2022 Macro Themes Wondrous Growth and Inflation - BNY Mellon
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VISION
2022 Macro Themes
DANIEL TENENGAUZER
Wondrous Growth and Inflation
Head of Markets Strategy
Growth and inflation overshot consensus in 2021 thanks to the
implementation of new technologies to fight the pandemic. Global
inflation overshot consensus by more than 100 basis points.
BNY Mellon’s 2022 central scenario incorporates another year of
JOHN ARABADJIS, PHD global inflation and growth overshooting consensus on travel,
Head of Markets Macro
Strategy Product & Analytics
lodging and entertainment recovery.
Six Key Macro Drivers
• US Tightening: US bearish duration: cross-border US Treasury flow is
collapsing, posing risks if stance turns more hawkish. We expect liftoff in July
2022, with three rate hikes through year-end.
JOHN VELIS, PHD
FX and Macro Strategist,
• China Easing: CGB buying slowed significantly in recent months. The 2021
Americas, BNY Mellon
policy error of fiscal and monetary tightening will not be repeated in 2022.
Investment and exports remain key as the “zero COVID” policy suppresses
the consumer.
• Europe Outperforming UK: EUR FX holdings are very negative; GBP
holdings are much higher. Markets are favoring the UK over Europe as a
GEOFF YU difficult winter approaches on the continent. We expect a reversal of fortunes
Senior EMEA Market Strategist in 2022.
• iFlow EM Recovery: EM flow is recovering but at only a fraction of historical
patterns. Following a sudden stop in 2020, EM flows will continue to recover
very gradually on FX valuations and higher carry.
• Asia Zero Tolerance: Asia FX hedging is happening despite equities buying.
WEE KHOON CHONG
Senior APac Market Strategist
Steady vaccination rates, progressive reopening, and accommodative fiscal
and monetary policies support APac growth in 2022, mainly in ASEAN.
• Commodities and Inflation: Profitability and holdings of commodities were
extreme into the recent flop. Commodity prices have eased off in recent
weeks; reopening and inflation should cause the rally to resume.
JULIETTE EASTWOOD
Senior Analyst, Markets Macro Strategy
Product & Analytics No v emb er 30, 2021Inflation and Activity in
Selected Economies
Higher Inflation, Stronger Growth
Consensus for global growth and inflation is lower next year. Our working scenario
The table reports
is that both will overshoot with notable exceptions in Asia and the UK (see tables).
consensus forecasts
This is the backdrop for our six 2022 macro themes. We expect policy tightening in
collected by Bloomberg
the US but easing in China. We believe the eurozone will outperform the UK. EM
for 2021, 2022 and 2023.
flows will likely persist on the heels of strong commodity currency performance.
The last column to the
Loosening zero tolerance policies in Asia will support global demand.
right of each table
portrays the BNY Mellon
BNY Mellon’s US Nowcast is now at 8% q/q annualized against 1.7% for the two-
Markets Strategy central
year average before the Great Lockdown. TSA data shows travel is 10% below
working scenario against
pre-pandemic levels, London Underground ridership is 25% below and Asia
consensus for 2022.
tourism will remain stalled by China’s restrictions until the Winter Olympics in
February. China accounted for 40% of Asia tourism in 2019 according to CEIC. As
“H” indicates that our
of November 27, US consumer spending was 24.7% above pre-pandemic, while
working 2022 scenario is
transportation is +7.8% and entertainment lower, at -0.2% (see data here).
that inflation or activity
may overshoot
consensus. For “L,” we CPI 2021 2022 2023
BNYM vs.
consensus
work with activity or
inflation undershooting US 6.2 3.7 2.3 H
2022 consensus. EU 4.1 2.3 1.5 H
Japan 0.1 0.7 0.7 H
** India data represents
UK 4.2 3.6 2.1 L
fiscal year
Canada 4.7 3 2.1 H
SOURCE: BNY Mellon and Australia 3 2.5 2.3 L
Bloomberg L.P.
China 1.5 2.2 2.2 L
India** 4.48 5.35 4.95 L
Korea 3.2 1.7 1.6 L
Brazil 10.67 5.5 3.55 H
Mexico 6.24 4.3 3.6 H
South Africa 5 4.6 4.5 H
Turkey 19.89 15.5 12.2 H
BNYM vs.
