that the city's investment potential remains high, despite the economic turmoil on a national scale. Over the last several months, we have observed an increasing interest in flexible space on the market, which is reflected in the profile of the projects we handle. The space offered by Rise.pl will certainly become an important point on the map of business events in Lublin - says Igor Niewiadomski, coordinator of the Investor Assistance Office of the Lublin City Office, which supported the project. CZ Office Park D is a prestigious A-class office and retail building, located at the intersection of Aleja KraÅ›nicka and NaÅ‚Ä™czowska Streets in Lublin. One of the most modern properties in the city is located near the main transportation routes and academic centers. The total lease area offered by the complex is over 40,4 thousand sq m. The buildings were made in a modern, energy-saving facade technology with the use of the latest air-conditioning and ventilation solutions, guaranteeing comfortable working conditions. CZ Office Park is a place that attracts high-profile events, engaging both tenants and the business and cultural environment of the city. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

The first quarter of 2022 is underway and it is time to highlight some of the top companies that have been analyzed by our QuantStock Fundamental system so far. Topping the list are three well-known companies, one in technology and two from the financial services side of the market with all three companies paying out dividends to investors. Our QuantStock Fundamental system is a proprietary algorithm that examines each company’s fundamental metrics, trends and overall strength to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock Fundamental system does not take into consideration the stock price or technical price trends so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that always has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Be sure to join our email newsletter for our system updates. Here we go with our 3 of our Top Stocks we added to our Watchlist from January 1st through January 31st of 2022: Seagate Technology Information Technology, Medium Cap, 13.8 P/E, 2.50+ Percent Dividend, Our Grade = B Seagate Technology (STX) has ascended our grading threshold to be included on the watchlist for the second consecutive quarter. STX is an information technology company headquartered in Ireland that specializes in technology hardware, storage devices and other cloud storage services. Highlighting their fundamental case over the past two quarters has been a rising earning per share (beating expectations three quarters in a row) as well as a rising dividend that is currently above 2.50 percent. On a technical basis, the STX price has been volatile since the beginning of the year like most other tech stocks. STX hit a low share price under $92.00 on January 25th but has rallied since to over $110.00 per share at time of writing. Raymond James Financial Inc Financials, Medium Cap, 15.84 P/E, 1.15+ Percent Dividend, Our Grade = B- Raymond James Financial INC (RJF) is next up and a well known financial company that has also made our watchlist for the second straight quarter. RJF, a medium-cap company ($28+ billion) is headquartered in Florida and provides financial services to investors and corporations throughout the US, Canada and Europe. RJF currently trades at an approximate 15.5 PE-Ratio and has had higher earnings per share for three straight quarters, beating earnings per share expectations in all three quarters as well. The dividend has continued on a growth path with the current quarterly dividend at approximately 1.15 percent at time of writing. Technically, the RJF share price has been surging higher recently and currently trading around the $115.00 price point at time of writing. In the short term, the stock is on the higher side of its trading range as evidenced by the ZScore of the 50-day moving average (2.38 standard deviations above the 50-day moving average currently). Blackstone Inc Financials, Large Cap, 15.8 P/E, 3.80+ Percent Dividend, Our Grade = C Blackstone Inc (BX) was added to our watchlist for the first time in January and is a financial large cap company ($154+ billion) located in New York, New York. BX provides global asset management services to investors, pension funds and institutional clients across a broad range of markets including real estate, bonds, equities and various credits. Blackstone’s stock is currently trading at a 15.8 Price/Earnings Ratio and the company has had earnings per share growth each of the past three quarters, beating expectations each time. The dividend has been on an upward trajectory with the current yield surpassing the 3.80 percent threshold at current prices. Technically, the BX share price has been on the rebound recently after dropping in late January to a low of $101.65. The stock has bounced back strong to a current price of above $130.00 per share and trading right above a support level. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list. Disclaimer: I currently own STX, RJF and BX stock at this time in ETFs and/or Closed-End Funds. I do not own direct shares of these companies at time of writing. This article and our system grading are for informational and educational purposes only, not a recommendation to buy, sell or hold shares of any particular stock, ETF, company or security. All investors are always strongly advised to conduct their own independent research into any stock, ETF, closed-end fund or any other financial instrument before making an investment decision. Investmacro.com authors are not registered investment advisors, do not make stock market recommendations, do not offer legal advice, do not offer tax advice and cannot be held liable for any losses occurred. All data is thought to be accurate as of time of writing but can and will change over time due to changes in the underlying securities price and data.   

S&P 500 opening range gave way to heavy selling as 4,470s didn‘t hold. Risk-on was overpowered, and the flight to Treasuries didn‘t support tech. And that‘s most medium-term worrying – stocks don‘t look to have found a floor, and gave up the opportunity for a tight range trading on Friday all too easily. The prospects of war were that formidable opponent, against which the S&P 500 didn‘t really stand a chance. So, the downtrend has reasserted itself, and HYG doesn‘t look to have found a floor – junk bonds are leading to the downside, with energy, materials and financials standing out, which isn‘t exactly a bullish constellation. The other key beneficiaries of the safe haven bid were gold, miners and oil. Silver lagged as copper retreated all too easily, but I‘m looking for that to change. As for Monday‘s session in stocks, the odds of a countertrend move to the upside, at least intraday, are good. Just a quick glance at the dollar, gold, oil and Bitcoin would reveal the extent of possible stabilization. Stabilization, not a reversal, because HYG is unlikely to turn up, and I‘m not looking for stocks to start moving up again. Thursday marked a high point in the countertrend rally, which was cut short after some 5 days only. Sideways to a little up is the best the bulls can hope for on Monday. Funny though how with all eyes on Eastern Europe, the inflation and steep rate hike bets receded? What a Super Bowl! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Whatever backing and filling there could have been, the S&P 500 didn‘t hesitate, and is pointing to the downside. The bears are back, and aren‘t yielding. Credit Markets Credit markets went decidedly risk-off, and a little sideways reprieve wouldn‘t be surprising. But it would change nothing as the bets on rising rates, are on, and the 2-year Treasury is forcing the Fed‘s hand. Gold, Silver and Miners Miners and gold came alive on the tensions escalation news – the uptrend is alive and well indeed, even without these geopolitical developments. The upswing wasn‘t really sold into. Crude Oil Crude oil correction came to an abrupt close, and it‘s unlikely black gold would dip in the current environment. The upcoming corrections would be bought as much as the previous one, and given the oil stocks performance, wouldn‘t likely reach far to the downside. Copper Copper is under pressure, and not holding up as well as other commodities. Base metals though are breaking higher, which is why I‘m looking at Friday‘s red metal trading as a temporary setback only. Bitcoin and Ethereum The floor in cryptos is heralding a tight range day – it‘s good for risk-on that Friday‘s downswing isn‘t immediately continuing, it‘s buying some time. Summary S&P 500 bears are back in the driver‘s seat, and the rush to Treasuries took the spotlight off rate hikes – to a small degree. Not that the Fed would be changing course on geopolitics, we aren‘t there yet. To the contrary, credit markets are pressuring the central bank to move – as decisively as possible in the overleveraged system – and Powell would find it hard not to deliver. Come autumn latest, the strain on the real economy would be hard to ignore – real estate is feeling the pinch already. Stock bulls can‘t expect higher prices unless tech recovers, and we look to be still far from that moment. Real assets with safe haven appeal are likely to do best, and the same goes for the dollar temporarily too. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

S&P 500 is waking up to fresh European news, and holds up well. There is no panic upswing in gold and silver, but crude oil and natural gas are up the most. As the U.S. markets are to open following yesterday‘s Washington‘s Birthday holiday, let‘s bring up the key details of yesterday‘s analysis: (…) S&P 500 opening upswing gave way to more selling, but credit markets didn‘t lead to the downside on a daily basis. This tells me the plunge would likely be challenged shortly. As in facing a reversal attempt – it‘s that junk bonds for all the recent (and still to come) deterioration, will probably rebound a little next. Value already retraced part of Friday‘s decline – it‘s just tech that didn‘t yet react to the Treasuries reprieve. Good to have taken short profits off the table. The table is set for S&P 500 to rise, and for bonds to rally somewhat. And that wouldn‘t be the result of war tensions lifting up Treasuries, gold and oil. Red hot inflation, decelerating growth and compressing yield curve are a challenging environment, and the odds of a 50bp Mar rate hike are overwhelming, but the Fed‘s balance sheet is still rising – now within spitting distance of $9T. Sure they will take on inflation, but I continue to think that by autumn they would be forced to reverse course, and start easing. Fresh stimulus after markets protest during 1H 2022? Would be helpful for the midterms... The consumer isn‘t in a great shape as the confidence data reveal – and that‘s also reflected in the direction of discretionaries vs. staples. Inflation is pinching, and the pressure on the Fed to act, is on – its credibility is being challenged. Food inflation is high, and seeing food at home prices rising this much, is as surefire marker of coming recession as yield curve inversion is. And yield differentials are flattening around the world – quite a few central banks are more ahead in the tightening path than the Fed. Economy slowing down, stock market correction far from over (yes, in spite of the coming rebound, I‘m looking for lower lows still), and precious metals upleg underway – yes, underway, and especially our gold profits can keep rising - as I wrote on Friday: (…) With gold at $1,900 again and silver approaching $24, copper‘s fate is also brightening – the miners‘ continued outperformance is a very good sign. With crude oil taking a breather, the inflationary pressures aren‘t at least increasing, but don‘t look for the Bullard or other statements to defeat inflation – I‘m standing by the 4-5% official rate CPI data for 2022 (discussed in yesterday‘s summary). CPI might turn out even a full percentage point higher – depends upon the hedonics and substitution massaging. What a long quote – let‘s update it with the premarket action. S&P 500 is still waiting with its potential upsing, dollar has gone nowhere really, and precious metals look like having a bright day today. The crude oil upswing shows that markets don‘t like the geopolitical news, and are likely to behave in a risk-off way of late (Treasuries, gold and oil up benefiting most). The internals of today‘s stock market action would be telling – I recently got an interesting question touching also upon rates and real estate: Q: I read your most recent newsletter with great interest: 1. You think the Fed would start to ease this fall? In your opinion, how long would that last?  Midterm would be done soon there after so would it be a quick few months then revert back to higher rates? 2. I’m asking question #1 as it would impact real estate. 3. You anticipate a “temporary” rise in the S&P this week? Are you thinking just a few days? I noticed 10 yr is going down. A: Thank you for asking. I'll take 1 & 2 in one go - I think they would change course latest autumn. So, now hawkish and raising, then turning to easing before midterms. Let's see first the damage this tightening does, and the degree to which they then turn dovish. As regards real estate, it's slowing down, homebuilders, XLRE... Headwinds would be stiffening, rates are eating into mortgages, but those ZIP codes where immigration into is high, would do best - but the overall, total real estate isn't an appealing proposition. When markets open, there is likely to be a little SPX rally off oversold readings. Sure, they can get more oversold - that's the way it goes during bearish episodes, which is why I'm not long. The trend for now is to the downside, so I would keep predominantly looking and taking opportunities to short. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 caught a little buying interest going into the long weekend – better days though look to be coming. Not a monstrous rally, but still an upswing. Credit Markets HYG is indeed basing, and will help stocks move higher next. LQD and TLT are already rising, and there is still somewhat more to come. Bonds have simply deteriorated too fast in 2022, and need a breather. Gold, Silver and Miners Precious metals fireworks continue – we‘re getting started, and $1,920 is the next stop. Kiss of life from the bond market reprieve comes next, on top of all the other factors I‘ve talked about recently. Crude Oil Crude oil is fairly well bid, but the war jitters are helping it out (as in staving off a bit deeper correction). As both oil and base metals are rising, inflation isn‘t likely to slow down (perhaps later in summer?) - black gold‘s uptrend isn‘t over really. Copper Copper keeps going sideways in a volatile fashion, and can be counted on to break higher – inflationary pressures aren‘t abating, and outweigh the slowing economy. Bitcoin and Ethereum Cryptos stopped breaking down today, and the price action smacks of joining in the modest risk-on upswing, as unbelievable as it sounds. Summary Yesterday‘s summary is valid also today – S&P 500 appears on the verge of trying to swing higher, and credit markets would be leading the charge as tech finally turns. Value had trouble declining some more on Friday already. Stock market upswing though wouldn‘t throw the precious metals bulls off balance – not too many weeks have passed since I was at the turn of the year predicting that gold (and silver with miners implied) would be the bullish surprise of 2022 – and for all the talk and preemtive tightening in the credit markets, we haven‘t yet seen the Fed move. Anyway, such a lag in moving the Fed funds rate higher, is normal these decades – we are a long way from the early 1980s when the delay between say 2-year Treasury and Fed funds rate move was some 2 months. Crude oil is likewise going to keep rising, and the same goes naturally for copper following in the footsteps. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

PRESS RELEASE Warsaw, 23.02.2022Warsaw Chamber of Tax Administration has leased over 640 sq m. of office space with a 2000 sq m. square located next to the office building for its subordinate unit in the OKAM investment in Warsaw district of Żerań.The Chamber was looking for a location that would allow for the lease of both office space and a suitable area for customs clearance for the Customs Department VI in Warsaw, currently located in the Targówek district.These conditions were met by the warehouse, production and office complex located on the site of the former car factory at Jagiellońska Street in Warsaw.- The Chamber planned to relocate to a new office. However, the property also had to guarantee efficient logistics related to the customs clearance of goods. The infrastructure of the mixed-use complex in Żerań, its unique character on the scale of the entire Warsaw agglomeration, made it possible to fully meet the tenant's requirements. The profile of the investment allowed for a full consolidation and concentration the activities of the institution and its administration in one place - informs Piotr Szymoński, Director Office Agency at Walter Herz, the company which represented the landlord during the transaction.The new headquarters of the Customs Department VI in Warsaw and two organizational units of MCTO, they plan to move into next month, is located in a four-storey building, with a total of over 3100 sq m. of space.- Warsaw market offers many attractive spaces, which is why we feel all the more distinguished by the choice of our investment in Żerań by the Warsaw Chamber of Tax Administration. We hope that the office space leased by the Chamber along with the adjacent square will meet all of the current and future expectations of the organization. Our project in Żerań will also actively develop with our tenants and their needs in mind – says Arie Koren, CEO of OKAM City.OKAM investment in Żerań provides both office, retail and commercial space, as well as warehouse space, the height of which exceeds even 20 meters. It also has paved areas of high load capacity, intended for exhibition squares and parking lots.Most of the lease space in the complex is characterized by a great variety in terms of the offered parameters. - This makes the location a great choice for customers looking for space with different functions and non-standard dimensions in one investment - says Piotr Szymoński. The location provides direct access to the S8 route. The center of Warsaw can be reached within 20 minutes from the OKAM investment. Bus and tram stops as well as bicycle paths are located 250 m from the entrance to the complex. About Walter HerzWalter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects.In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice. About OKAMOKAM Capital has been a leader among the real estate development companies for over 17 years. The company specializes in residential and commercial construction. OKAM portfolio includes 25 projects in 7 cities in Poland, such as Strefa PROGRESS in Łódź, INCITY and CITYFLOW in Warsaw district of Wola, MOKKA, VISTA and CENTRAL HOUSE in Mokotów, ARLET HOUSE in Ochota, ŻOLI ŻOLI in Żoliborz, BOHEMA - Strefa Praga in Praga Północ and 62 ha in Warsaw district of Żerań. In Katowice, the company is implementing investments in Dolina Trzech Stawów: DOM W DOLINIE TRZECH STAWÓW and INSPIRE. The assets of OKAM also include historic tenement houses in the center of Katowice as well as in Cracow.At the end of 2018, OKAM introduced the New Quality Policy as an expression of corporate social responsibility. Starting with the CENTRAL HOUSE investment, all OKAM residential investments will be equipped with pro-ecological and functional solutions supporting climate protection and improving the comfort of living, such as electric vehicle rental, bicycle rental, air purifiers, solar panels, systems for reusing rainwater, etc.

According to Savills, the e-commerce boom is continuing to drive demand for industrial and logistics assets across Europe, as new records were set for both levels of investment and leasing activity in 2021. In Poland, take-up in 2021 reached an all-time high and industrial assets accounted for over a half of the total investment volume. Some EUR 62bn was invested into industrial real estate across Europe, marking a 79% increase on the previous five year average. The UK (EUR 19.5bn) outperformed the rest of the continent and accounted for 31% of total investment activity. Germany (EUR 8.6bn), France (EUR 6.5bn) and Sweden (EUR 5.8bn) and the Netherlands (EUR 5.7bn) also recorded strong levels. Savills research also noted that investment into industrial assets accounted for 66% of European omnichannel investment in 2021, up from 47% in 2019, as investors were willing to pay premiums to gain exposure to the sector. “The trend for customers shifting to online shopping throughout the pandemic triggered the e-commerce boom, which has been a major catalyst for this sector’s growth,” comments Mike Barnes, Savills European Research. “So far it has shown little sign of slowing, even as restrictions have lifted and, as a result, the significant weight of capital targeting these assets has compressed prime yields by an average of 27bps to 4.20% over the last six months. Portugal, Spain and Finland have hardened by 50 bps each.” This demand is clearly represented by the unprecedented levels of leasing activity in the industrial sector across Europe last year, with take up reaching 38m sq m, 28% ahead of the previous five year average. Germany (8.6m sq m), the Netherlands (6.9m sq m) and the UK (5.1m sq m) drove the lion’s share of leasing activity, whilst Romania (+63%), France (+63%) and Spain (+62%) performed the strongest above their five year averages. Savills has observed that the record shortage of prime stock has driven upward pressure on rents, rising an average of 5% year on year. London (+25%), Dublin (+17%) and Prague (12%) were the fastest growing markets in 2021. Marcus de Minckwitz, Head of Industrial & Logistics, Savills EMEA, suggests, “Market fundamentals have been hugely favourable for the sector in recent years, and they will continue to underpin another strong performance for the year ahead. Our European Logistics Census last year indicated that 46% of occupiers anticipate that they will increase their warehouse floor space over the next 12 months, among the highest in the online retail sector. With such constrained supply, we expect to see increased development in the sector, despite rising construction costs, as well as appetite for assets in non-core locations as investors move up the risk curve in search of higher returns.” In Poland, take-up of industrial space in 2021 reached an all-time high of 7.35 million sq m with an 84% year on year increase in net absorption. Under construction space is 55% pre-leased before completion and vacancy rates have fallen to under 4%. With EUR 2.96 billion transacted, industrial assets accounted for over a half of the total investment volume recorded in 2021, representing a 15% increase year-on-year. John Palmer, Head of industrial Investment, Savills Poland, says: “The warehouse market in Poland is recording record-breaking figures. This trend is set to continue if not accelerate in 2022 and beyond. Investor appetite remains strong for both income producing assets and portfolios and forward funding of new developments.. Poland offers competitive labour rates, FDI incentives, an efficient planning and building permitting system; and all this is backed by growing domestic consumer spending. The dynamics of the occupier is changing with requirements increasingly focused on quality, sustainable and ESG focused properties, professionally managed by long-term landlords”.

Soaring real estate, rising volatility, surging commodities and slumping stocks - Sound Familiar?This past week marked the 13th anniversary of the bottom of the Global Financial Crisis (GFC) of 2007-2009. The March 6, 2009 stock market low for the S&P 500 marked a staggering overall value loss of 51.9%.The GFC of 2007-09 resulted from excessive risk-taking by global financial institutions, which resulted in the bursting of the housing market bubble. This, in turn, led to a vast collapse of mortgage-back securities resulting in a dramatic worldwide financial reset.Sign up for my free trading newsletter so you don’t miss the next opportunity! IS HISTORY REPEATING ITSELF?The following graph shows us that precious metals and energy outperform the stock market as the ‘Bull’ cycle reaches its maturity. The stock market is always the first to lead, the second being the economy, and the third, being the commodity markets. But history has shown that commodity markets can move up substantially as the stock market ‘Bull’ runs out of steam.The current commodities rally in Gold began August 2021, Crude Oil April 2020, and Wheat in January 2022. Interestingly we started seeing capital outflows in the SPY-SPDR S&P 500 Trust ETF in early January 2022, and the DRN-Direxion Daily Real Estate Bull 3x Shares ETF starting back in late December 2021.LET’S SEE WHAT HAPPENED TO THE STOCK AND COMMODITY MARKETS IN 2007-2008SPY - SPDR S&P 500 TRUST ETFFrom August 17, 2007 to July 3, 2008: SPDR S&P 500 ETF Trust depreciated -20.12%The State Street Corporation designed SPY for investors who want a cost-effective and convenient way to invest in the price and yield performance of the S&P 500 Stock Index. According to State Street’s website www.ssga.com, the Benchmark, the S&P 500 Index, comprises selected stocks from five hundred (500) issuers, all of which are listed on national stock exchanges and span over approximately 24 separate industry groups.DBC – INVESCO DB COMMODITY INDEX TRACING FUND ETFFrom August 17 2007 to July 3, 2008: Invesco DB Commodity Index Tracking Fund appreciated +96.81%Invesco designed DBC for investors who want a cost-effective and convenient way to invest in commodity futures. According to Invesco’s website www.invesco.com, the Index is a rules-based index composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world.BE ALERT: THE US FEDERAL RESERVE POLICY MEETING IS THIS WEEK!In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was the highest since August 1982. Gasoline, groceries, and housing were the most significant contributors to the CPI gain. The consumer price index is the price of a weighted average market basket of consumer goods and services purchased by households.The FED was expected to raise interest rates by as much as 50 basis points at its policy meeting this week, March 15-16. However, given the recent world events of the Russia – Ukraine war in Europe, the FED may decide to be more cautious and raise rates by only 25 basis points.HOW WILL RISING INTEREST RATES AFFECT THE STOCK MARKET?As interest rates rise, the cost of borrowing becomes more expensive. Rising interest rates tend to affect the market immediately, while it may take about 9-12 months for the rest of the economy to see any widespread impact. Higher interest rates are generally negative for stocks, with the exception of the financial sector.WILL RISING INTEREST RATES BURST OUR HOUSING BUBBLE?It is too soon to tell exactly what the impact of rising interest rates will be regarding housing. It is worth noting that in a thriving economy, consumers continue buying. However, in our current economy, where the consumers' monthly payment is not keeping up with the price of gasoline and food, it is more likely to experience a leveling off of residential prices or even the risk of a 2007-2009 repeat of price depreciation.THE POTENTIAL FOR OUTSIZED GAINS IN A BEAR MARKET ARE 7X GREATER THAN A BULL MARKET!The average bull market lasts 2.7 years. From the March low of 2009, the current bull market has established a new record as the longest-running bull market at 12 years and nine months. The average bear market lasts just under ten months, while a few have lasted for several years. It is worth noting that bear markets tend to fall 7x faster than bull markets go up. Bear markets also reflect elevated levels of volatility and investor emotions which contribute significantly to the velocity of the market drop.WHAT STRATEGIES CAN HELP YOU NAVIGATE CURRENT MARKET TRENDS?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe havens.IT'S TIME TO GET PREPARED FOR THE COMING STORM; UNDERSTAND HOW TO NAVIGATE THESE TYPES OF MARKETS!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

2021 was a period of intense work, development of a new organizational structure and expanding the team for Walter Herz. The company is operating in the commercial real estate sector, providing comprehensive consulting services across Poland. Consistent expansion of services and the need to provide clients with integrated service and comprehensive support, resulted in a new role emerging in the company. Mateusz Strzelecki, a long-term market expert who has been associated with Walter Herz for 9 years, was appointed Head of Tenant Representation. The promotion opened up even greater opportunities for him to further develop the spectrum of consulting services provided by the company to its clients and to vastly expand its operations in the area of office tenant representation on the largest business markets in the country. - The office market is still the primary focus of ​​Walter Herz's operations. However, the sector has become more demanding due to the intense process of changes and the emerging new directions of its development. Contrary to some predictions, stationary offices have kept their position. A lot is happening in the office market and clients need comprehensive support. Companies still invest heavily in workspace, some even more than before. In order to ensure the highest standard of consulting and full process security in the context of the constant evolution of the market, we must constantly develop. This is what makes our job very interesting, and customer satisfaction is a great motivation for us. Tenant's rights are a field I specialize in. I am pleased to share my knowledge with our business partners and clients, as well as with the participants of Tenant Academy, where I am a lecturer - says Mateusz Strzelecki, Head of Tenant Representation/Partner at Walter Herz. - We have been providing consulting for clients investing in the commercial real estate sector in Poland for a decade. This past year, despite the difficult situation on the market, brought progress for the company, both in terms of the scale of operations and employment growth. We focused on the development of the Office Tenant Representation department. Mateusz Strzelecki, who has been promoted to the position of Head of Tenant Representation, has been responsible for managing the team of advisers and for providing comprehensive support to clients – says BartÅ‚omiej Zagrodnik, Managing Partner/CEO at Walter Herz. An important event for the company was the recent opening of a branch in Lodz. Apart from Warsaw and Cracow, Lodz is the third stationary Walter Herz branch in the country. Therefore, Magdalena Góra has joined the Lodz branch as a Senior Business Development Specialist. - Magda will support our Tenant Representation team in acquiring customers. He has been working in the commercial real estate market for many years. So far, she has advised office tenants, working in the furnishing industry. At Walter Herz, she will have the opportunity to see the market from a different angle. We believe that the combination of our diverse experiences and competences will allow us to raise the standard and comprehensiveness of our consulting, thanks to a broader view of the entire process - says Mateusz Strzelecki, Head of Tenant Representation / Partner at Walter Herz. - We are expanding the scope of strategic consulting services, flexibly changing the employment structure. The expansion of the team allowed us to improve our qualifications in all areas of the commercial real estate market. Last year, employment in the company increased by 30 per cent. We are constantly investing in the development of our organization, including through regular, personalized training that allows to improve the expertise and skills of the employees. We care for the development of our staff and professional fulfillment of all people in the team. Among them, we have numerous long-term employees who take up new functions and are successively being promoted. The company is still actively looking for specialists with experience in consulting concerning all sectors of the real estate market for project teams, in order to be able to effectively develop partner relations with clients and provide them with the necessary knowledge - says Magdalena Zagrodnik, Head of HR & Business Partner at Walter Herz. In everyday work with clients, the company’s motto is - We care & We share. This goal is also a guideline for the further implementation of Walter Herz’s Tenant Academy - a proprietary training project designed to educate tenants of commercial space across the country. Last year, during the fifth edition of the event, we organized five specialized webinars and one hybrid panel. Almost 1000 participants signed up for it. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For ten years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners across the country. Walter Herz experts assist investors, property owners and tenants. They provide full service, to companies from the private as well as public sectors. Walter Herz advisors support clients in finding and leasing space, and provide consulting in the implementation of investment projects in the warehouse, office, retail and hotel sectors. The company is based in Warsaw and runs regional branches in Cracow and Łódź. Walter Herz has created the Tenant Academy, the first project in Poland, which supports and educates commercial tenants from all over Poland by organizing specialized training meetings. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

There are still fewer leased and built offices than two years ago, but there is an upward trend in the office sector. Last year, some regional markets saw a sizable increase in demand, even compared to 2019 In 2021, 325 thousand sq m of office space was delivered on the Warsaw market. Such a high result was last seen in 2016. Several spectacular buildings, the implementation of which began before the pandemic, have been commissioned. Skyliner, Warsaw Unit, Generation Park Y and Fabryka Norblina have been completed in the vicinity of DaszyÅ„skiego roundabout. The construction of X20 building and Moje Miejsce II in the district of Mokotów have been completed. Warsaw office resources, which already exceed 6.15 million sq m. have also gained two office buildings in Centrum Praskie Koneser complex, as well as the EQ2 building and Baletowa Business Park. Warsaw with a negligible amount of new projects On the other hand, there is over a half less offices under construction in Warsaw than in recent years, when about 700-800 thousand sq m. of space was commissioned annually. According to Walter Herz, almost 330 thousand sq m. of offices is currently under construction. The last time there has been so little of them built in the city was a decade ago. Most of the projects will be completed this and next year. The office buildings under construction include, among others, Varso Tower, SkySawa, The Bridge, P180 and Bohema. The high level of new supply in 2021 and lower demand caused the vacancy rate to increase in the Warsaw market by 2.8 pp. to 12.7 per cent and become the highest in six years. - The activity of tenants in the office market is still lower than before the pandemic, but its gradual increase is noticeable. The total volume of lease in the office sector in Poland in 2021 was several percent higher than in the previous year. In Warsaw, the volume of lease transactions increased by over 7% year on year. Over 646 thousand sq m. of space has been leased. This result is significantly lower than in 2015-2019, when tenants leased an average of about 830 thousand sq m. of offices - says BartÅ‚omiej Zagrodnik, Managing Partner/CEO of Walter Herz. - However, offices still remain an important element of companies' business activities and interesting assets for investors. So far, rental rates are at the same level as before, but a significant increase in construction costs is putting pressure to increase them – adds BartÅ‚omiej Zagrodnik. The Tri-City with the largest number of new offices In the regions, the highest increase in resources was recorded in the Tri-City. The offer of the Tri-City office market, which is the fourth in the country, will soon reach 1 million sq m. of space, due to the completion of construction of 73 thousand sq m. of offices in 3T Office Park, Palio, LPP Fashion Lab and Gato projects. Cracow, the second largest office market in Poland, increased its offer last year to over 1.6 million sq m. of space. The supply increased by over 60 thousand sq m. of space, due to the completion of Equal Business Park D, Ocean Office Park A, Tertium Business Park B and Aleja Pokoju 81. Over 37 thousand sq m. of offices has been delivered to the office market in Poznan in Nowy Rynek D building. As a result, the resources exceeded 620 thousand sq m. of space. In Wroclaw, Krakowska 35 and Nowa Strzegomska projects were commissioned, offering a total of 22 thousand sq m. of space. As a result, the offer increased to 1.25 million sq m. In Katowice (600 thousand sq m.), over 13 thousand sq m. of space entered the market last year, and in Lodz (583 thousand sq m.) - 3.6 thousand sq m. Katowice market with the largest development Katowice clearly stands out in the regions with the number of offices under construction. There are as many as 200 thousand sq m. of space under construction on the Katowice market, which accounts for nearly a third of the city's current resources. Most of the projects are to be completed this year. The Cracow market is also growing, with 165 thousand sq m. of office space under construction. - If the macroeconomic conditions and the economic situation are favorable, this value may increase in the upcoming quarters with projects that are being prepared for implementation in Cracow - says Mateusz Strzelecki, Head of Tenant Representation/Partner at Walter Herz. - Another office market that is also expanding is Wroclaw with 150 thousand sq m. of space under construction, among others in the Brama OÅ‚awska project, Quorum Office Park and another building in the Centrum PoÅ‚udnie and Tri-City complex with 120 thousand sq m. of offices that are implemented mainly in Gdansk - informs Mateusz Strzelecki. Nearly 80 thousand sq m. of office space is under construction in Poznan and almost 90 thousand sq m. of offices in Lodz. The largest investment on the Poznan market is Andersia Silver, which upon completion will deliver the tallest building in the city. In the near future, Lodz will offer modern space in Manufaktura Widzewska, Fuzja and React projects. Demand in the regions is at a fair level According to Walter Herz, the lease level in regional markets was over a dozen per cent lower last year than in 2019. - While the office sector has seen a significant recovery in the second half of 2021, the annual transaction value is still below the pre-pandemic average. However, the high demand for offices registered last year in Wroclaw, the Tri-City and Poznan, where more space was contracted than in 2019 is noteworthy - says Mateusz Strzelecki. Last year, we could observe the greatest demand for offices in Cracow, where approximately 156 thousand sq m. of space was leased and in Wroclaw, which showed absorption at the level of 153 thousand sq m. While the demand on the Cracow market was slightly lower than in the previous years, in Wroclaw the result was several per cent higher, both in comparison to 2020 and 2019. The Tri-City and Poznan markets also showed an increase in demand last year. The rental volume in the Tri-City amounted to 108 thousand sq m. of office space and was 23 per cent higher than the year before, and nearly 7 per cent higher than in 2019. Poznan, on the other hand, where lease agreements for 73 thousand sq m of offices were signed, recorded over 80 per cent increase in demand for offices, compared to 2019. The demand on the Katowice market dropped to 53 thousand sq m. of space, that’s 16 per cent lower than a year earlier. In Lodz, 51 thousand sq m. of offices were contracted, which is also less than in previous years. Over the last year, the vacancy rate in regional markets increased slightly. Only in Poznan, due to the jump in demand, it slightly decreased. It is currently at the level of 10.5 per cent in Katowice to 16.7 per cent in Wroclaw. Experts point out that the model of arranging office space is changing. More rooms for meetings and videoconferences are now being designed. A larger number of desks also function as workstations, which, depending on the needs, can be used by various people in the hybrid system. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For ten years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners across the country. Walter Herz experts assist investors, property owners and tenants. They provide full service, to companies from the private as well as public sectors. Walter Herz advisors support clients in finding and leasing space, and provide consulting in the implementation of investment projects in the warehouse, office, retail and hotel sectors. The company is based in Warsaw and runs regional branches in Cracow and Łódź. Walter Herz has created the Tenant Academy, the first project in Poland, which supports and educates commercial tenants from all over Poland by organizing specialized training meetings. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

  Preliminary figures compiled by Savills suggest that the total real estate investment volume in Europe for the first quarter of the year will reach approximately €70bn, a 19.5% increase year-on-year. Despite geopolitical events, the real estate advisor expects solid European investment activity for the remainder of the year, notably fuelled by large portfolio and entity deals. Savills anticipates total European real estate investment volumes for 2022 to reach between €300bn and €330bn, which would be 5-10% above the five-year average, as long as the Russia/Ukraine crisis doesn’t last too long and doesn’t have a long-term impact on the European economy. Lydia Brissy, Director, European Research at Savills, says: “Given the current context, we expect most of the investment activity this year will focus on Western Europe and particularly, the core countries of UK, Germany and France. Our preliminary Q1 figures suggest that those three countries have received 66.6% of the total European investment volume this quarter, up from 61.4% last year.” Tomasz Buras, CEO, Savills Poland, says: “The hostilities in Ukraine are having a stronger impact on the Polish real estate market than on Western European markets. Developers are facing severe disruptions to supplies of building materials and reduced availability of construction workers. Tenants have already suffered from rising inflation and energy charges, further fuelled by the weakening Polish zÅ‚oty relative to the euro, a currency in which rents are denominated. We are, however, seeing a surge in demand on the residential rental market and more enquiries for office and warehouse space from companies wanting or forced to relocate operations to Poland. Cross-border investors are likely to remain more cautious in the coming weeks, leading to a short-term dip in real estate investment volumes, albeit with a potential for a strong rebound if the armed conflict is quickly resolved peacefully.” James Burke, Director, Regional Investment Advisory EMEA at Savills, says: “For perhaps the first time since the Covid-19 pandemic, prime offices are looking like an increasingly attractive defensive investment as they are relatively protected from higher inflation due to the indexation of rents across core European cities. Based on our preliminary figures, prime office yields compressed further by an average of 17 bps year on year to 3.40% in Q1 2022. Office yield spreads to risk-free rates continue to illustrate the sector’s attractiveness despite some more recent increases in bond yields. Given this, we believe the potential for further yield compression is less likely, and we forecast a stable outlook on pricing throughout 2022.”

Imagine all the people… living life in the Metaverse. Once we immerse ourselves in the digital sphere, gold may go out of fashion. Or maybe not?Do you already have your avatar? If not, maybe you should consider creating one, as the Metaverse is coming! What is the Metaverse? It is a digital, three-dimensional world where people are represented by avatars, a network of 3D virtual worlds focused on social connection, the next evolution of the internet, “extended reality,” and the latest buzzword in the marketplace since Facebook changed its name to Meta. If you still have no idea what I’m talking about, you can watch this or just Spielberg’s Ready Player One.The idea of personalities being uploaded online is an intriguing concept, isn’t it? In this vision, people meet with others, play, and simply hang out in a digital world. Imagine friends turning group chats on Messenger or WhatsApp into group meetups in the Metaverse of family gatherings in virtual homes. Ultimately, people will probably be doing pretty much everything there, except eating, sleeping, and using the restroom.Sounds scary? For people in their 30s and older who were fascinated by The Matrix, it does. However, this is really happening. The augmented reality technology market is expected to grow from $47 billion in 2019 to $1.5 trillion in 2030, mainly thanks to the development of the Metaverse. China’s virtual goods and services market is expected to be worth almost $250 billion this year and $370 billion in the next four years.In a sense, it had to happen as the next phase of the digital revolution. You see, we now experience much of life on the two-dimensional screens of our laptops and smartphones. The Metaverse moves us from a flat and boring 2D to a 3D virtual universe, where we can visualize and experience things with a more natural user interface. Let’s take shopping as an example. Instead of purchasing items on Amazon, customers could enter a virtual shop, see and touch all products in 3D, and buy whatever they wanted (actually, Walmart launched its own 3D shopping experience in 2018).OK, we get the idea, but why does Metaverse matter, putting aside sociological or philosophical issues related to transferring our minds into the digital world? Well, it might strongly affect every aspect of business and life, just as the internet did earlier. Here are a couple of examples. Famous brands, like Dolce & Gabbana, are designing clothes and jewelry for the digital world. Some artists are giving concerts in virtual reality. You could also visit some museums virtually, and instead of taking a business trip, you can digitally teleport to remote locations to meet with your co-workers’ avatars.Finally, what does the Metaverse imply for the gold market? Well, it’s difficult to grasp all the possible implications right now. However, the main threat is clear: as people immerse deeper and deeper into the digital world, gold could become obsolete for many users. Please note that cryptocurrencies and non-fungible tokens (NFTs) are and will continue to be widely used as payment methods in the Metaverse.However, there are some caveats here. First, the invention and spread of the internet didn’t sink gold. Actually, the internet enabled gold to be widely traded by investors all over the world. Just take a look at the chart below. Although gold was in a bear market in the 1990s and struggled during the dot-com bubble, it rallied after the bubble burst.Second, the digital world didn’t kill the analog reality. Despite digital streaming of music, vinyl record sales soared last year, reaching a record high in a few decades. The development of the Metaverse could trigger a similar backlash and a return to tangible goods like gold.Third, some segments of the Metaverse look like bubbles. Maybe I’m just too old, but why the heck would anybody spend hundreds of thousands, or even millions of dollars to buy items in the virtual world? These items include virtual real estates (CNBC says that sales of real estate in the metaverse topped $500 million last year and could double this year), digital pieces of art or even tweets (yup, the founder of Twitter sold the first tweet ever for just under $3 million)! It does not make any sense to me, as I can right-click and download a copy of the same digital files (like a PNG file of a grey pet rock) for which people pay thousands and millions of dollars.Of course, certain items could increase the utility of the game or virtual experience, but my bet is that at least some buyers simply speculate on prices, expecting that they will be able to resell these items to greater fools. When this digital gold rush ends – and given the Fed’s tightening cycle, it may happen in the not-so-distant future – real gold could laugh last.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.