GDP 2021 2022 2023
consensus
US 5.5 3.90 2.5 H
EU 5.1 4.2 2.3 H
Japan 2 2.6 1.3 H
UK 6.95 5 2.05 L
Canada 5 4.05 2.6 H
Australia 3.85 3.75 3 H
China 8 5.3 5.31 H
India** -7.5 9.1 7.45 L
Korea 4 3 2.5 L
Brazil 5 1.5 2.2 H
Mexico 5.9 2.9 2.02 H
South Africa 5.1 2.02 2 H
Turkey 9 3.75 4 H
2 2022 Macro ThemesFX and Rates in Selected
Economies
USD Depreciation, Higher Rates
The top table retrieves The last time global inflation reached 3.5-4%, implied volatility in FX markets
consensus forecasts hovered around 10% compared to 7% now. Higher than consensus inflation and
collected by Bloomberg for growth should therefore imply a wider range of FX forecasts. Consensus remains
year-end 2021, 2022 and uninspiring; our central scenario incorporates a weaker USD with three exceptions
2023. The last column to in the UK, China and Korea. China easing should drive CNY depreciation. Benign
the right portrays BNY global growth and inflation might support the euro and the Japanese yen. iFlow EM
Mellon Markets Strategy shows a gradual improvement in portfolio flows supporting EMFX as most tighten.
central scenario against
consensus for 2022. The end of bond tapering in the US will likely kick off a tightening cycle that may
Depreciation/appreciation trigger three rate hikes in 2022. We believe this tightening cycle will drive
references against the USD. proportionately higher rates in longer-dated bonds, resulting in steeper curves.
The USD is trade weighted. Policy cycles in Japan, the eurozone and the UK are penciled to lag, which would
drive curves steeper. EM flows highlighted above should be anchored to higher-
The bottom table depicts than-consensus rate hikes in Brazil, Mexico and South Africa.
our working scenario
BNYM vs.
against consensus from FX 2021 2022 2023
consensus
three perspectives. First, a
flatter/steeper curve US N/A -0.71% 0.1% Depreciation
scenario implies that rate EU 1.15 1.18 1.18 Appreciation
hikes/cut will not cause an Japan 114 115 112 Appreciation
equivalent increase/decline UK 1.36 1.39 1.42 Depreciation
in the back end of the curve.
Canada 1.24 1.22 1.22 Appreciation
A bearish/bullish duration
outlook represents BNY
Australia 0.74 0.77 0.77 Appreciation
Mellon’s central scenario of
higher/lower rates in the China 6.42 6.4 6.38 Depreciation
back end than those India** 74.78 75 74.74 Appreciation
projected by analysts’ Korea 1170 1145 1120 Depreciation
consensus. The last column 5.54 5.6 5.4
Brazil Appreciation
shows BNY Mellon Markets’
Mexico 20.28 20.15 21.25 Appreciation
central scenario for the
number of hikes in 2022, South Africa 15.3 16 15.4 Appreciation
against consensus number Turkey 9.88 10.43 10.85 Depreciation
of hikes.
Duration Consensus BNYM
Rates Term
Example: For the US, we Outlook # of +25bp # of +25bp
are working with three hikes US steeper bearish 1.2 3.0
against one hike projected EU 0.0 0.0
steeper bearish
by consensus forecasts.
Japan steeper bearish 0.0 0.0
Our central scenario also
incorporates back-end rates UK steeper bearish 1.8 0.2
above consensus (i.e., Canada steeper bearish 2.4 4.0
“bearish” duration), which Australia flatter bearish 0.4 2.6
implies a “steeper” curve
starting from the reference China steeper bearish 0.0 -0.4
rate through the 10-year
India** steeper bearish 1.8 1.0
maturity.
Korea steeper bullish 1.4 2.0
** India data represents Brazil steeper bullish 7.0 7.2
fiscal year Mexico steeper bullish 3.0 6.0
South Africa steeper bullish 3.2 5.0
SOURCE: BNY Mellon and Bloomberg
L.P.
Turkey steeper bearish -1.4 -3.0
3 2022 Macro ThemesUS: Tightening to Start in Mid-2022
We expect the Federal Reserve to initiate rate hikes in July of next year, soon after
the taper is completed, assuming the current pace of $15bn per month is
maintained through midyear. We don’t dismiss the possibility of the Fed speeding
up the taper in early 2022 should inflation remain uncomfortably high and the real
economy – including the labor market – continues to improve.
The renomination of Chair Jerome Powell, with Lael Brainard named vice chair has
initially been greeted hawkishly by markets, with current market pricing now
penciling in a hike as early as June, although consensus forecasts only see slightly
more than one hike. If our July view is correct, we expect a total of three hikes in
2022 – again with the risk to the upside, depending on the inflation and jobs data –
which we have argued will improve sufficiently to justify a midyear liftoff (see here
and here).