Photo Credit: Marco Verch Professional Photographer || With some private investments, you can’t tell what the value truly is. Third party professional help occasionally assists dishonesty Part of my career was based on concealing volatility. I sold Guaranteed Investment Contracts. I helped design and manage several different types of stable value funds. Life insurance contracts get valued at their book value, regardless of what the replacement cost of an equivalent contract would be like presently. Anytime an investment pool with no current market price has a book value above the underlying value of the investments that it holds, there is risk to those holding the investment pool. The amount of risk can be small yet significant with some types of money market funds. It can be considerably larger in certain types of pooled investments like: Various types of business partnerships, including Private REITs, Real Estate Partnerships, Private Equity, etc.Illiquid debts, such as private credit funds, and notes with limited marketability, whether structured or not.Odd mutual funds that limit withdrawals because they offer “guarantees” of a sort. That applies to Variable Annuities with riders offering guaranteed benefits, if the life insurer becomes insolvent.One-off investment liquid partnerships that are secretive and unusual, like Madoff. The underlying may be illiquid, but the accounting may be fraudulent. Or, the accounting may be fine, but the assets listed are not what is in custody. (With small funds, analyze the auditor, trustees, and custodian.)The value of a company touted by a SPAC promoter may be worth considerably less than what is illustrated.Any investment in public equity or debt pool where the positions are concentrated, and they own a high percentage of the float, or a high amount of the securities relative to the amount that gets traded in an average month. Think of Third Avenue Focused Credit, or Archegos. I have consistently encouraged readers to “look through” their pooled investments, and consider what the underlying is worth. If you only have a vague idea of what the underlying investments are, look at their public equivalents. A rising tide lifts almost all boats, and a falling tide does the opposite. There is a conceit within private equity, private credit and private real estate funds that they are less risky; there is no volatility, because we cannot produce an NAV. They have the same volatility as the publicly traded funds, but the volatility is concealed. If trouble hits the public markets 50-75% of the way through the life of a private fund, it will have difficulty selling their investments at levels anywhere near the book value previously claimed by the sponsors. With consent of the limited partners, perhaps they extend the life of the fund to try to recover value, but that also imposes an opportunity cost on holders who were expecting proceeds from the fund on schedule. Remember as well that in a scenario like 1929-1932, private funds will be wiped out with similarly leveraged private funds. Aleph Blog has consistently warned about the possibility of depression, plague, war, famine, bad monetary policy and aggressive socialism. We have gotten plague, war, and bad monetary policy. Famine in a sense may come from the Ukraine war and trade restrictions on Russia, at least for the African countries that buy from them. Thus I encourage readers to avoid private investments that promise no volatility, like the stupid ads for Equity Multiple that run on Bloomberg Radio. All investments involve some type of risk. Just because you can’t or don’t measure the risk doesn’t mean that there is no risk. Don’t listen to investment sales pitches which tell you to avoid the volatility of the public equity and debt markets, when they are taking the exact same risks in the private market, and they cannot or will not measure the risks for you, no matter how thick or thin the “disclosure” document is. There is no significant advantage in the private market over the public market. Indeed, the reverse may be true. (Yes, I meant all of the ambiguity there.) Look to the underlying, and invest accordingly. Look at fees, and try to minimize them. Prize transparency, because it reduces risk in the long run. Those who are honest are transparent.

Following a change to its investment model, the ORPEA Group - the European market leader in long-term care and rehabilitation - has decided to restructure its project portfolio in the largest Polish cities, which was built for its planned expansion. According to real estate advisory firm Savills, which has been instructed to search for investors, the portfolio comprises some of the most attractive development sites available in Poland. “The decision to restructure our portfolio follows the change to the financial strategy of the ORPEA Group and will not affect our Care Homes and Rehabilitation Clinics in Poland. Their residents and patients may feel assured that we will continue to provide the highest service quality to best respond to the needs and requirements of the people we help every day,” says Beata LeszczyÅ„ska, President of ORPEA Polska. Six projects at various development stages will be marketed - from sites with building permits through to senior housing facilities under construction. They are located in Warsaw, Gdansk, PoznaÅ„, Krakow, Łódź and Konstancin-Jeziorna. The central locations and zoning status of most of them also allow for developing PRS, office or PBSA projects. “The development projects, which the ORPEA Groups has decided to market, are in prime locations. We have teamed up with the owner to look for investors interested in purchasing both the entire portfolio and single assets. The plots were acquired for senior housing projects with a potential of up 1,000 beds, but they also allow for other commercial uses, including residential. Valid building permits are an additional advantage as they can significantly expedite the development process,” says Jacek KaÅ‚użny, Associate Director, Residential Capital Markets, Savills Poland. Savills, an adviser to ORPEA Polska on the process, has a strong track record in alternative real estate including PRS, PBSA and senior housing. -ends- For further information, please contact: Jan Zaworski, Savills Press Office Tel: +48 666 363 302 Marcin Steinborn, Savills Press Office Tel: +48 504 622 772 Founded in the UK in 1855, Savills is one of the world's leading property agents with 600 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East offering a broad range of specialist advisory, management and transactional services. Should you not wish to receive Savills press releases, please email us at: kontakt.rodo@savills.pl. Click here for our Privacy Policy.

PRESS RELEASE Warsaw, 31.01.2022 Bartłomiej Zagrodnik, Managing Partner/CEO of Walter Herz In the upcoming time, modern workplaces, full of new technologies and creating a friendly environment for users, will gain more and more importance. Office buildings operating in accordance with ESG principles, new environmental, social and corporate governance, especially those located in the city centers will take the leading position. Further changes on the office market will be largely determined by the pace of adaptation of the hybrid work model in companies. If we look at today's market, we can see that hybrid work is slowly becoming the norm. Companies are open to this model, which is related to the preferences of employees, who more and more often expect employers to be more flexible in the choice of the form of work and working hours. Many young people base their interest in the job offer and the willingness to take part in the recruitment on it. Therefore, in the upcoming years, offices will evolve into spaces adapted to the rotational work model. Clearly, it is not possible to introduce a division into remote and office work in all sectors. However, for example, in the area of IT, finance, administration and accounting, or services for business, marketing, customer service and HR, we can expect a gradual spread of the hybrid work model. Flexible rental option In the upcoming years, some companies will probably decide to reduce the amount of office space they occupy. Although the scale of this phenomenon so far, contrary to appearances, is not as large as it may be assumed, the tendency is visible. Certainly, tenants will also look for increasingly flexible solutions, thanks to which they will be able to use office space in many ways, adapting it on an ongoing basis to the changing needs of the company. The number of companies that will decide on the core & flex option, assuming a combination of traditional space and the use of flexible space, will increase. This direction in the selection of space for work by entrepreneurs is noticed by the owners of office real estate, who include flexible spaces in the pool of amenities in their buildings. It is also grist to the mill to the companies offering flex space. The segment is systematically growing. This year, more coworking spaces are scheduled to be opened all over Poland. It is likely that an increasingly popular option will also be subscriptions to access coworking networks with space available in various locations. It should be noted that buildings located in central parts of the cities are now even more popular than before. This is visible in, for example, last year's lease structure in Warsaw, where most of the leased space was located in the city center. The offices themselves are also changing. Their space is even more adapted to interactive group work. It gains open space, which, with low office occupancy, gives employees a sense of greater comfort. At the same time, access to quiet working areas and social areas is also important. New investors We are glad that many entities are planning to enter the Polish market. It will result in spaces potentially reduced by some industries, gaining new occupants. One of the main sectors that has been dynamically developing in Poland for years, and is the tenant of a large part of offices is the industry that provides modern services for business. Growing employment in this segment is related to the constant influx of new investors to our country and the development of organizations already present on the Polish market. Large-scale recruitment is taking place in the sector. Most jobs are offered today by companies from Great Britain, Switzerland, the Netherlands, Belgium and Germany, which have recently decided to transfer their services to our country. Sector companies are constantly opening new recruitment processes, but there are fewer candidates than job positions. Also in this industry, the expectations of employees and employers differ. Most of the employees, who are generally flooded with job offers, expect to work in a hybrid or fully remote system, while the employers want to return to the offices. I believe that this year we can expect more tenant activity, which will translate into a decline in the office vacancy rate in the country. Across the world, we can already observe a great return to offices. Symptoms of the reversal of the downward trend in the office sector could already be observed on our market in the last quarter of 2021. In Warsaw, in the last three months of last year, tenant activity returned to the level seen before the pandemic. Only the fourth quarter of last year was responsible for as much as 40 per cent of space leased on the Warsaw market throughout all of 2021. Last year, the demand for Warsaw offices reached almost 650 thousand sq m. of space, while almost 325 thousand sq m. of new offices were launched onto the market. Almost 80 per cent of the commissioned space is located in the center. Similarly, most of the contracted offices are located centrally. Demand is rising, supply is dropping Unfortunately, most office investments are still frozen. Developers are cautious about building new projects. In Warsaw, half as much office space is under construction compared to 2019. Investments are being slowed down by the rapidly growing costs of real estate development, amidst unstable market conditions. If the situation does not change and new projects are not launched in the next 2-3 years, we may have a shortage of space in the main office markets in the country. On the other hand, the activity of investors is growing, but they have more and more requirements in terms of the quality of buildings, including ESG. There is a growing demand for modern office buildings that meet restrictive requirements related to ecological parameters, located in the largest cities in the country. The estimated value of the transaction volume on the investment market in Poland in 2021, is similar to the level achieved in 2020. However, we expect an increase in the dynamics of the investment market in the upcoming months and a greater inflow of capital to Poland. There are many transactions concerning projects from the office segment that have recently entered the market that are being negotiated nowadays, therefore this year should bring an improvement in results. Critical ESG ESG issues will be of key importance for investors' decisions. It is not only about the growing general awareness of sustainable development and the impact of construction and buildings on the environment, but also about the adopted requirements and the related need to report on ESG activities. Investment strategies will be closely connected to the acquisition of assets and cooperation with companies that offer a product that meets environmental requirements. It will have a significant impact on the real estate market in the upcoming years and the value of assets. Investors and tenants will expect low-emission office buildings, or plans to achieve that goal. Facilities offering solutions in the area of ​​climate technologies will gain a competitive advantage. Trends related to the certification of buildings in terms of user-friendly impact and guaranteeing their full safety, will also become stronger. About Walter Herz Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects. In addition to its headquarters in Warsaw, the company operates in Cracow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

Korea’s high level of household debt has been regarded as a major risk factor for the economy for some time. We have taken a closer look at the issue and concluded that deleveraging with interest rate hikes would be painful and likely result in an economic downturn – but not an economic crisis House prices in South Korea have risen rapidly in recent years. Pictured: Seoul Korea's household debt Korea’s high level of household debt has been regarded as a major risk factor for the economy for a considerable time. During the pandemic, household debt rose even more steeply thanks to accommodative macro policies. However, since August 2021, the Bank of Korea (BoK) has raised rates by a total of 200bp, and we expect it to raise at least another 50bp by year-end. In addition, fiscal policy is expected to normalise from next year. The basic theory in economics that tight monetary and fiscal conditions burden consumption and investment and cause financial deleveraging remains valid. Considering the highly indebted Korean household situation, we think that even at the expense of short-term growth slowdowns, orderly deleveraging is essential, which will do good for long-term growth. So far, households have tolerated interest rate hikes and high inflation relatively well mainly on the back of the reopening of the economy, fiscal support, and improved income conditions, but a meaningful deterioration of consumption is expected from the end of this year. As the deleveraging of household debt is expected to accelerate from the current quarter, GDP growth is also likely to slow significantly. It is true that some aspects of household debt are riskier than others. A tight monetary policy will likely dampen private consumption eventually and trigger asset price adjustments in the short term. However, we still believe that the systemic risks posed by household debt do not appear imminent. First, financial intermediaries and financial regulators have appropriate risk management systems in place; second, the Bank of Korea began to preemptively raise the policy rates last year; and lastly, policy assistance to alleviate the debt repayment burden is also planned. Let’s take a detailed look at household debt in Korea and examine the risks associated with it. Household debt has remained very high and grown rapidly The financial liability of household and not-for-profit organisations has more than doubled over the past decade. According to the Bank of Korea, the amount of financial liability in 2021 increased by 9.5% year-on-year to KRW 2,245tr, exceeding the nominal GDP growth rate of 6.7% and reaching 108% of GDP. Looking at the composition of household credit, mortgage loans account for about 53% of the total, personal loans 41%, and merchandise credit 6% as of June 2022. Over the past few decades, the fastest and largest growing segment of household credit has been mortgages, primarily driven by rising real estate prices, while personal loans have also surged in the last couple of years, aided by easing monetary policy and increasing leveraged investment. On the other hand, merchandise credit, which includes credit card purchases for goods and services but excludes card loans and cash advances, grew at a pace similar to the nominal GDP growth.   Household debt remained very high and grew rapidly Source: CEIC, KOSTAT   Historical data shows that debt growth tends to decelerate during policy rate hikes and the latest data confirms that this negative correlation holds in the current hike cycle. We expect the negative correlation to strengthen even more in the coming months due to the faster pace of rate hikes this year compared to past hiking cycles. Mortgages account for the largest amount of household credit, while personal loans are most sensitive to the rate changes Source: CEIC, KOSTAT Mortgage loans account for more than half of total household credit As of 2022 June, the total amount of mortgage loans stood at KRW 1,001.3tr, accounting for about 53% of total household credit. The level of mortgage debt is relatively high compared to other countries and the unique feature of the Korean rental system, Jeonse (about 64% of the house price for a two-year rental deposit, for more detailed information on Jeonse please click here), is a major contributing factor, in our view. Various sources confirmed that it is estimated that about 25% of the total mortgage loan is for Jeonse deposit and the rest is for the home purchase. The financial authorities have been encouraging banks to lend their Jeonse funds, judging that Jeonse contributes to the housing stability of middle and low-income households, so the number of Jeonse loans has grown steadily over the past few decades. Korean house prices have risen in tandem with other major economies It is not unique to Korea that house prices have risen rapidly in recent years. This has been a common phenomenon seen in other OECD countries such as the US, Europe, and Australia due to the accommodative monetary environment. In the case of Korea, the previous government’s policy to curb real estate prices is centred on suppressing housing demand. However, under such an abundant liquidity market environment, conflicting policy implementations stimulated demand for housing in certain areas (Metropolitan areas such as Seoul), resulting in a sharp rise in house prices. The booming real estate market is a global phenomenon Source: CEIC, OECD   To curb sharp rises in house prices, the government has tightened terms for mortgage loans more stringently since 2020. For home purchases, the loan-to-value (LTV) ratio in speculative overheated districts (basically, the entire area of Seoul) was lowered from 80% to 60%, and then again to 20-40%, and loans for a house value of KRW 1.5bn or more were not available at all. Eventually, with these stringent lending conditions at work, the growth of mortgage loans began to decelerate from last year, and this year the slowdown has been accelerating due to rapid rate hikes and growing concerns over valuations. As forward-looking data points to further price corrections, along with the continuing high-interest environment, mortgage loans will grow at a slower pace in our view. Read this article on THINK TagsSouth Korea Mortgages Household debt Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  European equities have been split into two parts with the energy and defensive sectors holding up well while consumer discretionary, real estate, and information technology stocks have been hit hard this year from higher interest rates and galloping energy costs. We remain defensive on equities overall, but in our equity note today we highlight the themes we like including the equity factor quality which we believe will see less margin compression than the weaker companies with less strong balance sheets and operating metrics. Investors are running away from real estate, IT and consumer discretionary stocks European equities are down 12.1% this year which given an economic slowdown and historic energy crisis pushing up cost-of-living is quite acceptable. One reason why it has not been such a bad year after all, is that the energy sector is 35.5% this year and the European equity market is heavy on consumer staples and health care stocks which have also done well. Despite some utilities are being thrown a lifeline by European governments, the overall utility sector has held up well offering its defensive qualities. The real damage this year has been in real estate as yields have surged pushing up mortgage costs. Quite stunningly, the European real estate sector is now down 24% over the past 5 years offering no income for its investors. With financial conditions set to tighten significantly from here to cool down inflation the sector is likely going to face more headwinds. The IT sector is still interest rate sensitive through higher bond yields and the share price declines have put pressure on operating costs as the value of employee stock options has fallen. Finally, the consumer discretionary sector is hard hit by the cost-of-living crisis as we also described in our recent equity note Consumer stocks to be hit by historically high energy costs. Regular readers of our research will know that we are still positive on commodities with energy being the main driver of returns and other tangible-driven themes such as defence, logistics, and renewable energy. Across equity factors we urge investors to seek defensive characteristics in high quality companies as they will be forced to eat less into their operating margins than the weaker players in the different industries. The 10 largest holdings in the iShares Edge MSCI Europe Quality Factor UCITS ETF are listed below. These names are not investment recommendations, but simply names that are part of the quality theme, which can be defined in many ways. One main risk for the quality factor is that these stocks come with high equity valuations and thus are a bit more interest rate sensitive than the average European stock. Novo Nordisk Roche In this ASML LVHM Nestle Rio Tinto Unilever Diageo Allianz Finally, it is important to reiterate our base case scenario. We remain defensive and expect the global equity market to correct around 33% from its peak before we have found a bottom. This view is driven by our view that inflation will be structurally higher than in previous periods due to deglobalization and operating margins will come under pressure from higher wages and higher yields. Source: https://www.home.saxo/content/articles/equities/the-european-equity-landscape-amid-the-energy-crisis-06092022

There are more risks emerging from China's economy: Covid, real estate, regulations on the internet industry and the recent drought. These have resulted in a high jobless rate and lower wages. The central government believes that local governments can help restore growth  In this article The economy is facing many headwinds Real estate is still the main problem Local governments to the rescue? The economy is facing many headwinds These are tough times for China. Covid-19 – and the government's tough approach to any new outbreaks – continues to be a drag on the country's economy, notably in the leisure and travel sectors. Real estate is of growing international concern and there are real worries of a major crash; confidence in the sector has nose-dived as many developers go bankrupt. We still have no update on the completion rate of uncompleted residential projects after funds were allocated for these projects. In addition, severe droughts have led to electricity shortages, notably in western China. On top of this, there are now even more regulations in place for the internet sector. All of this is bad news for the jobs market. Labour demand is not recovering as fast as we had thought it would, and wages seem to be coming down in some important industries, including technology. Real estate is still the main problem The financial difficulties of residential property developers have come to the public's attention and some mortgage borrowers have requested delays to repayments on uncompleted residential property sites. Cash tightness is the main characteristic of financially weak property developers, meaning they do not have enough cash to pay their suppliers and complete projects. The government does not appear to be giving up on deleveraging reforms. Funds are being pooled by policy banks and the central bank in China, and there is also some support from local governments where the uncompleted projects are located. But these support measures are only to be used to finish uncompleted projects so that mortgage borrowers will continue to repay the banks. It could take several quarters to see a positive effect from the announced measures, and it could take years to finish all of the uncompleted projects. China's surveyed jobless rate   Source: CEIC, ING Local governments to the rescue? The risks we mention affect the job market negatively. The surveyed jobless rate in urban areas was 5.4% in July 2022, compared to the recent low of 4.9% in September and October 2021. Migrant workers have been hardest hit as they're predominantly employed across the construction industry's value chain, including raw material mining and processing.  The jobless rate might not fall back to 4.9% without further fiscal stimulus. But what kind of stimulus can quickly stop the economic slowdown? The central government believes that local government officials have the answer. Recently, it explicitly pressured all local governments to stimulate their local economies. Some could hand out consumption subsidies and others could speed up the construction of infrastructure. These measures should at least stop the GDP growth rate from falling towards 2% (our forecast is 4%) in 2022.  We believe that pressing local governments can help, especially given the timing (just before the 20th Party Congress in October). Those who can prop up their local economies without giving up long-term investment plans might be able to advance their careers in the 20th Party Congress.     Real estate Jobs GDP growth China Source: https://think.ing.com/articles/hold-monthly-local-governments-could-save-the-economy/?utm_campaign=September-01_hold-monthly-local-governments-could-save-the-economy&utm_medium=email&utm_source=emailing_article&M_BT=1124162492   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

US: Housing Starts rise by 12.2% in August, Building Permits fall by 10% Housing Starts in the US rose sharply in August. US Dollar Index holds in positive territory above 110.00. The monthly data published by the US Census Bureau revealed on Tuesday that Housing Starts rose by 12.2% in August following July's10.9% contraction. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM On a negative note, Building Permits declined by 10% in the same period.  "Single‐family authorizations in August were at a rate of 899,000; this is 3.5% below the revised July figure of 932,000," the publication read. "Authorizations of units in buildings with five units or more were at a rate of 571,000 in August." Market reaction The US Dollar Index preserves its bullish momentum and was last seen rising 0.48% on the day at 110.12.

CEE Property Forum 2022 in Vienna - echoes, moods and investment trends Avison Young participated in CEE Property Forum 2022, which has just ended in Vienna. Unfortunately, the mood at the event hardly indicated great optimism among the market players. This year has brought unprecedented challenges to the real estate sector. We are in the place where investors mostly monitor the market instead of taking actual actions. Annually, the fourth quarter of the year has been a typical period of closing investment transactions. This year, however, since the outbreak of the conflict in Ukraine, when it comes to initiating new projects, the activity of investment entities has practically been frozen. Not enough transactions have been launched in the second and third quarters to see plenty finalizations by the end of the year. Therefore, both the year-end and the whole 2022 is not expected to be spectacular in terms of investment volume. And new reports from Russia do not help – they fuel the state of anxiety and maintain the status quo for new investment projects. The potential escalation of the conflict in Ukraine and the inevitable energy crisis are effectively dampening the willingness to take actions in all investment circles. Avison Young estimates that the investors’ conservative approach is likely to last for months, and actions taken will be selective and profiled. The entities that are forced to maintain the annual target at a certain level will be among those that are most likely to execute and close transactions. A strategic aspect of investing in such an uncertain market and with rising interest rates is the availability and cost of financing of commercial products. The yields are increasing for sure, which is mostly visible in the warehouse segment. Another difficult time will be the first quarter of 2023, a period of rents’ indexation, which will require a balanced dialogue between property owners and tenants. Bearing in mind the anticipated, drastic increase in operating costs, it should be expected that the most difficult talks are yet to be initiated. Today, the quality of the property is more important than ever. Compliance with environmental, social and governance (ESG) regulations is at the forefront, in particular in terms of energy consumption, but also in terms of shaping investment decisions. The key to the ESG strategy is the ability to improve the energy efficiency of properties. We will be observing enhancement of this trend in the upcoming years. The green revolution in real estate is already bringing tangible, financial results for tenants, but at the same time it requires higher construction and renovation costs, which will probably translate into an increase in rents in new facilities, as well as the modernized properties. Author: BartÅ‚omiej Krzyżak, Senior Director, Investment at Avison Young

The economy has recovered slightly due to more flexible Covid measures. But the real estate crisis will put pressure on economic growth if home sales do not pick up. Infrastructure stimulus has yet to impact growth as local government spending has been split between finishing uncompleted homes and infrastructure investment In this article China finally show signs of a slight recovery Real estate crisis Double whammy is coming Source: Shutterstock China finally show signs of a slight recovery More flexible Covid measures have resulted in shorter quarantine periods and more localised lockdowns, which have had less impact on the labour force than the measures imposed a few months back. Consumers have shown a willingness to buy electric vehicles with government subsidies, and are also eating out more. But they are still reluctant to buy luxury items. Overall, retail sales grew 5.4% year-on-year in August after 2.7% growth in July. Industrial production also picked up to 4.2% YoY in August from 3.8% in July as more flexible Covid measures enabled more people to go to work. As such, the People's Bank of China did not cut interest rates in September.  China retail sales show recovery Source: ING, Bloomberg Real estate crisis In the real estate market, some local governments have been pairing with property developers to finish uncompleted projects. But an improvement in market sentiment will only happen if some of the larger projects are finished to a high standard. Home buying activity should then pick up. The market is now seeing genuine demand. The government is trying to fully unleash this demand by implementing policies such as cutting taxes for home upgrades. There are also policies for first-time buyers with lower mortgage rates. This fresh demand seems to be re-activating existing home sales, which were sluggish in the past due to a lot of new builds coming onto the market. This shift could reduce demand for new homes as buyers may worry that houses bought off-plan may not be completed. This, in turn, does not help housing starts. But at least some buyers are back in the market. The long delay of fiscal stimulus Facing both a Covid crisis and a real estate crisis, local governments with limited fiscal resources have had to prioritise what to deal with first. For most of them, the more urgent problem has been the stagnation in housing starts - and thus the drop in land auctions, which have traditionally provided local governments with the revenue they need to run their governments properly.   This explains the delay in infrastructure projects even as local government special bonds have been issued for this year. Even though the central government has called for an increase in infrastructure investment, only a few local governments have actually accelerated spending and they are mainly investing in existing projects, not new ones.  Source: ING, CEIC Double whammy is coming External demand could be weaker in 2023. If the real estate crisis and decisions over Covid measures cannot be resolved (at least partially) China could face a tough year ahead, especially in manufacturing.  TagsReal estate Infrastructure Covid-19 lockdowns China  

Today we take a look at real estate risk in UBS the 2022 Global Real Estate Bubble Index, the ecosystem situation and other news. We will also look at the expert commentary Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver.  In this article: Companies' stocks rising Biodiversity Situation 2022 Global Real Estate Bubble Index Thoughts by Jim Cramer New Netflix's plan Post-pandemic problems of companies Morgan Stanley tweets about companies' inventory rising. The discussion was attended by Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver.   As consumption of goods slows post COVID, companies are experiencing a build up in inventory that could have far reaching implications. Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver discuss. https://t.co/cYXO15cG0n pic.twitter.com/XZbanoplvX — Morgan Stanley (@MorganStanley) October 13, 2022 The pandemic situation negatively affected many industries, individuals and the entire economy. Also, the current post-pademic situation is not positive. Currently, the global problem is blowing inflation, which negatively affects the situation of companies. Another problem is the increase in inventories in warehouses. Product stored for a long time may lose its substance, and the inability to travel causes a reduction in production. Firms will begin to struggle with higher maintenance costs, which can result in job cuts and, in the worst case, even closings. Eyes on biodiversity Credit Suisse in its last tweet addresses the topic of the poor condition of the biosphere.   Biodiversity is being increasingly threatened, with up to one million species at risk of extinction. The reasons include climate change, pollution and deforestation. Read more about why climate change matters for biodiversity: https://t.co/C1UDMqGsap pic.twitter.com/2CNYsuypox — Credit Suisse (@CreditSuisse) October 13, 2022 Biodiversity is important to the entire ecosystem. This ensures that the float chain is in balance and that the ecosystem situation is also stable. We have been struggling with a significant climate change for several decades, many species are already extinct. Humanity that has caused this must take action to prevent an ecological catastrophe. Raising awareness about this is very important, because making individuals aware that action, even small, can save the ecosystem. Which cities may be at risk of a real estate bubble UBS in its tweet informs about the 2022 Global Real Estate Bubble Index.   Our 2022 Global Real Estate Bubble Index is out. Read the full report and find out if your city is at risk of a property bubble. https://t.co/b4s39M0nGz #GREBI #ShareUBS pic.twitter.com/g6hINxpLPI — UBS (@UBS) October 13, 2022 The economic situation in the world is tense. Inflation causes economies to lighten or fall into recession. The staggering state of economies affects individual industries, sectors including the real estate sector. Indeed, the property market has long been supported by central banks. Ultra-low financing conditions and demand outpacing construction have led to increasingly optimistic price expectations among buyers. Current rise of Interest rates—and in turn, financing costs—have climbed in recent months to combat elevated inflation. Consequently, the willingness to pay for owner-occupied homes is likely to take a hit. In its report, UBS makes it possible to get acquainted with the situation on the real estate market in individual cities. Expert opinion on several shares Mad Money On CNBC tweets Jim Cramer's thoughts on Tellurian, Zoetis, and more.   .@JimCramer also gave his thoughts on Tellurian, Zoetis and more. https://t.co/vpuGg6Y6vq — Mad Money On CNBC (@MadMoneyOnCNBC) October 13, 2022 The expert looks at the shares of several companies and expresses his opinions. Knowing an expert's opinion on share prices is important for investors in the current climate. This allows you to give a fresh perspective on these companies. Netflix's plan with ad FXMAG on its Twitter feed informs about CNBC's comment about the ad-powered Netflix's plan.   @CNBC has just commented on the “ad-powered” $6.99/mo @netflix’s plan #StockMarkets https://t.co/fMTV5tigCF — FXMAG.com (@FXMAG24) October 13, 2022 Netflix is very popular. It offers three possible plans. Recently, he announced that there will be a plan powered by advertisements. This plan may turn out to be cheaper. The question arises whether it will enjoy popularity, whether people will opt for the cheaper version of the ad, and whether they prefer to pay more to avoid advertising. Doing so can also be a trick for subscribers to decide to pay more for ad-free viewing comfort, but it can also be an option for people who prefer to save money and watch their favorite games on a platform.

Incoming data from the U.S. economy seems to indicate that the Fed's earlier interest rate hikes may already be hinting at a slowdown. It’s about a slowdown in industry, as well as in the real estate market, where negative surprises seem that have emerged. These could lead to a slowdown in the pace of hikes by the Fed, which is what the market seems to be hoping for at the moment. Worse situation in US manufacturing S&P Global US Manufacturing PMI data released this week showed a reading of 49.9 points in October 2022, compared to 52 in September, and was below market forecasts of 51 points. A reading below 50 points, according to the survey's methodology, signifies a contraction in the manufacturing sector, the first time this has happened since June 2020. New orders fell, signaling a possible drop in demand, with manufacturers stressing that high inflation and inventory build-up from earlier in the year may be contributing to this. The rise in the value of the dollar also caused export demand to fall at the fastest pace since May 2020. Meanwhile, employment grew at a slower pace. In addition, production costs accelerated after a four-month period of mild inflation, mainly due to material shortages and higher wages. Looking ahead, price pressures and expectations of higher interest rates caused sentiment in the industrial sector to deteriorate, the Markit Economic survey showed. Weakening real estate market in the United States The 20-city house price index measured by the S&P CoreLogic Case-Shiller in the US rose 13.1% y/y in August 2022. Thus, the house price growth rate was the lowest since February 2021 and below forecasts at 14.4%. This also marks the fourth consecutive month of slowing house price growth in the United States. All 20 cities posted lower price increases in August, with Miami (28.6%), Tampa (28%) and Charlotte (21.3%) posting the highest year-over-year increases, while San Francisco (5.6%), Washington (7.4%) and Minneapolis (7.6%) posted the lowest. Meanwhile, the National Composite Index rose 13% in August, down from 15.6% in July, the biggest slowdown on record. Given the continued outlook for a challenging macroeconomic environment, home prices may continue to slow," said Craig J. Lazzara, Managing Director at S&P DJI as quoted by tradingeconomics. Source: Conotoxia MT5, USDIndex, Daily The dollar exchange rate seems falling Since the beginning of the week, in fact l since Friday and the possible intervention of the Japanese authorities, the dollar exchange rate seems to be falling. On Wednesday morning, the USD index slipped below the 111-point level. After falling 1% during the previous session. The USD's weakness may be due to the market's growing conviction that the US Federal Reserve would be less aggressive in the coming months. After a widely expected 75-basis-point rate hike in November, Fed officials are probably considering a smaller hike in December amid concerns about excessive monetary tightening, WSJ reported. The aforementioned weaker U.S. data this week, signaling that previous rate hikes may have already had an impact on the economy, seem to support such a view. It also appears that countries such as Japan and China are fed up with a strengthening US dollar. The former has already been expected to intervene twice in the forex market, while the latter was expected to intervene yesterday. As Reuters reported, China's major state-owned banks have been selling U.S. dollars on both the domestic and foreign markets to support the weakening yuan. Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Industrial production and fixed asset investment growth in October are in line with the consensus forecasts. But retail sales were weaker than expected and in contraction. The recent easing of Covid measures could be a critical factor for retail sales to return to positive growth Retail sales in contraction in October but should pick up with eased Covid measures Industrial production grew 5.0%YoY and fixed asset investment grew 5.8%YoY YTD. Both data are in line with consensus forecasts. But retail sales contracted by 0.5%YoY, which is surprising. Within the total for retail sales, sales that are related to moving into a new home, namely consumer electronic goods, decorations and furniture, contracted 14.1%YoY, 8.7% and 6.6%, respectively. It also looks as if consumers were reluctant to upgrade telecommunication devices. Sales of these contracted by 8.9%YoY. Catering in October contracted by 8.8%YoY. In contrast, medicines and fresh food grew 8.9%YoY and 8.3%, respectively. Spending on automobiles grew at 3.9%YoY benefiting from government subsidies. The picture shows that Covid measures in October affected consumer behaviour even though it was a month containing long holidays.  Covid measures were eased on 11 November, which should help retail sales to recover moderately.  Details in fixed assets investment shows advancing technology in progress Among all the components of fixed asset investment, electronic machinery and equipment increased the most, rising by 39.7%YoY YTD. This implies that the government's call for advancing technology is progressing.  But, infrastructure investments in railways declined by 1.3%YoY YTD, indicating that local governments continued to focus their efforts on helping uncompleted residential property projects rather than committing to transportation infrastructure projects.  We believe that local governments will continue to focus on uncompleted residential property projects until they have successfully turned around enough units that public anxiety about this sector eases. Semiconductor production shrank even though overall industrial production expanded Integrated circuits contracted 26.7%YoY, the biggest contraction among all items in industrial production. Integrated circuits represent the biggest share of exports in China. It is an indicator of global economic growth.  The big contraction in this item gives us an important signal that the external environment for China is slowing, and will affect exports and related manufacturing activity as well as the jobs market and wages in the manufacturing industry. With policies in place, exports should be the main concern The recent easing of Covid measures should be positive for retail sales and therefore some service sectors. Local governments should be able to finish some uncompleted home projects with preferential policies on bank lending to developers. As such, uncertainties for next year should be more on the export sector than the domestic market.  TagsSemiconductors Retail Real estate Infrastructure China   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Clarion Partners believes that investors, in 2023, should take a long-term view of commercial real estate during this period of uncertainty. As the Federal Reserve (Fed) aggressively tightens financial conditions to curb inflation, we believe 2023 will be challenged, given high interest rates and the risk of a recession. There are still significant positive tailwinds, however. National consumer spending, labor markets, business activity, corporate balance sheets and the banking system have all continued to be relatively healthy, with much lower leverage than before the global financial crisis (GFC). Depending on how quickly inflation will respond to the Fed’s tightening, several possible economic scenarios could play out over the next year or two. Nonetheless, we do not believe that the coming downturn will be as severe as the GFC. Moody’s Analytics’ baseline forecast for US economic growth is generally positive, with an expected creation of 6.6 million new jobs from 2022 to 2024. Historically, US commercial real estate (CRE) investment performance has reacted favorably in periods of rising interest rates.1 Because of strong job growth and overall demand for commercial space, property cash flows have remained relatively healthy. While some property sectors, such as office and mall, have not fully recovered from the pandemic impacts, other property sectors, like industrial, apartment, life sciences and self-storage, have reported sizable ongoing rent growth. In addition, there is a manageable level of new supply, especially since elevated construction costs and supply chain disruptions present additional headwinds for new development projects. Geographically, high-growth markets with thriving industries, business-friendly policies, and strong demographics have also seen robust investment performance given the strength of underlying demand fundamentals. Steady migration and corporate relocations have led to outperformance in many Sun Belt metros and select, premier suburban areas. Read next: UK Santander Bank Fined USD 132 Million, Idris Elba in Cyberpunk 2077:Phantom Liberty| FXMAG.COM The combination of higher inflation and rising interest rates will likely have a material yet varied impact on the US CRE market in 2023. There have been some disruptions across real estate debt and equity capital markets. Ten-year financing costs have risen by approximately 200-250 basis points2 year-to-date3 (through mid-November in 2022), and higher financing costs, along with tighter lending standards, have added some upward pressure on capitalization (cap) rates and downward pressure on property values. Clarion Partners expects cap rates to expand; the magnitude, however, will depend on various factors. The risk profile of individual assets (sector type, market and lease terms) will matter significantly. High-quality assets with strong net operating income (NOI) growth should fare relatively better. There is a near-record amount of “dry powder” on the sidelines that seeks to be invested in CRE. At the same time, most property owners are not over-leveraged and are under little pressure to sell right away. For these reasons, we believe that it is likely that the transaction market will remain slow and re-pricing will not be as severe as during the GFC. The pace of property NOI growth (a positive) and cap rate expansion (a negative) will determine property value adjustments.   Looking into 2023, Clarion Partners believes that investors should take a long-term view during this period of uncertainty. The current macro risks and market dislocations may create attractive buying opportunities over the next 12-18 months. In the long run, we believe that for many investors, an adequate allocation to CRE makes sense, as it has proven to be an effective inflation hedge historically and can offer portfolio diversification benefits.4 As CRE transitions into the next market cycle, we also think positioning portfolios for better risk-adjusted performance is important, with an overweight to property sectors and markets that have strong pricing power and can grow cash flow over time. Endnotes Source: NCREIF, Federal Reserve, Moody's Analytics, Clarion Partners Investment Research, September 2022. One basis point is equal to 0.01%. Source: CBRE, CREFCOA, Cushman & Wakefield, Greenstreet. Diversification does not guarantee profits or protect against the risk of loss.   WHAT ARE THE RISKS? Past performance is no guarantee of future results.  Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Equity securities are subject to price fluctuation and possible loss of principal. Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Commodities and currencies contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors. U.S. Treasuries are direct debt obligations issued and backed by the “full faith and credit” of the U.S. government. The U.S. government guarantees the principal and interest payments on U.S. Treasuries when the securities are held to maturity. Unlike U.S. Treasuries, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the U.S. government. Even when the U.S. government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities. Risks of investing in real estate securities are similar to those associated with direct investments in real estate, including falling property values due to increasing vacancies or declining rents resulting from economic, legal, political or technological developments, lack of liquidity, limited diversification and sensitivity to certain economic factors such as interest rate changes and market recessions. Investment involves risks including but not limited to, possible delays in payments and loss of income or capital. Neither Franklin Templeton nor any of its investment managers guarantees any rate of return or the return of capital invested. Source: 2023 U.S. Real Estate Market Outlook | Franklin Templeton