This translates into a bearish steepener, given an overall upward shift in the level
of rates and higher yields toward the belly and the front of the curve as the market
begins to come on board to the view of a faster hiking cycle. The market’s current
view is that we will see a relatively shallow cycle by the standard of recent
tightening bouts. OIS pricing sees policy rates just north of 1.5% in five years’ time,
appreciably below the Fed’s own view of terminal rates nearer to 2.5%.
Within iFlow, we have noticed waning foreign participation in the US Treasury
(UST) market. Cross-border flows in USTs have been steadily negative and
declining, and recent holdings appear to have peaked in the early summer of 2021.
As the Fed withdraws from the market, we see an increasing likelihood of even
higher yields across the curve as foreign demand remains frail.
Cross-border flows into
USTs steadily declining The composition of the FOMC and the Fed Board of Governors is still an open
question, even after the Powell and Brainard news; President Biden has three
After surging in the early governors still to appoint to bring the Board up to full strength, and the Boston and
days of the Great Dallas Feds remain without presidents. Boston holds a voting membership on the
Lockdown, foreign FOMC for 2022, as we await the hawkish Eric Rosengren’s successor.
demand for US
government bonds has
been steadily declining iFlow: Cross-Border US Government Bond Flow
for most of 2021.
30 1.00
flow indicator - monthly rolling avg
cumulative daily flow indicator
A lack of participation by 25
0.75
foreign buyers as the Fed 20
withdraws from the 15 0.50
market could conspire to
push higher yields across 10
0.25
the curve and a bearish 5
duration view. 0 0.00
-5
-0.25
-10
SOURCE: BNY Mellon
Markets, iFlow -15 -0.50
Nov 20 Jan 21 Mar 21 May 21 Jul 21 Sep 21 Nov 21
cumulative flow average flow, rhs
4 2022 Macro ThemesChina: Cross-Cyclical, Not Procyclical
It is becoming increasingly clear that Beijing is not going to wait until the annual
National People’s Congress (normally held in March) to launch stimulus measures
to rekindle growth. Even though we expect much of Asia to benefit from the re-
opening trade, China is already the last major economy to maintain a “zero COVID”
policy, and the chances of the policy ending by the end of 2022 remain less than
even. Consumer demand will remain depressed within a citizenry which faces strict
quarantine at a moment’s notice. It’s no small wonder that the Chinese household
that was supposed to be the centerpiece of the “dual circulation” strategy for growth
is barely getting mentioned these days in official circulars. As a result, growth and
stimulus efforts will remain focused on exports and public investment.
The People’s Bank of China’s various liquidity and credit enhancement facilities
enacted throughout the pandemic, complemented by periodic reserve requirement
ratio cuts, will ensure continued loosening of the quantitative and price element of
financial conditions for domestic corporates. Current renminbi resilience represents
the worst of both worlds: little use to tame imported inflation, while nevertheless still
depressing export competitiveness. Beijing will need to be alert over any recovery in
total return interest in CGBs. Limiting CNY strength is therefore a PBoC priority.
Public investment has been the missing element throughout 2021. We believe that
CGB flows stagnant in the lagging recovery and subsequent drop in fiscal expenditure during 2021 meant
2021 that Beijing had been engaged in procyclical tightening by allowing a simultaneous
drop in credit and fiscal impulse. This was last seen between 2016 and 2018 – by
iFlow data showed that design an extremely painful period of deleveraging and growth weakness for the
interest in Chinese country. 2021 feels more like an accident due to misplaced confidence in a
government bonds was sustained domestic and global reopening and recovery.
stagnant throughout
2021. The lack of yield The new target of ‘cross-cyclical adjustment’ argues for growth stability. Neither
relative to a normalizing current levels nor composition of growth in the economy is a good starting point in
US curve and expensive our view. Recent reports suggesting earlier allocation of local government bonds
valuations played a role, earmarked for 2022 support the view that the window for more effective fiscal
but more importantly the stimulus is closing. As a result, Beijing may act before the normal end-Q1/early-Q2
passive flow from index post-NPC period. A quota between 2021’s CNY4.47tln and the record CNY4.73tln
inclusion was not a “emergency” level for 2020 will help support expectations that the government will
factor. step up in supporting growth, especially in a politically sensitive year.
International investors
may revisit allocations
iFlow: Cumulative CGB Flows
into Chinese government 200
bonds and fixed income
in 2022 if growth and
cumulative sum, CNY bn
160
yields pick up. While the
credit support is
welcome, the PBoC may 120
subtly encourage hedged
flows as limiting CNY
strength to support 80
exports will remain a
priority in the absence of
domestic demand 40
growth.