House and apartment prices in Sweden have already fallen by almost a fifth since the price peak in Q1 2022. And this may not be the end of this deep correction, economists warn. Meanwhile, globally, in real terms, after accounting for inflation, houses have already started to get cheaper year-on-year. House prices in Sweden have fallen by -17% since the spring peak, according to data from the state-owned mortgage bank SBAB. The launch of cycles of interest rate increases by central banks caused downward trends in real estate prices not only in this Scandinavian country, but they are most visible there. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM Swedish houses are getting cheaper in the eyes The forecast of the economists of the Swedish central bank assumed that as a result of the cycle of rate increases, the prices of Swedish houses and flats could fall by -20%. These assumptions as to the depth of the correction have already been almost fulfilled, and the end of the monetary policy tightening cycle in developed countries is not yet in sight. Property prices have also been falling for months in markets such as Canada, Australia and New Zealand. However, in no country have they gone down as much as in Sweden. Several factors contribute to this. This is not only about the rising cost of money and credit, but also about the deteriorating condition of the Swedish economy and prospects, and the increasingly worse social climate for living in a country with the capital in Stockholm. In December 2022, real estate prices in Sweden fell by -2% m/m. In November they fell by -2.2% m/m, and in October by -2.3% m/m. “If we see an increase in unemployment, it will be important that mortgage payments do not increase. If there is a simultaneous increase in the unemployment rate and an increase in the main interest rate, the situation will become difficult, both for borrowers and for the real estate market,” said SBAB chief economist Robert Boije . Prices of detached houses have fallen by -19% since the spring peak. Housing prices went down by -14%. Experts explain that houses are cheaper than flats because they are more energy-intensive, i.e. they generate higher electricity bills, which is not welcomed by the owners with the current increases in electricity prices. Read next: Croatia introduces Euro – what are experts' approaches?| FXMAG.COM Sweden House Price Index Source: Trading Economics Global home prices are falling after inflation What is the situation with house and apartment prices around the globe? According to the Knight Frank Global House Price Index, house prices in 56 countries continue to grow at an annual rate of 8%, although they have fallen from a peak of 10.9% reached in Q1 2022. However, in real terms, taking inflation into account, house prices are falling by -0.3% y/y. Despite this, in nominal terms, 48 of the 56 countries see price increases on an annual basis. Real estate prices are growing the fastest in Turkey (189% y/y in the third quarter), but to a large extent this growth is driven by very high inflation (the price growth rate after taking into account inflation is 58%). Real estate markets with the largest drop in prices since the peak in Q1 2022 Source: Knight Frank Source: Knight Frank

Clarion Partners explores the challenges and opportunities within real estate, noting that commercial real estate has seen favorable performance during past periods of rising interest rates. ClearBridge Investments shares its outlook for infrastructure—which is still facing COVID-19-related impacts—in light of rising inflation and bond yields. Monetary policy impacting US and European real estate Tim Wang, Ph.D.Head of Investment ResearchClarion PartnersBruno BerrettaVice President, European Market ResearchClarion Partners Looking at the macro picture, how do you see the impact of continued monetary policy tightening on the real estate market? Tim: As the Fed aggressively tightens financial conditions to curb inflation, we believe 2023 will be challenging, given high interest rates and the risk of a recession. There are still significant positive tailwinds, however. Consumer spending, labor markets, business activity, corporate balance sheets, and the banking system have all continued to be relatively healthy, with much lower leverage than before the GFC. Depending on how quickly inflation responds to the Fed’s tightening, several possible economic scenarios could play out over the next year or two. Nonetheless, we do not believe that the coming downturn will be as severe as the GFC. Moody’s Analytics’ baseline forecast for US economic growth is generally positive, with an estimated 6.6 million new jobs from 2022 to 2024. Historically, US commercial real estate (CRE) investment performance has reacted favorably in periods of rising interest rates. Because of strong job growth and overall demand for commercial space, property cash flows have remained relatively healthy. While some property sectors, such as office and mall, have not fully recovered from the pandemic impacts, other property sectors, like industrial, apartment, life sciences and self-storage, have reported sizable ongoing rent growth. In addition, there is a manageable level of new supply, especially since elevated construction costs and supply chain disruptions present additional headwinds for new development projects. Geographically, high-growth markets with 18 Global Investment Outlook: Finding opportunities in 2023 after a (un)forgettable market year thriving industries, business-friendly policies, and strongdemographics have also seen robust investment performance, given the strength of underlying demand fundamentals. Steady migration and corporate relocations have led to outperformance in many “sun belt” metros and select, premier suburban areas. Of course, not all sectors or markets will experience strong performance, so knowledgeable guidance is imperative. Can you talk about the potential disruptions you see as we look ahead into 2023? Tim: We believe that the combination of higher inflation and rising interest rates will likely have a material yet varied impact on the US CRE market in 2023. There have been some disruptions across real estate debt and equity capital markets. Ten-year financing costs have risen by approximately200–250 basis points (bps)19 year-to-date (through mid- November 2022), and higher financing costs, along with tighter lending standards, have added some upward pressureon capitalization (cap) rates and downward pressure on property values. Clarion Partners expects cap rates to expand; the magnitude, however, will depend on various factors. The risk profile of individual assets (sector type, market and lease terms) will matter significantly. High-quality assets with strong net operating income (NOI) growth should fare relatively better. There is a substantial amount of “dry powder” on the sidelines that seeks to be invested in CRE. At the same time, most property owners are not over-leveraged and are under little pressure to sell right away. For these reasons, we believe that it is likely that the transaction market will remain slow and repricing will not be as severe as during the GFC. The pace of property NOI growth (a positive) and cap-rate expansion (a negative) will determine property value adjustments. Why should investors consider real estate within their portfolios? Tim: Looking into 2023, Clarion Partners believes that investors should take a long-term view during this period of uncertainty. The current macro risks and market dislocations may create attractive buying opportunities over the next 12–18 months. In the long run, we believe that, for many investors, an adequate allocation to CRE makes sense, as it has proven to be an effective inflation hedge historically and can offer portfolio diversification benefits.20 As CRE transitions into the next market cycle, we also think positioning portfolios for better risk-adjusted performance is important, with an overweight to property sectors and markets that have strong pricing power and can grow cash flow over time. What is the outlook for European commercial real estate in 2023? Bruno: In 2023, the disruptive social, economic and financial events that dominated 2022 will manifest themselves through various channels and various degrees in the European commercial property market. The sharp increase in interest rates aimed at tackling rising inflation resulted in a 325–350 bp increase in the cost of debt financing for prime property between the fourth quarter of 2021 and third quarter of 2022, triggering a correction in property yields and values. We expect values to continue to adjust during 2023 until the market finds a new equilibrium. The yield shift is likely to impact low-yielding sectors more proportionally. However, ultimately, the extent of the correction will depend on the risk profile and NOI growth prospects of each individual asset. With inflation expected to remain elevated in 2023, the Consumer Price Index indexation most European commercial leases have written into contracts may partly offset the negative impact of rising cap rates on values. The increased chances of recession weigh negatively on the European occupational market outlook, but there are reasons to be cautiously optimistic. The European corporate sector is generally in better shape than it was pre-GFC, for example, and most European countries are expected to experience only a mild technical recession during 2023. Sector-wise, property types such as logistics continue to There is a substantial amount of “dry powder” on the sidelines that seeks to be invested in CRE. At the same time, most property owners are not over- leveraged and are under little pressure to sell right away. For these reasons, we believe that it is likely that the transaction market will remain slow and repricing will not be as severe as during the GFC. Global Investment Outlook: Finding opportunities in 2023 after a (un)forgettable market year boast excellent market fundamentals and to benefit from numerous structural tailwinds. Across the board, elevated construction costs and rising exit yields are challenging new development projects, curtailing the amount of new supply that will come to market over the next year or two. This may help prevent oversupply even if demand faltered. That said, we believe a weak economic outlook is only likely to exacerbate pressures on sectors like Grade B offices and non-essential retail—adding to the existing challenges of changing shopping and working patterns. For all the above-mentioned reasons, 2023 is likely to be a challenging year for European commercial property. Yet, we believe the ongoing repricing will present attractive buying opportunities for investors ready to deploy capital. Source: gio-4q22-1222-a.pdf (widen.net)

Global central banks have raised interest rates to grapple with reemergent inflation, causing bond and equity valuations to decline in synchrony. The historical diversification benefits of traditional stock and bond investments has turned on end. Amid a continued challenging overall environment, we believe many investors will need a more sophisticated toolbox to meet their long-term goals. In this environment, we believe alternative investments can be used as multi-faceted tools for portfolio construction. Alternative investments, defined as private equity, private credit, real assets—such as real estate and real estate investment trust (REITs)—and hedge funds, have the potential to provide investors with higher returns, higher income, lower volatility and diversification benefits relative to traditional investments.1 Consequently, they can be employed to enhance potential growth, income, defensiveness and/or to provide a hedge against inflation. Benefits of investing in real estate Real assets are tangible, physical assets whose value is derived from their physical use—which includes infrastructure, natural resources and real estate. Of these, real estate is the largest segment of real assets,2 representing a diverse set of opportunities across both categories of use and geography. Real estate has historically been a source of growth and income, diversification and a hedge against inflation. Investors can access real estate in one of three ways: through allocation into publicly traded REIT stocks, unlisted real estate funds or direct assets. Real estate has historically delivered returns on par with equities, with REITs modestly outperforming unlisted real-estate funds (see chart below).  30-year Annualized Returns Through June 30, 2022   Source: Morningstar Direct as of June 30, 2022. Private Real Estate: NFI-ODCE Index; Public Real Estate: MSCI US IMI Real Estate 25/50 Index. The NFI-ODCE Index measures investment returns (gross of fees) of the largest private real estate funds pursuing a core investment strategy, which is typically characterized by low risk, low leverage (less than 40%), and stable properties diversified across the United States. The MSCI US IMI Real Estate 25/50 Index (USD) is designed to capture the large-, mid- and small-cap segments of the US equity universe. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges. Past performance is not an indicator of future results. See www.franklintempletondatasources.com for additional data provider information.   In addition to its historically compelling return profile, real estate has typically offered yields above those of broad stock indexes as well as sovereign debt and high-grade municipal and corporate bonds over full market cycles.3 Real estate cash flows and values have also typically increased over time as the cost of marginal new supply rose and created a natural linkage to the rate of inflation.4 Consequently, real estate has tended to both sustain value relatively well during recessions and perform admirably amid heightened inflation.5  Private real estate vs. publicly traded REITs An investor can gain exposure to real estate through publicly traded REIT products or via open-end or closed-end private equity funds. The assets underlying each is effectively the same: commercial real estate. Returns on private real estate have modestly lagged public REITs, as measured by the National Council of Real Estate Investment Fiduciaries Fund Index – Open End Diversified Core Equity (NFI-ODCE Index) and the MSCI US IMI Real Estate 25/50 Index, respectively, but could be viewed as comparable assuming some allocation to value-additive strategies.6 However, private commercial real estate tends to be less empirically volatile and exhibits lower correlation to other financial assets. This is because values are determined based on relatively infrequent appraisals, whereas a publicly traded REIT is marked-to-market daily and will reflect the constant turbulence of interest rates, risk premiums and other macroeconomic variables. Public REITs also typically have lower leverage and more frequent use of unsecured corporate debt whereas private real estate can have more than 50% loan-to-value with more frequent use of first-mortgage financing. Private real estate can have a greater potential exposure to value-add opportunities as public REITs are limited by capital return requirements to maintain tax-free REIT status. However, REITs have a diverse universe of investable assets across many subsectors including towers, self-storage, timber and cold storage versus private real estate’s exposure of more traditional subsectors with fewer opportunities in more niche subsectors. Thus, investor preferences should determine which would be more suitable when making allocation decisions.  Reasons to invest in both We believe many investors should consider allocations to both private and publicly traded equity strategies to effectively take advantage of the beneficial attributes of real estate. Such an approach can potentially maximize returns, while reducing portfolio risk. The return profiles of combined portfolios exceeded those of both the 100% private and 100% publicly traded equity portfolios.7 In our analysis, this approach can also provide adequate liquidity to ensure access to capital and allow for tactical rebalancing.  Portfolio Mix of Public and Private Real Estate: 20-years Annualized Risk and Returns Through June 30, 2022   Source: Morningstar Direct as of June 30, 2022. Private Real Estate: NFI-ODCE Index; Public Real Estate: MSCI US IMI Real Estate 25/50 Index. The NFI-ODCE Index measures investment returns (gross of fees) of the largest private real estate funds pursuing a core investment strategy, which is typically characterized by low risk, low leverage (less than 40%), and stable properties diversified across the United States. The MSCI US IMI Real Estate 25/50 Index (USD) is designed to capture the large-, mid- and small-cap segments of the US equity universe. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges. Past performance is not an indicator of future results. See www.franklintempletondatasources.com for additional data provider information. Calculation based on a monthly rebalance to the allocation referenced.   Why now is a good time to invest in public real estate In our opinion, the current environment presents a compelling opportunity to consider allocating to real estate strategies. Inflation is running high and growing increasingly persistent. Concerns about whether central banks have the will to combat and defeat inflation in the face of economic risks and imbalances are warranted. For example, industrial real estate is seeing market rent growth exceeding 20% per annum—and, in some places, well above that average—because demand far exceeds supply, vacancy is at record lows, and the cost of new construction is spiraling higher.8 Apartment rents have surged in response to consumers demanding more living space as lifestyles adjust to a new, more home-centric post-pandemic normal. Pandemic-motivated demand for self-storage has pushed vacancy to record lows and rents to record highs. Inflation is a scourge to financial assets unless, of course, one owns scarce assets that can capture and reflect that inflation. In response to high inflation, global central banks have embarked on an aggressive policy of tightening monetary policy, which has raised nominal and real interest rates. This has weighed on commercial property values, as the discount rate applied to cash flows has increased substantially in a short timeframe. In our analysis, this creates an opportunity for a well-chosen portfolio of commercial real estate that can seek to mitigate these pressures through collateralized cash flows that are hedged from the risk of inflation-related devaluation.     We’ve seen a valuation contraction in publicly traded commercial real estate, as asset values have been remarked to reflect higher interest rates. Notably, publicly traded REITs trade at an average 20% discount to net asset value (a measurement of the private market value of the embedded real estate), which has historically marked a nadir for the relative valuation of public real estate (see chart below). The combination of inflation-linked cash flows and the prevailing discount to private market value make the current environment for publicly traded commercial real estate attractive, in our view. The uncertainty surrounding the macro outlook contributes to our view that active management is especially important to discern which opportunities offer high quality, in demand, supply constrained assets and prudent capital structuring and allocation. Historical Price-to-Net Asset Value (P/NAV) Ratio 1996-2022   Source: Evercore ISI/Steve Sakwa as of September 30, 2022.   Endnotes These asset types also carry risks different from traditional investments, please see the disclosures at the end of this document for an explanation of the risks associated with private assets. Sources: Harvard Business School Online, “What are Alternative Investments,” July 8, 2021. McKinsey & Company, “Private Markets Rally to New Heights: McKinsey Global Private Markets Review 2022,” March 2022. Source: Bloomberg as of 11/30/22. Source: Forbes, “What History Teaches Us About Inflation And Commercial Real Estate,” 7/18/22. Sources: NAREIT, “Historical Real Estate Performance Before, During, and After U.S. Recessions, 11/8/22 and CRE, “Is Commercial Real Estate an Inflation Hedge?” 2011. Source: Morningstar Direct as of June 30, 2022. The NFI-ODCE Index measures investment returns (gross of fees) of the largest private real estate funds pursuing a core investment strategy, which is typically characterized by low risk, low leverage (less than 40%), and stable properties diversified across the United States. The MSCI US IMI Real Estate 25/50 Index (USD) is designed to capture the large-, mid- and small-cap segments of the US equity universe. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges. Past performance is not an indicator or a guarantee of future results.  See footnote 6. Source: JLL Research, “Industrial Market Overview: Q2 2022,” 2022. WHAT ARE THE RISKS? All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stocks historically have outperformed other asset classes over the long term but tend to fluctuate more dramatically over the short term. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds adjust to a rise in interest rates, the share price may decline. The risks associated with a real estate strategy include, but are not limited to various risks inherent in the ownership of real estate property, such as fluctuations in lease occupancy rates and operating expenses, variations in rental schedules, which in turn may be adversely affected by general and local economic conditions, the supply and demand for real estate properties, zoning laws, rent control laws, real property taxes, the availability and costs of financing, environmental laws, and uninsured losses (generally from catastrophic events such as earthquakes, floods and wars). Investments in alternative investment strategies are complex and speculative investments, entail significant risk and should not be considered a complete investment program. Depending on the product invested in, an investment in alternative investments may provide for only limited liquidity and is suitable only for persons who can afford to lose the entire amount of their investment. Additionally, investments in private securities and obligations may be thinly traded, have no ready market or exchange and require private negotiation, and which may be restricted as to their transferability. These factors may limit the ability to sell such securities at their fair market value.  