0
SOURCE: BNY Mellon
Feb 20 May 20 Aug 20 Nov 20 Feb 21 May 21 Aug 21 Nov 21
Markets, iFlow
5 2022 Macro ThemesMind the UK-Eurozone Gap
When it comes to confidence suppressants, it would be difficult to match German
Health Minister Jens Spahn’s warning that his fellow citizens would be either
“cured, vaccinated or dead” by the end of the winter. The resurgence in COVID
across much of the continent has all but eliminated hopes of a steady household-
driven recovery in the eurozone. In contrast, health experts in the UK are
cautiously optimistic that the decision to front-load reopening-related infections in
the UK in the summer months, coupled with a strong booster drive, is paying off.
After having a tenuous relationship, at best, throughout the year, EUR/GBP is now
strongly reacting to forward policy differentials. However, we believe pricing of the
eurozone-UK growth and policy gap is now extreme. Unsurprisingly, iFlow also
shows an overheld GBP, and the EUR has recently moved into underheld territory.
Firstly, the full effects of the UK’s fiscal tightening measures announced in 2021
will be felt upon the commencement of the new fiscal year in Q2, led by rises in
corporate and income taxes: overall government consumption is only expected to
rise by 2% next year (vs. 14.7% in 2021) while public investment will contract by
2.1%. In contrast, the NGEU investment plans for the EU will continue to flow, and
the additional displacement of household demand due to winter lockdowns means
there is a chance of additional fiscal loosening on the continent.
Secondly, the Bank of England itself is uncertain regarding the resilience of the UK
household and real wage growth due to a lack of data. The risk is by the time the
full picture is known in Q1 2022, households will face cash flow drags from tax
rises, spending cuts and mortgage rates. Meanwhile, the savings buffer to
Material divergence in “release” pent-up consumption will be exhausted soon, rendering demand growth
EUR vs. GBP holdings difficult – a situation to be exacerbated by Omicron. Meanwhile, the eurozone can
look forward to more reopening reflation after another tough winter, but with
GBP holdings have consistently stronger official support: spending by new governments in France and
generally been stable Germany coupled with Asia’s reopening-related demand are additional catalysts.
and enjoyed a small tick-
up in recent weeks due We don’t expect the eurozone to suddenly flourish. Nonetheless, markets simply
to a hawkish turn by the reflect the fact that ECB and UK OBR forecast only a 1.4pp gap in 2022 GDP
Bank of England. growth (6.0% vs. 4.6%), before converging at 2.1% in 2023, sufficient to realize
gains in eurozone yields and the euro relative to UK counterparts.
In contrast, EUR holdings
did benefit from a
reflation-related bounce iFlow: EUR and GBP FX Holdings
in Q1 but then stagnated
before taking a material 2.25
turn for the worse in Q3.
1.50
The divergence in
scored holdings
0.75
holdings scores reflects
the relative changes in
0.00
policy expectations, but
there are now tentative
-0.75
signs of stabilization in
both trends.
-1.50
Convergence would
happen to the benefit of
-2.25
EUR/GBP. Jan 21 Mar 21 May 21 Jul 21 Sep 21 Nov 21
SOURCE: BNY Mellon EUR GBP
Markets, iFlow
6 2022 Macro ThemesEM Flow: Another Leg Higher
According to iFlow EM, portfolio flows into emerging markets (EM) continue to
recover. Despite a sharp global activity recovery following the Great Lockdown,
investor interest in EM assets remains shallow.
According to iFlow EM, annual portfolio flows into EM are now running at a $216bn
rolling 12-month rate, against $748bn for the historical high of this series (see table
below). Flows are essentially running just under 30% off previous highs. The pace
declined since the end of 2020, when it reached almost $250bn. This leveling was
about a decline in demand for China government bonds (CGBs), which have
dominated EM flows since the Great Lockdown.
iFlow EM is a framework created to generate a timely estimate of EM portfolio
flows. For each country we ran simple regressions of quarterly portfolio flows going
back to 2005 on our own USD-denominated asset flow data. Once extracting
China from the equation, EM flows have markedly improved throughout 2021. EM
ex-China flows are now at $137bn, against a $5bn outflow by the end of last year.
Back in April we first estimated that China annual flows were topping $285bn, and
have declined to $79bn currently. Meanwhile, inflows to all other regions improved
substantially. Asia ex-China is still leading LatAm and EMEA, but overall all three
regions are receiving $40-60bn each.
The lack of interest in EM is largely about two main factors. First, policies tackling
the pandemic were controversial across the board. In LatAm, vaccinations lagged,
and diverse sourcing did not provide much comfort. Political uncertainty remains
high with elections in Mexico, Peru, Argentina and Chile changing national
leadership in 2021 and polls in Brazil and Colombia to come in 2022.