Belgian house price growth came to a standstill in the second half of 2022. In 2023, the housing market will cool down further. We expect prices to fall by half a percentage point this year. A new ING survey also shows that energy is becoming increasingly important when purchasing a home. Half of Belgians would no longer buy a home with a poor energy score House price growth stalled in the second half of last year The largest network of real estate agents, the ERA, last week published its latest price barometer which revealed that property prices increased by only 0.5% in the second half of last year. The index corrects for changes in the quality and location of homes sold and measures the price evolution of similar homes over time. The cooling is expected to continue in the coming months. Rising mortgage rates, in combination with high inflation and the energy crisis, will further slow down the housing market in 2023, according to our analysis. Half of Belgians would no longer buy a home with a poor energy label A new ING survey on a representative panel shows that the energy label is becoming increasingly important when purchasing a home. Half of Belgians indicate that they would no longer buy an energy-intensive home. 36% would still purchase, provided there is enough budget left for an energy renovation. For the remaining 15%, the energy label is not a determining factor. From 1 January 2023, new owners of energy-guzzling homes (with label E or F) in the northern part of Belgium, Flanders, will be obliged to thoroughly renovate their purchased home to at least energy label D within five years of purchase. In addition, high energy prices and sharply increased costs of energy renovations make energy-efficient homes more attractive. Renovation costs in Belgium have risen sharply due to the higher prices of building materials, but also sharply increased wages of construction workers due to automatic wage indexation. Energy-efficient homes 18% more expensive, but effect has not increased since the start of the energy crisis There is a significant price difference between homes based on energy efficiency. According to research by ERA and the University of Antwerp, homes with the best energy label A are 18% more expensive than comparable homes with an average energy label D. However, the effect of a better EPC label on the sales price is in line with previous years and has not increased since the energy crisis. Affordability sharply deteriorated in 2022, but improvement expected Since the start of the pandemic, Belgian house prices have risen by 18%. This growth, combined with rising mortgage rates, has seriously affected real estate purchasing power. In 2022 alone, purchasing power decreased by approximately 6% due to the rise in interest rates. This also takes into account automatic wage indexation. Due to higher interest rates and prices, the affordability of real estate has deteriorated considerably in recent years. We expect affordability to improve again in 2023 thanks to below-inflation house price developments and stabilising mortgage rates. As a result, overvaluations will also decrease. ​ We expect average inflation to fall from an average of 9.6% last year to 5.8%. If house prices fall by 0.5% according to our forecast, this equates to a drop in real prices of more than 6%. This reduces overvaluation and improves affordability. Demand for mortgage loans at lowest level since 2013 The number of new mortgage loans will fall sharply in 2022. In the first 11 months of the year, the number of new loans was 24% lower than in 2021. It may not be fair to compare this with recent years. 2020 and 2021 were exceptionally strong years due to the real estate boom during the pandemic. 2019 was also a good year due to the abolition of the housing bonus in Flanders. But also compared to 2018, the number of new loans in 2022 was 11% lower. We have to go back to 2013 to find an even weaker year. The main reason is of course the sharp increase in mortgage interest rates. For example, market interest rates have risen from 1.4% a year ago to 3.4% at the beginning of 2023 on a 20-year term. However, most of this increase is already behind us. Mortgage rates could still rise at the beginning of the year, but we expect them to stabilise around the current level later this year. Mortgage production at lowest level since 2013 The number of mortgage loans granted during the first 11 months of each year The number of mortgage loans granted during the first 11 months of each year Source: NBB Outlook for 2023: Slight price correction coming We expect prices to fall somewhat in the first half of the year but to recover from the summer onwards. For the whole of 2023, we expect house prices to fall mildly by 0.5%. Moreover, the fall will be slightly larger for energy-hungry homes. We expect the price differential based on the EPC score to increase in 2023 for two reasons. On the one hand, higher energy prices and stricter regulations are increasing the popularity of energy-efficient living. On the other hand, it has also become much more expensive to renovate a house. Read this article on THINK TagsReal Estate Housing Prices Belgium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The pandemic, Russia's attack on Ukraine will cause a series of difficulties, especially economic ones. Asian countries play an important role in the global economy, and their condition is particularly important. China, after covid restrictions, is back to recovery, including the real estate market. Indonesia is showing that despite external influence it is doing well.   In this article: Chinese households Indonesia is doing well The value of muni ETFs Chinese households There is no shortage of problems caused by the pandemic in the Chinese economy. The real estate market will definitely weaken. The number of families who choose not to invest in real estate has increased significantly. China's real estate sector, once a key driver of the world's second-largest economy, fell into a deep crisis in 2022, with real estate investment and sales plummeting, which took a toll on house prices. But there is an optimistic signal. More households were considering buying a home or investing in other assets in the coming three months, according to a survey by a research institute and think tank within the Ant Group and Southwestern University of Finance and Economics published Wednesday. The survey also shows that respondents' willingness to invest in domestic stocks, funds and foreign asset classes has also increased. Stabilizing the crisis-hit real estate sector will be a key challenge this year for policy makers as they attempt to kick-start economic recovery. Much depends on how quickly people start spending again after the government abruptly lifted strict COVID-19 restrictions in December. The number of Chinese households that decided against buying a home soared in the fourth quarter of 2022, a private survey showed, as COVID infections and lockdowns sapped sentiment, while property foreclosures soared as the economy slowed. More here: https://t.co/vo2GeVfK8u — Reuters Business (@ReutersBiz) February 23, 2023 Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM Indonesia is doing well As the world's largest economy, what the US does has major implications around the world, including in Indonesia. Therefore, Indonesia is taking steps to make its economy more resilient so that it can withstand global shocks such as inflation, especially from the United States. Indonesia has coordinated its fiscal and monetary policy tools well to contain inflation and sustain growth. Unlike the US, where inflation remains stubbornly high, inflation in Indonesia fell in January. The headline consumer price index, the main indicator of inflation, fell to 5.28% yoy in January from 5.51% in December. The Indonesian minister said that despite the global slowdown, Indonesia's economic growth remains strong and domestic demand continues to improve. Indonesia says it's working to become more resilient to inflation shocks from the U.S. https://t.co/jdgiXla4Ka — CNBC (@CNBC) February 23, 2023 The value of muni ETFs In the past, ownership of municipal bonds was largely limited to very wealthy investors: it takes significant assets to build a diversified portfolio of municipal bonds, and investing in them requires a high level of expertise and management between brokers and clients. However, the introduction of exchange-traded funds (ETFs) holding an assortment of municipal bonds has created an attractive option for investors. Morgan Stanley Research expects the value of muni ETFs to double to $200 billion in assets under management by 2026, about a third of the time it takes for this asset class to reach $100 billion. Municipal exchange-traded fund assets are growing, which could improve market structure and give more households the potential to reap tax benefits. Learn more: https://t.co/WvxFskSqe5 #ETFs — Morgan Stanley (@MorganStanley) February 22, 2023

The Belgian housing market is cooling due to higher interest rates, with 45% fewer mortgages granted in January 2023 than in the same month last year. Prices are expected to correct by 0.5% this year and rise by only 1% next year, while the real price correction could reach 11% between 2022 and 2024 Real price correction may reach up to 11% between 2022 and 2024 Despite sharply higher interest rates and economic uncertainty, house prices have continued to rise sharply in 2022. Although official figures for the fourth quarter are yet to be released, growth is likely to be between 5% and 6% for all of 2022. However, this is largely due to a strong first half of the year. As we will only feel the full impact of higher interest rates this year, we forecast a slight 0.5% decline in house prices this year. The effect of higher interest rates will still be felt next year as well, making a strong rebound in 2024 unlikely. Therefore, we expect house prices to rise by only 1% in 2024. It will probably take until 2025 for house prices to rise faster than inflation again. This is a rather exceptional situation. Although there have been some years in the past when house prices did not rise as much as inflation, these were exceptions. We have to go back as far as the early 1980s to find a period when house price growth remained below inflation for three years in a row. In recent years, declining interest rates were one of the major drivers of the sharp rise in house prices, but this trend has reversed since early 2022, with interest rates rising. This does increase the real price correction further. So while we do not expect a large (nominal) price fall in the Belgian property market, the real price fall (adjusted for inflation) from 2022 to 2024 could reach around 11%. Evolution of average house prices Source: Eurostat, ING forecasts Mortgage production drops to lowest level in 17 years Due to the sharp rise in mortgage rates, demand for credit has fallen sharply in recent months. The number of mortgages granted, after falling sharply in 2022, declined further in January. In January this year, 45% fewer mortgage loans were granted than in the same month last year. This figure is the weakest month in more than 17 years and demand for credit is currently even lower than during the 2009 financial crisis. Moreover, the European Central Bank's latest Bank Lending Survey, a quarterly survey of banks, shows that they expect a further weakening in demand for home loans in the first quarter of this year. The only bright spot in the survey is that the number of rejected home loans rose sharply in other eurozone countries, but not in Belgium. The automatic indexation of wages ensured that the purchasing power of Belgian households held up much better than in other countries. Year-on-year change in number of mortgage loans granted Source: NBB Affordability at lowest level in 10 years The sharp rise in mortgage interest rates last year, combined with the steep rise in house prices, has put strong pressure on property affordability. In January, our affordability index, which is based on both the repayment burden relative to income and the loan-to-value ratio, reached its lowest level in more than a decade. Affordability may deteriorate further in the coming months as interest rates rise (slightly) again, but we expect affordability to improve later in the year as interest rates stabilise. ING's affordability index for Belgian real estate Source: ING's own calculations Mortgage rates possibly a little higher by summer Mortgage rates have stabilised since the beginning of this year after rising sharply last year. In the first weeks of 2023, the 20-year fixed mortgage rate hovered between 3.2% and 3.4%. It could still go slightly higher in the coming months. A key reason for this is persistently high inflation, which means the European Central Bank is likely to raise interest rates further. Although lower gas prices help slow inflation, core inflation, excluding food and energy, is still rising. With the eurozone economy also proving very resilient, inflation will also cool off less quickly as companies can more easily implement new price increases. Several ECB board members have recently stressed their determination to keep raising interest rates and keep them high. Isabel Schnabel, an ECB executive board member, recently warned that financial markets underestimate the risk of persistently high inflation, indicating that the ECB plans to raise interest rates further in the coming months. If the expected (though limited) rise in interest rates continues, affordability will deteriorate further this year. Although wages, which track inflation thanks to automatic wage indexation, are likely to rise more than house prices this year, this effect is expected to be offset by rising interest rates. Indeed, a jump in interest rates has a much greater effect on affordability than a rise in wages. Supporting factors for the Belgian housing market A sharp (nominal) price correction is quite unlikely in Belgium. Our real estate market is historically more stable than other European countries, partly due to the large proportion of private homeowners and the more cautious lending policy of Belgian banks. Moreover, purchasing power held up much better in Belgium last year than in neighbouring countries, thanks in part to the automatic indexation of wages.  Moreover, there are other factors that will support the Belgian real estate market this year. The supply of new homes on the market will slow down in the coming years, which, combined with a growing number of households, will lead to increasing scarcity and higher prices. According to the Planning Bureau's latest projections, the number of Belgian households will increase by nearly 200,000 between now and 2030, meaning that demand for additional housing will remain high. At the same time, growth in the supply of new housing is slowing down. In the first ten months of 2022, the number of licensed housing units fell 8.3% compared to the same period in 2021. During the pandemic, many projects were delayed because building materials could not be delivered on time. Last year, the sharp increase in mortgage interest rates and the higher cost of building materials caused the price of new construction projects to rise sharply, causing many projects to be postponed or cancelled. This increasing scarcity in the real estate market will put upward pressure on home prices in the coming years. Another factor is the slightly improved economic outlook. The expected winter recession did not materialise, thanks in part to lower gas prices. As a result, consumer confidence has risen slightly from its recent low. Also, the ECB's latest February consumer expectations survey showed that Belgians still expect house prices to rise further next year. Compared to neighbouring countries, Belgians are a lot more optimistic, which will help the dynamics of the real estate market. Read this article on THINK TagsReal estate Belgium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Belgium needs to significantly increase the pace of renovation in order to meet the 2050 target of having all homes climate-neutral, but faces a bigger challenge than other countries due to having an older and larger housing stock, fewer flats, and a higher proportion of low-income homeowners who lack the financial resources for energy renovations A suburb in Belgium Real estate is crucial to the EU's goal of becoming climate neutral by 2050 Energy efficiency is becoming increasingly important for the real estate market and will continue to play a crucial role in the future. Europe's ambition is to become the first continent to become climate neutral by 2050, meaning that the European Union will no longer contribute to global warming. This goal has been embraced by all EU member states. As buildings currently account for 36% of greenhouse gas emissions in the EU, the construction and real estate sectors play a decisive role in achieving this goal. Europe wants to significantly reduce the greenhouse gas emissions and energy consumption of the building stock by 2030 and make it completely climate-neutral by 2050. It is vital to significantly increase the renovation rate of energy-inefficient buildings to achieve these ambitious targets. Heating buildings responsible for 20% of greenhouse gas emissions Building heating accounted for 20% of Belgium's greenhouse gas emissions in 2021, of which 15% was for heating residential buildings and the remaining 5% for heating non-residential buildings. In the residential sector, we see a clear downward trend in greenhouse gas emissions caused by heating. Between 1990 and 2021, for example, emissions fell by 20% despite an increase in the number of buildings. The decrease is largely due to the milder winter weather in recent years, which means we need to heat less. On the other hand, the improved energy efficiency of buildings has also reinforced the downward trend. In contrast, in the non-residential sector, which includes shops, offices, etc., greenhouse gas emissions increased by 36% between 1990 and 2021, partly due to the strong growth in the number of employees and therefore buildings. While the residential sector will also have to greatly increase the pace of renovation to reduce emissions, the non-residential sector in particular will have to play catch-up in the coming years. Despite the progress, Belgium does remain one of the worst-performing countries at a European level in terms of residential energy consumption and per capita CO2 emissions. Only Luxembourg has even higher emissions per inhabitant. In 2019, average Belgian residential emissions were 1.34 tonnes of CO2 per year, almost double the European average and well above Belgium's neighbours. To meet the climate goals, greenhouse gas emissions must fall by at least 80% compared to 1990 by 2050, meaning that current residential CO2 emissions of 1.34 tonnes per person must fall to around 0.30 tonnes. Greenhouse gas emissions per capita, residential sector, 2019 Source: Eurostat Unfavourable starting position makes energy transition extra challenging While all European Union countries face the same challenge of making their entire building stock climate-neutral by 2050, Belgium will have to make extra efforts to achieve this objective. The Belgian real estate market has a number of characteristics that place it in a less favourable starting position for the upcoming energy transition. Below we discuss each of these factors. 1. On average, homes are larger than those in neighbouring countries According to Eurostat figures, Belgian homes are significantly larger than those in neighbouring countries and the EU average. With an average house size of 124 m² in 2012, Belgium only lost out to Luxembourg (131 m²) and Cyprus (141 m²). New houses built since 2012 are slightly smaller on average and are likely to have brought the Belgian average down a little. Nevertheless, Belgium will still score highly in the rankings because new construction is only a small part of the total building stock. Moreover, other European countries are also building smaller and smaller homes. In addition, the size of dwellings can also be determined by the average number of rooms per person. According to Eurostat data, Belgium had an average of 2.1 rooms per person in 2021, leaving it a little behind Malta (2.3 rooms per person) and matching the Netherlands. This is remarkably higher than Germany and France, with an average of 1.8 rooms per person, and the EU average of 1.6 rooms per person. The above indicators show that, on average, Belgian houses have a larger living area than in neighbouring countries and have more rooms to heat and cool, so they consume more energy. Moreover, large houses also have greater heat loss because there are more doors, windows and vents, allowing heat to escape more easily. Average number of rooms per person, 2021 Source: Eurostat   2. Belgium has relatively more open and semi-open buildings In general, flats are more energy-efficient than houses because they have more common walls. As a result, less surface area is in contact with the outside air and less heat is lost. In addition, flats also tend to be a bit smaller than houses, which means fewer rooms need to be heated. With only 22.3% of the total housing stock in the form of flats, Belgium currently has the third lowest share of flats in Europe. Only Ireland (9.8%) and the Netherlands (17.5%) have an even lower share. Then again, unlike the Netherlands, Belgium has relatively more four-fronted houses, where the potential for heat loss is naturally also higher than in closed or semi-open buildings. Building stock by housing type, 2021 Source: Eurostat   3. Belgium has a very old building stock More than 60% of residential buildings in Belgium were built before 1981, meaning they are older than 40 years. Moreover, almost a quarter of residential buildings were built before 1946, meaning they are older than 75 years. Older homes tend to have higher heating requirements than new homes. Energy efficiency was not a priority back then and technological solutions were less developed than today. 4. Relatively more low-income people own their homes Finally, compared to other countries, Belgium also has a high share of homeowners among low-income households, who often do not have sufficient financial resources to pay for a full energy renovation. Plus, low-income households often live in houses with lower energy efficiency, which means that renovation costs are just higher for them. Homeownership by income group, 2015 or latest available year Source: OECD Belgian buildings require more energy for heating These different characteristics of the Belgian property market, namely relatively large and old houses and more open and semi-open buildings, mean that Belgian buildings lose a lot of heat. Therefore, in Belgium, 73% of household energy consumption goes to heating buildings. This puts us in second place in Europe, after Luxembourg which uses 83% of its energy consumption to heat buildings. Belgium thus scores considerably higher than Germany (67%), France (63%), the Netherlands (61%) and the EU average (63%). Many Belgians hesitant to tackle their renovation Although high energy prices have significantly reduced the payback period for energy renovations and stricter regulations are on the way, many Belgians still seem reluctant to tackle the energy renovation of their homes. Last year, there were many relatively minor interventions, such as installing solar panels or extra insulation, but there are signs that the pace of in-depth energy renovations has slowed. Although during the pandemic, the number of building permits issued for renovations rose sharply as many families had more time and spent less money on services, the number fell back to pre-pandemic levels in October. The number of mortgages granted for renovations also fell in the second half of last year to below levels seen in recent years. Finally, data from the European Commission also showed that households' intention to renovate their homes over the next 12 months is at its lowest level in more than 20 years and significantly lower than in neighbouring countries. Number of building permits granted for renovation, October month only Source: Statbel Need for integrated solutions for all aspects of energy renovations To conclude, it seems that the pace of deep energy renovations is slowing down after accelerating during the pandemic. There are several barriers that families experience in tackling their renovation. Many families do not have sufficient financial resources to carry out a renovation, but also experience a lot of other non-financial obstacles that keep them from starting. Families are left with many questions about the total cost of an energy renovation, the payback period, the effect on the EPC score and the value of their house, and the ideal sequence and planning of energy renovations. In addition, home renovation requires technical, administrative and legal knowledge and depends on cooperation between different specialised suppliers, which is an additional non-financial barrier. Nevertheless, the renovation rate will have to increase dramatically to meet EU targets. It is therefore essential to help households through the different steps of energy renovation and work towards integrated solutions that offer households a tailor-made solution, taking into account their financial possibilities, their renovation preferences and the characteristics of their home. Read this article on THINK TagsReal Estate Netherlands Germany ESG Belgium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Construction output rose as much as 6.6% year-on-year in February, much higher than the 1.2% consensus and an increase of 2.4% in January. The better-than-expected performance was due to categories related to infrastructure investment. Real estate development is still poor   Civil engineering construction rose as much as 21.5% YoY (from 15.0% a month earlier), and speciality construction rose 4.3% YoY (7.5% in January). Here we are likely to see the effects of finalising infrastructure projects in the last settlement year of the old EU perspective. Building construction continued to perform poorly, down 2.8% YoY (-10.7% a month ago). This is most likely still the effect of weak housing construction. In the first half of last year, the number of housing units under construction was historically at its highest levels, but as demand declined, it began to decelerate rapidly. The current supply of apartments from developers is able to cover the current demand for almost a year. Therefore, developers are completing projects already started, but not starting new ones. Both categories related to infrastructure and residential investments performed better than a month ago. This suggests that the weather also played a role in the improved construction performance. In February 2023, temperatures were quite similar to a year ago, but it was perhaps drier this year. Read next: FX Daily: Testing the market’s cautious optimism| FXMAG.COM The construction situation in the coming months is likely to be a product of the still unfavourable situation in housing and the completion of projects, from the old EU perspective (when local government authorities rushed to finish projects to use all of the remaining EU money). The prospect of the government's launch of mortgage market support programmes may even weaken demand for housing in the near term, i.e. until the programme's launch, among households hoping to take advantage of government support. In contrast, the experience of previous EU perspectives shows that the last settlement year is conducive to relatively high activity in infrastructure construction. Read this article on THINK TagsPoland construction Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

US home sales remain subdued thanks to elevated borrowing costs, high prices and a lack of supply. New home sales should continue to outperform existing ones in this environment, but price risks remain skewed to the downside. Commercial real estate woes are the bigger concern as office vacancies and higher refinancing risks point to rising loan losses Commercial real estate woes are a concern as office vacancies and higher refinancing risks point to rising loan losses Existing home sales remain under pressure from affordability issues and a lack of options Existing home sales fell 3.4% in April to an annualised 4.28mn versus expectations of a 4.3m outcome. Sales had been as high as 6.3mn as recently as January 2022. Higher borrowing costs and a general lack of affordability after prices rose nearly 50% through the pandemic have constrained demand, but we also have to recognise there is a lack of supply out there, which is also contributing to lower transaction numbers. The more than doubling of mortgage rates over the past 18 months means many homeowners who would like to move are effectively locked in by the cheap financing they secured on their current property. New home sales have consequently been performing more strongly despite the drop in mortgage applications for home purchases – the buyers that are out there simply don’t have much to choose from. New home sales are outperforming existing home sales as mortgage applications point to weakening demand Source: Macrobond, ING   Affordability will remain a key constraint that points to downside risks for transactions. The latest weekly Mortgage Bankers Association data showed that the typical mortgage for a new home taken out last week was a 30Y fixed rate product with a size of $440,400 at a rate of 6.57%, giving a monthly mortgage payment of $2804, a record high. Twelve months ago this was $1750 per month. Consequently, if you are considering buying a home today, you are looking at an annual mortgage cost of around $33,650 on average which, given a median pre-tax US household income of a little under $75,000, points to ongoing weak demand unless prices fall substantially or borrowing costs plunge. Higher borrowing costs and elevated prices have led monthly mortgage payments to surge Source: Macrobond, ING If unemployment turns then rising supply could mean accelerating price falls Should the US economy experience a hard landing and the start of a rise in unemployment, this would threaten a rise in default rates and an increase in the supply of homes for sale. In this scenario, falling demand and rising supply mean falling property prices would be the likely outcome. House price-to-income ratios remain extremely elevated, and for them to return to long-run averages, we would likely need to see prices fall by around 20-25% in the absence of any rise in incomes. Construction of new homes would inevitably fall as well. Commerical real estate is where the bigger problems lie Unfortunately, it isn’t only the residential sector that looks vulnerable. Last week the Federal Reserve warned of the risks facing the commercial real estate sector since the sharp jump in interest rates over the past 14 months “increases the risk” that commercial real estate loans will be difficult to refinance. A recent report from another bank suggested that up to $1.5bn of these loans need to be refinanced by 2025. With office occupancy nationally running at 45% according to data from Kastle and many offices in need of updating and investment, there is the very real risk that defaults rise – A PIMCO fund has defaulted on $1.7bn of office-related loans this year and Brookfield has defaulted on more than $750mn of debt tied to Los Angeles office blocks. What makes this so problematic for the property market and construction sectors is that small banks account for such a high proportion of commercial bank lending to both residential and commercial property. As the chart below shows, banks with less than $250bn of assets account for two-thirds of the stock of all commercial lending to commercial property and more than a third of residential property lending by all banks. Small and regional banks account for the majority of commercial real estate lending Source: Macrobond, ING Small banks will come under increasing pressure, threatening weaker credit growth throughout the economy With these small and regional banks already being squeezed by deposit flight and facing the prospect of more intense regulatory oversight in the wake of recent high profile failures, loan losses on commercial real estate will only heighten the pressure on these banks. The Fed’s viewpoint is that “the magnitude of a correction in property values could be sizable and therefore could lead to credit losses by holders of C.R.E. debt.” With the Fed’s Senior Loan Officer survey indicating credit conditions are rapidly tightening across the board and particularly for commercial real estate lending, this implies a sharp downturn in lending for the sector, meaning refinancing could be immensely challenging and create a downward spiral for prices that will suck construction spending sharply lower. Tighter lending conditions point to a steep downturn in lending on commercial real estate, making refinancing challenging Source: Macrobond, ING   This will have knock-on effects for other lending markets, with banks increasingly reluctant to lend across the board. This is hugely significant as what turns struggling businesses into failing businesses is when credit availability evaporates. Given small and regional banks account for more than 40% of all lending in the US, with a particular focus on small businesses outside of major cities, this is a troubling situation. Large banks are unlikely to be able to fill the gap and the risk is that unemployment climbs. In such an environment, the market pricing of significant and rapid interest rate cuts from the Federal Reserve from later in the year appears justified. Read this article on THINK Tags US Lending Home sales Construction Commercial real estate Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The US 2-year yield fell sharply, while the S&P500 ended flat after hitting a fresh high since last summer on optimism that the US will finally agree to raise the debt ceiling.     The House will vote today to decide whether the debt limit bill gets approved at time to get a Senate approval by next Monday deadline.     The deal between Biden and McCarthy freezes discretionary spending for the next two years, which excludes weighty plans like Medicare or social care, and will only have a minor impact on around $20 trillion budget deficit projected for the next decade. Frozen spending means a spending cut in real terms as long as inflation remains high. The higher the inflation, the higher the spending cut in real terms.   But the problem is that at least 20 conservative Republicans of the House rejected Kevin McCarthy's compromise on debt ceiling, saying that spending cuts are not enough. One hardcore Republican, Dan Bishop of North Carolina, threatened to vote to oust McCarthy because he 'capitulated' to Democrats. Democrats, on the other hand, are not fully happy either as they don't want to freeze or to cut spending.     This is what a compromise is: accepting something without being fully satisfied to avoid a self-induced world economic crisis!    Anyway, any misstep at today's House vote could send the US yields higher and stocks lower.     So far, there has been a widening gap between the way the stock and bond markets priced the threat of a US government default. While the US sovereign bonds cheapened across the board, and violently at the short end, stock investors were confident that a ceiling deal would be reached and weren't discouraged by the rising US yields to stop buying.     And even the fact that the Federal Reserve's (Fed) hawkish stance has a material impact on yields' upside trajectory since the bank-stress dip, stock markets kept on climbing. Looking at how Nasdaq behaved since the bank stress rebound in yields, you could barely guess that there are rate-sensitive stocks in it.    But the reality check is that Nasdaq stocks are rate sensitive, and cannot be rate-hike proof if the Fed continues hiking the rates. It would, however, also be a good thing for the Fed members to consider pulling some liquidity out of the market as the Fed's balance sheet is still worth more than before the bank crisis.    What if Russia refuses to cut output?  In energy, US crude tanked nearly 5% yesterday, and tipped a toe below the $69 pb mark on worries that Russia may not follow OPEC's output cuts, in which case the internal conflict may prevent the cartel from reducing supply in a way to give a jolt to oil prices.   There is little chance that we see the kind of discord like back in 2020, as the Ukrainian war strengthen the ties between two allies. But any Russian veto could materially reduce OPEC's power of hit on oil prices.    Elsewhere, the Chinese manufacturing PMI showed that contraction in activity accelerated in May instead of stepping back to the expansion zone. The faster Chinese manufacturing contraction also weighs on the sentiment this morning.     We shouldn't expect China to post growth numbers comparable to levels pre-2020 because China under Xi Jinping's rule is willing to avoid euphoric, and unhealthy growth.   This is why the government put in place severe crackdown measures on real estate, tech and education. That does not mean that China won't get back in shape, but recovery will likely take longer, and growth will likely be more reasonable and a better reflection of the reality of the field.    

US household wealth rose $3tn in the first quarter A strong performance by equity markets lifted household wealth, helping to offset declines in real estate and cash, checking and time savings deposits. With wealth $35tn higher than before the pandemic households continue to have a strong platform to withstand intensifying economic headwinds, offering hope that any recession will be short and shallow.   Wealth increase led by equity market gains The value of assets held by US households increased by $3.05tn in the first three months of the year, taking the total assets held by the household sector to $168.5tn. Liabilities rose just $23bn to $19.6tn, leaving net household worth at $148.8tn.   Rising equity markets was the main factor leading to the increase, but holdings of debt securities increased $893bn. These factors more than offset the $617bn drop in household wealth in real estate and the $415bn decline in cash, checking and time savings deposits held by US households.     Excess savings are dropping We have to remember that March saw the collapse of Silicon Valley Bank and Signature Bank with deposit flight hitting many of the small and regional banking groups. We have subsequently seen this situation stabilize although some money that would typically be left in banks has been switched to money market funds.   Nonetheless, we do appear to be seeing much of the excess saving built up during the pandemic via stimulus payments and extended and uprated unemployment benefits being eroded – it is now "only" around 1.8tn above where we would expect it to be based on long run trends. This is especially the case now that households have an apparent appetite to spend, particularly on services.     Household balance sheets in a good position to help limit the downside from a recession After the most rapid and aggressive period of interest rate hikes seen in over 40 years plus the tightening of lending conditions currently being experienced in the US, recession fears are mounting. Households will play a huge role in how prolonged and deep any downturn will be given consumer spending accounts for more than two-thirds of economic activity in the United States.     Household assets are 860% of disposable income while liabilities are ‘just” 100% of disposable incomes. While this is down on the peak seen in 1Q 2022 and there are questions over wealth concentration, this is a much better position than any previous recessionary environment and means that the consumer sector should be better able to withstand intensifying economic headwinds. Consequently, we remain hopeful that a likely 2023 recession will be modest and short-lived assuming a swift easing of monetary policy from the Federal Reserve.

Polish market after 5 months - where are we at? We are approaching the halfway point of 2023. Before the semi-annual investment market reports are released, Avison Young is sharing the current results.     Market adaptability The current results do not look much optimistic. However, this is a temporary state. Poland’s real estate market has stable foundations, and investors are highly adaptable, which is confirmed by the results achieved in previous years. Let's take a quick look at how the market has responded to the challenges emerging in the last 3 years. COVID-19 had a huge impact on the economy and customers behaviour, which naturally translated into the real estate market and investors’ activity. In the face of restrictions and the growing importance of staying local, customers more often chose “convenience retail” than shopping centres; home office and the hybrid work model developed. The growing pandemic boosted e-commerce (according to the Statistics Poland, the share of online shopping doubled in just two months from 5.6% in January and February 2020 to nearly 12% in April 2020), which in turn influenced the dynamic development of the industrial sector. However, investors relatively quickly adapted to the new conditions, and the total investment volume in 2020 amounted to EUR 5.3 billion and EUR 5.9 billion in 2021. Certainly, these results were lower than the volumes from 2018 and 2019, but they secured the 3rd and 4th highest position in terms of volume in the history of the market. In 2020, investors focused on “core” office buildings, warehouse portfolios and retail parks. In 2021, we saw record market liquidity (166 transactions) and - due to the prolonged period of the pandemic – a shift in investors' attention to opportunistic transactions in shopping centres and office buildings.   In 2022, the outbreak of war in Ukraine triggered further market turmoil, record high inflation, rising interest rates and escalating investment uncertainty. Nevertheless, this challenging year ended with a volume close to 2021’s (5.8 billion), which once again confirmed the maturity and liquidity of Polish real estate market. During the noticeable slowdown and the wait-and-see strategy adopted by investors, the market saw 5 historically large transactions accounting for 40% of the total investment volume, including the sale of prime Warsaw office buildings (The Warsaw Hub and Generation Park Y), the first since 2018 major prime shopping centre transaction (Forum Gdańsk), the sale of Danica warehouse portfolio and the creation of two JVs by EPP. For comparison, the decline in transaction volumes compared to 2021 in Western Europe reached an average of nearly 20%, and in the region of Central and Eastern Europe less than 3%.   In 2022, investors turned their attention to regional markets outside the main cities, which applied to all real estate sectors. Office buildings in the regions accounted for 68% of transactions and 50% of the total volume on the office market. In the industrial sector, 40% of the volume concerned facilities outside the largest warehouse hubs. Transactions of shopping centres in medium-sized cities appeared on the retail market, but new players continued to focus on safe retail parks.   Current status We are estimating that the volume of closed transactions announced publicly from the beginning of this year to the end of May, amounted to only around EUR 800 million. For comparison, in 2021 and 2022, the volume of transactions in the same period amounted to over twice as much. There were no historically large transactions, which in the first quarter of 2022 (The Warsaw Hub, EPP’s two joint venture investments) alone accounted for 75% of the total volume. Nevertheless, compared to the countries of Central and Eastern Europe, we still remain the most attractive and liquid market.   Offices slowed down On the office market, only 7 transactions were concluded during this period, concerning “core +” and opportunistic buildings located in Warsaw, outside the city centre. Avison Young investment team represented the seller in the divestment of Celebro and Wola Retro buildings.   Sale & leaseback at warehouses Since the beginning of the year, the dominance of the western regions in terms of location, mainly Lower Silesia, is clearly visible in the industrial sector. In turn, in the last 2 months, sale & leaseback transactions prevailed. Portfolio transactions are yet to be recorded.   Retail parks decelerate In the first 5 months of 2023, only one retail park transaction was completed and announced. In the first quarter, opportunistic smaller shopping centres and redevelopment schemes were the most popular. An example of such a transaction may be the sale of 4 commercial facilities portfolio located in Koszalin, Szczecin, Wałbrzych and Strzegom, where the Avison Young team represented the seller. In turn, in the last 2 months, the subjects of the announced transactions were large-format retail properties: 3W portfolio and Castorama in Płock.   Strategies of banks and strategies of buyers “One of the reasons for the reduced number of transactions and volume in the first 5 months of 2023, is that the process of adjusting price expectations on the seller-buyer line is still ongoing. However, we can see the first signs indicating that this situation may improve by the end of the year - says Marcin Purgal, Senior Director, Investment at Avison Young. - Banks, although still very selective, are analysing new financing products more and more efficiently. The situation related to interest rates seems to be quite predictable, inflation is slowing down, but it still takes time for the market to stabilize and get back on track. Currently, many buyers are trying to take advantage of the market situation and place bids far below property valuations, hoping to get a good deal. However, many sellers are in no rush to sell. That changes when the seller has to liquidate the fund, funding runs out, the property stops performing, or someone fails.”   What awaits us in the second half of the year? We expect that in the second half of the year, the commercial real estate market in Poland will be dominated by opportunistic and “value add” assets in every sector. Nevertheless, the best office buildings, whether in Warsaw or in major regional cities, as well as warehouses, should also be of interest to investors.   Authors: Paulina Brzeszkiewicz-Kuczyńska (Research and Data Manager) and Marcin Purgal (Senior Director, Investment)

Asia Morning Bites China's monetary stimulus and lower US inflation provide a positive backdrop for risk assets ahead of tonight's FOMC meeting.   Global Macro and Markets Global markets:  Equities seemed to like the continued decline in US inflation yesterday, as it bolsters the case for a pause from the Fed (next decision at 02:00 SGT Thursday). The S&P500 rose 0.69% yesterday, and the NASDAQ added another 0.83%. Chinese stocks also rose, helped by yesterday’s unexpected PBoC rate cut. Still, despite the lower inflation print, US Treasury yields rose some more – the yield on 2Y notes rose 8.9bp to 4.666%, and the 10Y bond yield rose 7.8bp to 3.813%. Once the Fed is out of the way, and the market has settled, perhaps with an even slightly higher bond yield, this might well feel excessively high, given that inflation for July will probably come in at the low 3% level. EURUSD rose a little yesterday, reaching 1.0789, Other G-10 currencies also made gains, though the JPY continues to look soft at 140.18.  The KRW was the standout in Asia yesterday, gapping lower to 1271.50, possibly helped by hawkish comments from the latest BoK minutes. Strong labour data just out will also likely help (see below).   G-7 macro: Yesterday’s US inflation figures for May came out more or less in line with expectations. Headline inflation dropped to just 4.0% from 4.9%, while the core fell a little less, reaching 5.3% (it was 5.5% previously). James Knightley’s note on what this means is worth a close read. But the short version is that it boosts the chances of a Fed pause tonight – even if they indicate further hikes in the dot-plot (we don’t think they will ultimately deliver).  US May PPI data due out should add to the case for falling pipeline inflation pressures. UK April industrial production will not make pleasant reading, though the index of services could be a bit stronger. The ECB meets to decide on rates tomorrow. There is a wide consensus for a further 25bp of tightening.   South Korea: The jobless rate unexpectedly fell to 2.5% in May (vs 2.6% in April, 2.7% market consensus). Employment of services such as whole/retail sales, recreation, and transportation, led the improvement. One interesting thing is that job growth in ICT and professional, scientific& technical activities has been particularly strong over the past several months, despite the recent weakness in the semiconductor business. We think this is not directly related to semiconductor manufacturing itself but more related to platform services and software development, including AI technology. We believe that the tech sector has held up relatively well. Meanwhile, the construction industry shed jobs for the second consecutive month, and real estate also cut jobs.  We think that despite weakness in manufacturing and construction, service-led labour market improvements have continued, and this probably supports the hawkish tone of the BoK. In a separate data release, import prices dropped significantly to -12.0% YoY in May (vs -6.0% in April), mostly due to falling commodity prices. We expect consumer inflation to decelerate further in the coming months and to reach the 2% range as early as June.     What to look out for: FOMC meeting South Korea unemployment (14 June) India Wholesale prices (14 June) US PPI inflation and MBA mortgage applications (14 June) FOMC policy meeting (15 June) New Zealand GDP (15 June) Japan core machine orders (15 June) Australia unemployment (15 June) China industrial production and retail sales (15 June) Indonesia trade (15 June) India trade (15 June) Taiwan policy meeting (15 June) ECB policy meeting (15 June) US retail sales and initial jobless claims (15 June) Singapore NODX (16 June) BoJ policy meeting (16 June) US University of Michigan sentiment (16 June)