In EMEA, fiscal policy in South Africa remains a risk following local elections on
November 1. Turkey is facing meaningful uncertainty following large interest rate
cuts despite an inflation spike. Russia has been escalating on its western front. In
Asia, zero tolerance policies continue to constrain domestic demand.
Nevertheless, as we show here, currency valuations and carry are attractive in
iFlow EM many EM nations. This could be a harbinger of additional inflow despite all the
hesitation.
Table depicts estimates
of 12-month portfolio Asia
flows in equities and EM ex-
LatAm ex- EMEA China EM
China
bonds. The delta is the China
improvement or 2020 11,730 5,378 -22,053 254,661 -4,945 249,716
deterioration against
Nov-21 37,005 60,676 39,428 78,955 137,109 216,064
2020. 2020 is December
of 2020. Min/Max are Delta 50,812 63,183 64,038 -95,888 178,032 82,144
low/high for the region
since 2007. iFlow EM Min -25,846 -13,578 -42,993 -29,279 -82,418 -111,697
April 2021 was the Max 163,680 158,838 94,883 331,516 417,401 748,917
annual estimate Great
produced in the original Lockdown -25,846 -3,556 -34,470 110,032 -63,872 46,160
paper found here.
iFlow EM
SOURCE: BNY Mellon and (April 2021) 37,577 42,808 28,834 284,148 109,220 393,368
Haver Analytics
7 2022 Macro ThemesAsia: Reopening to Recovery
Steady vaccination rates, progressive reopening of economies, accommodative
monetary policies and expansive fiscal policies are the key pillars for an APac
growth recovery in 2022.
Reopening is crucial both to boost domestic sentiment as well as much-needed
revenue from travel and tourism for some countries in the region. Latest statistics
show that tourism and travel account for 25% and 20% of GDP in Philippines and
Thailand, the most in APac. Taiwan and South Korea are at the opposite end of the
spectrum, accounting for 6.0% and 4.4% of GDP, respectively. The quarantine-
free-travel program is vital for regional tourism, but we might not get back to pre-
COVID levels unless we see a shift in China’s “zero COVID” strategy.
Asian inflation has been resilient with Indonesia and Thailand below and India,
Philippines and South Korea above their respective inflation targets. Bank of Korea
is likely to continue its normalization path into 2022, but the rest of the region is
likely to exert caution and maintain the status quo next year. The growth recovery
APac FX holdings turn
in the region is uneven and susceptible to external risks, notably growth slowdown
underheld
in China and the US Federal Reserve tapering and normalization. Domestic issues
include low consumer confidence and slow credit growth. Limited financial
APac currencies scored
imbalances, such as depressed house price growth in Malaysia and Philippines at
holdings have turned
-1.2% y/y and -9.4% y/y for Q2 2021, respectively, call for looser policies.
underheld since Q2
2021, with regional
Government fiscal policies and monetary financing or asset purchases in India,
COVID uncertainties and
Indonesia, Philippines and South Korea have been supportive to help the
a slowdown in growth
vulnerable but have equally created longer-term debt sustainability risk. Fiscal
momentum.
deficit normalization will be closely scrutinized, especially those with a negative
credit rating outlook such as Malaysia, Indonesia, and Philippines, with budget
The turnaround to
deficit-to-GDP projected to be at -5.9%, -4.5% and -7.0% for 2022.
underheld is thought to
be driven by increasing
An improving growth outlook, positive real bond yields and buoyant fintech,
hedging activities with
especially in Indonesia, India and South Korea, are likely to sustain foreign inflows
continued inflow into the
into equity and fixed income, but rising currency volatility might see FX hedging
region. Over the past
demand as we observed in 2021. Regional differentiation may skew toward the
month, iFlow has
ASEAN countries, for which growth is expected to rebound sharply from 2.8% in
witnessed overall inflows
2021 to 5.8% in 2022, based on the latest International Monetary Fund projections.
into the equity and fixed
income complex, except
for outflow in Singapore APac FX Holdings
equity and Chinese fixed 1.0
income.
In term of positioning, 0.5
scored holdings
SGD and TWD are
overheld while HKD,
THB, PHP and CNY are 0.0
the most underheld and
statistically significant
over the same period. -0.5
-1.0
SOURCE: BNY Mellon Nov 19 Mar 20 Jul 20 Nov 20 Mar 21 Jul 21 Nov 21
Markets, iFlow
scored holdings
8 2022 Macro ThemesCommodities: A Pause, Then a Rally
Since their lows during the Great Lockdown, global commodities have rallied by
78% in aggregate (Bloomberg Commodities Index) through late October 2021.
Subindices such as industrial metals (+103%), energy (+146%) and agricultural
commodities (+74%) have all enjoyed similar performance over roughly equal time
frames, although there has been a recent stall.
As we head into 2022, we believe the complex will tread water until we get through
lockdowns and back to reopening during spring 2022. This will be at play
especially in China, where we expect additional fiscal stimulus in the late winter.
Tightening global liquidity conditions as central bank tapering proceeds could also
contribute to an early-year pause in the rally (see here).
After that, however, we think there will be a resumption in performance of the
commodities trade and additional pressure on global inflation as a result. We
expect differentiation among various components of the broad commodities
complex. Iron ore, for example, may underperform copper and other industrial
metals while property growth in China cools in relation to public investment.
Given the runup in commodity indices over most of 2021, we have seen generally
long holdings in commodity currencies. Only the ZAR, one of the commodity
exporters with the worst performance on the year, is underheld. Down well over
7% year-to-date, these rand shorts have been profitable for real money investors.
As a basket, long positioning had been broadly profitable, although these
Commodity FX longs overweight positions are being reduced as profitability declines. As the chart below
starting to come off shows, with plenty of room to reduce the longs, we think the pause that we see in
the months ahead will serve to bring positions back to normal just in time for the
By early November, with next leg up in commodities, causing renewed outperformance in these currencies.
the strong performance
of commodities and Furthermore, given our global outlook for growth and inflation, we expect by the
commodity currencies, middle of next year to see renewed strength in commodities as reopening leads to
positioning in the a resumption in demand, and infrastructure investment in the EU and US picks up.
complex became
exceptionally long and
profitable. Commodity FX Holdings and Profitability
Quarterly (08/27/21-11/25/21)
The pause in commodity 0.6
prices in November has Havens
served to both erode 0.4
profitability and reduce APac
0.2 LatAm Commodity
commodity FX holdings. G10
profitability
0
Once these positions EM
return to something close -0.2
to normal, we expect the
rally to resume. -0.4
EMEA
-0.6
CEE
-0.8
SOURCE: BNY Mellon -2 -1 0 1 2
Markets, iFlow
scored holdings
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The Bank of New York Mellon SA/NV operates in Ireland through its Dublin branch at Riverside general information purposes only and is not intended to provide legal, tax, accounting, investment,
II, Sir John Rogerson’s Quay Grand Canal Dock, Dublin 2, D02KV60, Ireland and is registered financial or other professional advice on any matter. This material does not constitute a
with the Companies Registration Office in Ireland No. 907126 & with VAT No. IE 9578054E. recommendation or advice by BNY Mellon of any kind. Use of our products and services is subject
to various regulations and regulatory oversight. You should discuss this material with appropriate
The Bank of New York Mellon SA/NV, Dublin Branch is subject to limited additional regulation advisors in the context of your circumstances before acting in any manner on this material or
by the Central Bank of Ireland at New Wapping Street, North Wall Quay, Dublin 1, D01 F7X3, agreeing to use any of the referenced products or services and make your own independent
Ireland for conduct of business rules and registered with the Companies Registration Office in assessment (based on such advice) as to whether the referenced products or services are
Ireland No. 907126 & with VAT No. IE 9578054E. The Bank of New York Mellon SA/NV is appropriate or suitable for you. This material may not be comprehensive or up to date and there is
trading in Germany as The Bank of New York Mellon SA/NV, Asset Servicing, Niederlassung no undertaking as to the accuracy, timeliness, completeness or fitness for a particular purpose of
Frankfurt am Main, and has its registered office at MesseTurm, Friedrich-Ebert-Anlage 49, information given. BNY Mellon will not be responsible for updating any information contained within
60327 Frankfurt am Main, Germany. It is subject to limited additional regulation by the Federal this material and opinions and information contained herein are subject to change without notice.
Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, Marie-Curie- BNY Mellon assumes no direct or consequential liability for any errors in or reliance upon this
Str. 24-28, 60439 Frankfurt, Germany) under registration number 122721. material. This material may not be distributed or used for the purpose of providing any referenced
products or services or making any offers or solicitations in any jurisdiction or in any circumstances
The Bank of New York Mellon SA/NV operates in the Netherlands through its Amsterdam in which such products, services, offers or solicitations are unlawful or not authorized, or where
branch at Strawinskylaan 337, WTC Building, Amsterdam, 1077 XX, the Netherlands. there would be, by virtue of such distribution, new or additional registration requirements. Any
references to dollars are to US dollars unless specified otherwise. This material may not be
The Bank of New York Mellon SA/NV, Amsterdam Branch is subject to limited additional
reproduced or disseminated in any form without the prior written permission of BNY Mellon.