BoE decides after another bad inflation report.     Federal Reserve (Fed) Chair Powell didn't say anything we didn't know, or we wouldn't expect in the first day of his semiannual testimony before the American lawmakers yesterday. He said that the Fed will continue hiking rates, but because they are getting closer to the destination, it's normal to slow down the pace. He repeated that two more hikes are a good guess, and that the economy will suffer a period of tight credit conditions, below-average growth, and higher unemployment to return to lower inflation.   The US 2-year yield pushed higher. The 10-year yield was flat given that higher short term yields point at higher recession odds for the long term. The gap between the 2 and the 10-year yield is again at 100bp.  In equities, the S&P500 gave back some field, but not all sectors suffered. Tech stocks pulled the index lower, financials and real estate were down, but energy stocks led gains as US crude jumped past $72pb on news that the US inventories dipped by around 1.2 mio barrel last week. Industrial, materials and utilities were up, as well, as a sign that a rotation toward the laggards could be happening rather than a broad-based moody selloff.  In currencies, the US dollar fell and is now testing the April-to-date ascending base - not because the Fed's Powell sounded more dovish, but because what's happening beyond the US borders makes the Fed look more dovish than what it really is.     By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank

Germany needs an ‘Agenda 2030’. A stagnating economy, cyclical headwinds and structural challenges bring to mind the early 2000s and call for a new reform agenda   As Mark Twain is reported to have said, “History doesn't repeat itself, but it often rhymes.” Such is the case with the current economic situation in Germany, which looks eerily familiar to that of 20 years ago. Back then, the country was going through the five stages of grief, or, in an economic context, the five stages of change: denial, anger, bargaining, depression and acceptance. From being called ‘The sick man of the euro’ by The Economist in 1999 and early 2000s (which created an outcry of denial and anger) to endless discussions and TV debates (which revelled in melancholia and self-pity) to an eventual plan for structural reform in 2003 known as the 'Agenda 2010', introduced by then Chancellor Gerhard Schröder. It took several years before international media outlets were actually applauding the new German Wirtschaftswunder in the 2010s. It's hard to say which stage Germany is in currently. International competitiveness had already deteriorated before the pandemic but this deterioration has clearly gained further momentum in recent years. Supply chain frictions, the war in Ukraine and the energy crisis have exposed the structural weaknesses of Germany’s economic business model, and come on top of already weak digitalisation, crumbling infrastructure and demographic change. These structural challenges are not new but will continue to shape the country’s economic outlook, which is already looking troubled in the near term. Order books have thinned out since the war in Ukraine started, industrial production is still some 5% below pre-pandemic levels and exports are stuttering. The weaker-than- hoped-for rebound after the reopening in China together with a looming slowdown or even recession in the US, and the delayed impact of higher interest rates on real estate, construction and also the broader economy paint a picture of a stagnating economy. A third straight quarter of contraction can no longer be excluded for the second quarter. Even worse, the second half of the year hardly looks any better. Confidence indicators have worsened and hard data are going nowhere. We continue to expect the German economy to remain at a de facto standstill and to slightly shrink this year before staging a meagre growth rebound in 2024.   Headline inflation to come down after the summer What gives us some hope is the fact that headline inflation should come down more significantly after the summer. Currently, inflation numbers are still blurred by one-off stimulus measures last year. Come September, headline inflation should start to come down quickly and core inflation should follow suit. While this gives consumers some relief, it will take until year-end at least before real wage growth turns positive again. At the same time, an increase in business insolvencies and a tentative worsening in the labour market could easily dent future wage demands and bring back job security as a first priority for employees and unions. In any case, don’t forget that dropping headline inflation is not the same as actual falling prices. The loss of purchasing power in the last few years has become structural.

Higher for longer means bottoming out later About a year ago, the European Central Bank (ECB) engaged in the most aggressive interest rate hike cycle since the start of the monetary union. Interest rates for housing loans have also shot up, financing costs have risen significantly and demand for housing loans dropped sharply. While the economic outlook has weakened lately and there are increasing signs that the monetary policy transmission is working, the fear of pausing too soon is currently greater within the ECB than the fear of doing so too late. We expect the central bank to raise policy rates by 25 basis points at both its July and September meetings. As a consequence, capital market rates will move up slightly and will only start to stabilise or begin to come down at the end of the year. Demand for housing loans will therefore be dampened for longer and may also follow a similar pattern. Rising interest rates drive affordability to historically low levels The recent rise in interest rates has made a significant impact on the affordability of residential real estate, putting a heavier financial burden on prospective homeowners. The sharp rise in energy prices last year exacerbated the situation, leaving families with less money for mortgage payments after paying their energy bills. Consequently, many people chose to postpone their purchase plans, leading to a noticeable drop in demand for credit and downward pressure on house prices. Since interest rates will remain higher for longer, it seems likely that mortgage rates will increase somewhat further in the second half of the year, putting additional pressure on affordability. Several factors partially mitigated the negative effects of rising interest rates on the housing market. These include a tight labour market, a pick-up in nominal wage growth after a sharp fall in real wages last year, an extension of average loan maturities and the implementation of government support measures. The sharp fall in energy prices also took some pressure off as households had to spend a smaller proportion of their income on their energy bills. In some eurozone countries, house prices fell significantly from their peak levels. Those positive drivers, however, only offset part of the negative effect of interest rates this year. In our view, housing affordability is expected to remain low throughout 2024, mainly due to a ‘higher for longer’ interest rate environment.   Green transition as structural key driver Looking further ahead, the role played by energy efficiency in the housing market is likely to grow. Both regulatory drivers and government investment, as well as changing consumer preferences are pulling in that direction. The surge of energy prices in 2022 and remaining uncertainty about future energy prices have made home buyers increasingly aware of the benefits of more energy efficient homes. European and national initiatives to reduce CO2 emissions from buildings will further disrupt the market. This seems to have recently increased the price premium for energy efficient homes compared to those which consume more energy. Demand for energy efficiency is growing, but lacking labour capacity and higher material prices provide bottlenecks on the supply side of the market to meet the extra demand for energy efficient homes. Given the structural nature of labour shortages, this delays the renovation of the housing stock needed to meet the climate goals. Overall, we expect house prices in the eurozone to fall by some 3.5% to 5% on average this year. House prices are likely to develop differently across eurozone countries, with Germany and the Netherlands seeing rather significant declines in house prices, while house prices in Belgium are only expected to fall slightly. However, there will be differences in price developments not only between countries but also between segments, with energy efficiency playing an increasingly decisive role in price-setting. The price of energy efficient new buildings is likely to be higher, whereas older residential properties with poor energy efficiency are likely to see even greater price discounts than the new market environment already shows.

Housing concerns have eased Into the mix of things that you wouldn’t normally expect to see after one of the biggest tightening cycles in history, is the fact that the residential housing market, known for its interest rate sensitivity, is not only holding up quite well, it is actually strengthening in some locations and real-time real estate sources suggest that this continued during the second quarter of this year and even on into early third quarter.     Residential house prices     This is partly a factor of how ahead of the game many households got during the period of low interest rates, overpaying their mortgages, and accruing a buffer against times just like these. Many others have paid off mortgages entirely, though there are certainly some households for whom the current situation is creating genuine hardship. It is also a response to record high immigration rates which are putting upward pressure on house prices at a time when housing supply has been weak.   Permanent and long-term migration   High risks of inflation bumps When it comes to the inflation story itself, and how this may develop and feed through into future RBA policy, the monthly data tell the most coherent story. This data shows how very high month-on-month rates of growth in the first six months of last year are one of the main reasons why the annual inflation rate has dropped. All that has needed to happen each month is that the CPI index rises less than it did last year, and the inflation rate automatically drops. That is basically how year-on-year inflation works.     Australia's CPI outlook But the month-on-month increases in the CPI index this year have still been quite fast. Looked at from the perspective of the annualised rates of 3m and 6m inflation (what we refer to as the 'run-rate'), which is less influenced by what happened 12 months ago, and tells us more about what inflation is doing right now, it is clear that the inflation run-rate has not dropped very much. Moreover, unless it does so, and soon, given the much less favourable series of base comparisons from August to October, there is a very good chance that the annual inflation rate will begin to move higher again, not lower during third/fourth quarter 2023. Even the July print, where the last high base comparison should make progress possible, we have large electricity tariff hikes to incorporate, so the bad news may come even earlier. inflation  

Polish construction activity remains lacklustre in July Construction output rose by 1.1% year-on-year in July, from 1.5% a month earlier and significantly below expectations of 2.5%. EU-backed infrastructure projects continue to be the main growth driver, while housing remains a major drag. Civil engineering (which rose by 11.8% YoY, from 5.9% in June) remains construction’s biggest growth driver. This is most likely because there are still incomplete infrastructure projects planned under the last settlement year of the "old" EU budget. The experience of previous EU budget perspectives allows us to assume that dynamic growth in this category will be maintained (or even accelerated) until the end of this year. The construction of buildings, primarily residential, remains the weak spot, falling by 7.8% in July, following a 5.7% decline a month earlier. The number of housing units under construction remains on a strong downward trend from record levels in the first half of 2022 but is still at a fairly high historical level. Moreover, a significant number of apartments continue to be delivered. In the first seven months of this year, almost as many apartments were completed as in the same period in 2022. We expect that smaller developers are completing projects they have started in order to regain liquidity. Combined with weak demand at the turn of the year, the result is a very high number of apartments on offer, enough to cover demand for many months. Therefore, even a significant increase in interest in housing related to the government's "2% Safe Credit" programme will not be enough to substantially improve housing construction this year. Given the number of housing projects started in previous years and the small number of new projects, the downtrend in the construction of buildings should persist or even accelerate until the end of the year. Industrial and commercial construction, especially warehouse halls, remains a positive element but will be significantly insufficient to balance weak housing.

Swedish krona still searching for the bottom, but the Riksbank can help EUR/SEK is close to the 12.00 level, trading at historic highs as external and domestic factors have added pressure to the already weak krona. In the medium term, we have few doubts SEK can recover and converge with higher fair value, but the timing is highly uncertain, and will be more dependent on the global market environment than on Sweden’s economic woes.   Why it’s still hard to pick the bottom for the krona Back in May, we published a note entitled “Sweden: Hard to pick a bottom for the unloved krona”. More than three months later, it is still hard to pinpoint an end to the EUR/SEK rally, and the key drivers behind the strength in the pair have not changed materially. Back then, the Riksbank had just lifted the cap on the pair with a dovish surprise, and while it later attempted to restore a currency-supportive hawkish stance, markets have continued to price a good deal of domestic downside risk into SEK. In the broader FX picture, pro-cyclical currencies like SEK are primarily responding to US data at the current juncture: the recent resilience in activity indicators has kept market expectations for Fed easing capped, global rates elevated, the dollar strong and high-beta currencies under pressure. Remember how NOK and SEK emerged as the two biggest underperformers during the core of the Fed tightening cycle? As the higher-for-longer narrative in the US consolidates, investors are once again turning their backs on the illiquid Scandinavian currencies. And with Sweden facing domestic headwinds and the eurozone’s economic outlook deteriorating, EUR/SEK is trading at fresh highs, and at risk of touching the 12.00 pain level.         The Riksbank can cap krona weakness The chart below shows the risk premium (orange line) that has been built in for the krona (against the euro) since the start of the year. That tells us how much higher EUR/SEK is trading compared to what we estimate is its fair value according to market drivers (like rates and equities).       Despite perceived real estate concerns building steadily into the end of April, EUR/SEK traded close to its fair value thanks to the Riksbank’s currency-supportive hawkish tone. The shift in narrative at the April meeting (when two members voted against a 50bp hike, and the rate path was more dovish than expected) led to a spike in SEK undervaluation, which lasted for two months. Crucially, the return of a currency-supportive hawkish stance at the Riksbank’s June meeting saw the EUR/SEK mis-valuation drop to zero. The following build-up in the EUR/SEK risk premium was much more short-lived compared to the one in May-June, and primarily a consequence of the bond sell-off in the US.   So, what is this telling us? The Riksbank can still impact the krona substantially. Despite not being able to fully insulate a high-beta currency like SEK from external drivers, it can prevent it from trading below its short-term fair value. To do this, it must meet or exceed market expectations on future rate tightening (i.e. via rate path projections), which has the additional benefit of signalling that the Bank is not so worried about the economic outlook and the risks to financial stability as to overlook its inflation mandate and the need to stabilise the currency. Markets are fully pricing in a 25bp hike in September, with a 50% implied probability of another 25bp hike at the November meeting. The Riksbank will likely have to signal one more hike in its rate path projections to support the krona when it raises rates in September. Our SEK forecast: the question is timing, not direction One aspect of the lingering SEK risk premium is that it has detached from short-term rate dynamics, which had been a key driver until April/May last year. Based on the EUR:SEK two-year swap spread alone, EUR/SEK should be trading around 11.00 (chart below). In the current market conditions that is, obviously, inconceivable.     We continue to base our medium-term forecast on the evidence that the krona is significantly undervalued, both against the euro and the dollar. On the back of this, our forecast profile for EUR/SEK is downward-sloping for 2024, and we expect the pair to trade below 11.00 by next summer. We must admit, however, that the timing of the SEK recovery remains quite uncertain. In our view, this is not excessively dependent on domestic factors; the krona is already pricing in a sizeable amount of weakness in the domestic economy, and markets will either see the most dramatic scenarios for the real estate sector materialise (not our base case) or will have to price them out of the krona next year. Missteps by the Riksbank, if anything, have a higher chance of causing FX damage.   External drivers hold the key to the recovery We think, instead, that SEK’s reconnection with its stronger fundamentals will be driven by the global FX narrative. A strong dollar on the back of higher-for-longer rates in the US is incompatible with a recovery in the krona. The past few months have been a clear testament to this. We expect US activity data to start turning from 4Q23, and the Federal Reserve to start cutting from March 2024, and that is the window when pro-cyclical currencies like SEK can stage a good rebound. However, we admit that the resilience in US economic data could persist for longer than we estimate, and delay as well as reduce the scope of the recovery in pro-cyclical currencies. A further deterioration in the eurozone growth outlook can also make the krona’s recovery harder.   Until a US data/dollar turn occurs, the krona will remain vulnerable, and we only see 12.00 as the really strong resistance level for EUR/SEK. So far, the Riksbank has ruled out FX intervention but might start throwing that idea around to gauge market reaction (the effective applicability remains doubtful) should we break above the 12.00 mark. We see room for a SEK rebound around the Riksbank’s upcoming meeting when we expect the SEK-supportive narrative to prevail and a good chance of another hike to be added to the rate path. EUR/SEK could be easing back to 11.70 by the end of September.

Executive summary The summer ended with a substantial €19bn in corporate supply coming to the market in the last week of August. This pushed the August total up to €22bn, which was otherwise, as is the norm, a very quiet month. Redemptions in August totalled €7.2bn, thus net supply amounted to €15bn. This added some widening pressure in the past couple of weeks. We expect September will ring her usual busy bell of heavy supply, already seeing €7bn thus far. This could add some slight pressure on spreads over the coming weeks. Corporate YTD supply now sits at €227bn. We maintain our view that supply will end the year between €270bn and €300bn, as we expect October through to December will be relatively slow. Autos and Industrials remain the strongest sectors in terms of supply, both having a total YTD issuance of €41bn. Utility supply has also been decent with €5.4bn in August, bringing it to a total YTD supply of €40bn. The real estate sector, on the other hand, has seen very little supply this year, with just €6bn, compared to €22bn seen this time last year.   YTD corporate Reverse Yankee supply is now sitting at €32bn. We forecast up to €45bn for the year. We expect relatively slow supply over the coming months, particularly now the equation for a cost saving advantage is becoming less favourable for US corporates with USD spread outperformance.

Higher supply in September will put some pressure on spreads • The summer ended with a substantial €19bn in corporate supply coming to the market in the last week of August. This pushed the August total up to €22bn, which was otherwise, as is the norm, a very quiet month. Redemptions in August totalled €7.2bn, thus net supply amounted to €15bn. This added some widening pressure in the past couple of weeks. • We expect September will ring her usual busy bell of heavy supply, already seeing €7bn thus far. This could add some slight pressure on spreads over the coming weeks. Corporate YTD supply now sits at €227bn. We maintain our view that supply will end the year between €270bn and €300bn, as we expect October through to December will be relatively slow. • Autos and Industrials remain the strongest sectors in terms of supply, both having a total YTD issuance of €41bn. Utility supply has also been decent with €5.4bn in August, bringing it to a total YTD supply of €40bn. The real estate sector, on the other hand, has seen very little supply this year, with just €6bn, compared to €22bn seen this time last year. • YTD corporate Reverse Yankee supply is now sitting at €32bn. We forecast up to €45bn for the year. We expect relatively slow supply over the coming months, particularly now the equation for a cost saving advantage is becoming less favourable for US corporates with USD spread outperformance. Financial supply and covered bond supply still running ahead of previous years • Financials supply in August totalled €15bn, pushing the YTD supply total up to €228bn. Supply is still running notably ahead of previous years. Supply in September will be substantial, in line with previous years. Already, we have seen €5.5bn supplied thus far this month. Redemptions totalled €8.5bn in August, resulting in positive net supply of €6.5bn. • Bank bond supply accounted for €14bn in August, of which €11bn was senior debt and €3bn was subordinated debt. Covered bond supply was again considerable with €14bn in August, and now sits at €166bn YTD.          

The group focuses on projects, which are located in prime locations and intends to dispose of the projects within a three-year period beginning with the commencement of commercialization. According to the company’s data, the developer sold projects with a total GLA of 550k sqm in 2017-22. Moreover, the group currently holds three existing projects in its portfolio, located in Wroclaw, Poznan and Warsaw (with a GLA of 117k sqm), and intends to construct three additional projects (in Katowice and Lodz with a leasable area of 141k sqm; we do not assume the start of the above-mentioned projects till the company disposes of part of existing portfolio).   Figure 23. Marvipol Development – existing and planned portfolio (k sqm)   Shareholder structure Marvipol Development’s share capital consists of 41.7m shares The key shareholder is Mr. Mariusz Książek, who holds n total 71.0% of shares and votes, including 66.1% possessed indirectly by Książek Holding.