supervision by the Dutch Central Bank (‘De Nederlandsche Bank’ or ‘DNB’) on integrity issues
Trademarks, logos and other intellectual property marks belong to their respective owners. Pursuant
only (registration number 34363596). DNB holds office at Westeinde 1, 1017 ZN Amsterdam,
to Title VII of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the
the Netherlands.
applicable rules thereunder, The Bank of New York Mellon is provisionally registered as a swap
The Bank of New York Mellon SA/NV operates in Luxembourg through its Luxembourg branch dealer with the Commodity Futures Trading Commission and is a swap dealer member of the
at 2-4 rue Eugene Ruppert, Vertigo Building – Polaris, L- 2453, Luxembourg. National Futures Association (NFA ID 0420990). BNY Mellon (including its broker-dealer affiliates)
may have long or short positions in any currency, derivative or instrument discussed herein. BNY
The Bank of New York Mellon SA/NV, Luxembourg Branch is subject to limited additional Mellon has included data in this material from information generally available to the public from
regulation by the Commission de Surveillance du Secteur Financier at 283, route d’Arlon, L- sources believed to be reliable. Any price or other data used for illustrative purposes may not reflect
1150 Luxembourg for conduct of business rules, and in its role as UCITS/AIF depositary and actual current conditions. No representations or warranties are made, and BNY Mellon assumes no
central administration agent. liability, as to the suitability of any products and services described herein for any particular purpose
or the accuracy or completeness of any information or data contained in this material. Price and
The Bank of New York Mellon SA/NV operates in France through its Paris branch at 7 Rue other data are subject to change at any time without notice. The Bank of New York Mellon SA/NV
Scribe, Paris, Paris 75009, France. The Bank of New York Mellon SA/NV, Paris Branch is only provides its services outside of Hong Kong. Any transactions that are intermediated by The
subject to limited additional regulation by Secrétariat Général de l’Autorité de Contrôle Bank of New York Mellon, Hong Kong Branch are carried on through The Bank of New York Mellon,
Prudentiel at Première Direction du Contrôle de Banques (DCB 1), Service 2, 61, Rue Taitbout, Hong Kong Branch in compliance with the “dealing through” (or other) exemption, and not directly
75436 Paris Cedex 09, France (registration number (SIREN) Nr. 538 228 420 RCS Paris - CIB by The Bank of New York Mellon SA/NV. Investment in any floating rate instrument presents unique
13733). risks, including the discontinuation of the floating rate reference or any successors or fallbacks
thereto. BNY Mellon does not guarantee and is not responsible for the availability or continued
The Bank of New York Mellon SA/NV operates in Italy through its Milan branch at Via Mike
existence of a floating rate reference associated with any particular instrument. Before investing in
Bongiorno no. 13, Diamantino building, 5th floor, Milan, 20124, Italy.
any floating rate instrument, please evaluate the risks independently with your financial, tax and
The Bank of New York Mellon SA/NV, Milan Branch is subject to limited additional regulation by other advisors as you deem necessary. Neither BNY Mellon nor any other third party provider shall
Banca d’Italia - Sede di Milano at Divisione Supervisione Banche, Via Cordusio no. 5, 20123 be liable for any errors in or delays in providing or making available the data (including rates,
Milano, Italy (registration number 03351). WM/Reuters Intra-Day Spot Rates and WM/Reuters Intra-Day Forward Rates) contained within this
service or for any actions taken in reliance on the same, except to the extent that the same is
The Bank of New York Mellon SA/ NV operates in England through its London branch at 160 directly caused by its or its employees’ negligence. The WM/Reuters Intra-Day Spot Rates and
Queen Victoria Street, London EC4V 4LA, UK, registered in England and Wales with numbers WM/Reuters Intra-Day Forward Rates are provided by The World Markets Company plc (“WM”) in
FC029379 and BR014361. conjunction with Reuters. WM shall not be liable for any errors in or delays in providing or making
available the data contained within this service or for any actions taken in reliance on the same,
The Bank of New York Mellon SA/NV, London branch is authorized by the ECB (address above) except to the extent that the same is directly caused by its or its employees’ negligence. The
and subject to limited regulation by the FCA (address above) and the PRA (addressabove). products and services described herein may contain or include certain “forecast” statements that
Regulatory information in relation to the above BNY Mellon entities operating out of Europe can may reflect possible future events based on current expectations. Forecast statements are neither
be accessed at the following website: https://www.bnymellon.com/RID. historical facts nor assurances of future performance. Forecast statements typically include, and are
not limited to, words such as “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “likely”,
The Bank of New York Mellon, Singapore Branch, is subject to regulation by the Monetary
“may”, “plan”, “project”, “should”, “will”, or other similar terminology and should NOT be relied upon
Authority of Singapore.
as accurate indications of future performance or events. Because forecast statements relate to the
The Bank of New York Mellon, Hong Kong Branch (a branch of a banking corporation organized future, they are subject to inherent uncertainties, risks and changes in circumstances that are
and existing under the laws of the State of New York with limited liability), is subject to regulation difficult to predict. iFlow® is a registered trademark of The Bank of New York Mellon Corporation
by the Hong Kong Monetary Authority and the Securities & Futures Commission of Hong Kong. under the laws of the United States of America and other countries. iFlow captures select data flows
from the firm’s base of assets under custody, as well as from its trading activity with non-custody
The Bank of New York Mellon, Australia Branch, is subject to regulation by the Australian clients, on an anonymized and aggregated basis. This document is intended for private circulation.
Prudential Regulation Authority and is exempt from holding an Australian Financial Services Persons accessing, or reading, this material are required to inform themselves about and to observe
License. any restrictions that apply to the distribution of this information in their jurisdiction. The Bank of New
York Mellon, member of the Federal Deposit Insurance Corporation (FDIC).
The Bank of New York Mellon is regulated by the New York State Department of Financial
Services under the New York Banking Law which is different from Australian law. © 2021 The Bank of New York Mellon Corporation. All rights reserved.bnymellon.com
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may The Bank of New York Mellon, Singapore Branch, is subject to regulation by the Monetary
be used as a generic term to reference the corporation as a whole and/or its various Authority of Singapore. The Bank of New York Mellon, Hong Kong Branch (a branch of a
group entities. This material and any products and services may be issued or provided banking corporation organized and existing under the laws of the State of New York with
under various brand names of BNY Mellon in various countries by duly authorized and limited liability), is subject to regulation by the Hong Kong Monetary Authority and the
regulated subsidiaries, affiliates, and joint ventures of BNY Mellon, which may include Securities & Futures Commission of Hong Kong. The Bank of New York Mellon, Australia
any of those listed below: Branch, is subject to regulation by the Australian Prudential Regulation Authority and is
exempt from holding an Australian Financial Services License. The Bank of New York
The Bank of New York Mellon, a banking corporation organized pursuant to the laws of Mellon is regulated by the New York State Department of Financial Services under the New
the State of New York, whose registered office is at 240 Greenwich St, NY, NY 10286, York Banking Law which is different from Australian law. The Bank of New York Mellon has
USA. The Bank of New York Mellon is supervised and regulated by the New York State various other branches in the Asia-Pacific Region which are subject to regulation by the
Department of Financial Services and the US Federal Reserve and is authorized by the relevant local regulator in that jurisdiction.
Prudential Regulation Authority (PRA). Details about the extent of our regulation by the
PRA are available from us on request. The Bank of New York Mellon Securities Company Japan Ltd, as intermediary for The Bank
of New York Mellon.
The Bank of New York Mellon operates in the UK through its London branch (UK
companies house numbers FC005522 and BR000818) at One Canada Square, London The Bank of New York Mellon, DIFC Branch, regulated by the Dubai Financial Services
E14 5AL and is subject to regulation by the Financial Conduct Authority (FCA) at 12 Authority (DFSA) and located at DIFC, The Exchange Building 5 North, Level 6, Room 601,
Endeavour Square, London, E20 1JN, UK and limited regulation by the PRA at Bank of P.O. Box 506723, Dubai, UAE, on behalf of The Bank of New York Mellon, which is a wholly-
England, Threadneedle St, London, EC2R 8AH, UK. owned subsidiary of The Bank of New York Mellon Corporation.
The Bank of New York Mellon SA/NV, a Belgian limited liability company, registered in Past performance is not a guide to future performance of any instrument, transaction or
the RPM Brussels with company number 0806.743.159, whose registered office is at 46 financial structure and a loss of original capital may occur. Calls and communications with
Rue Montoyerstraat, B-1000 Brussels, Belgium, authorized and regulated as a significant BNY Mellon may be recorded, for regulatory and other reasons.
credit institution by the European Central Bank (ECB) at Sonnemannstrasse 20, 60314
Frankfurt am Main, Germany, and the National Bank of Belgium (NBB) at Boulevard de Disclosures in relation to certain other BNY Mellon group entities can be accessed at the
Berlaimont/de Berlaimontlaan 14, 1000 Brussels, Belgium, under the Single Supervisory following website: http://disclaimer.bnymellon.com/eu.htm.
Mechanism and by the Belgian Financial Services and Markets Authority (FSMA) at Rue This material is intended for wholesale/professional clients (or the equivalent only), is not
du Congrès/Congresstraat 12-14, 1000 Brussels, Belgium for conduct of business rules, intended for use by retail clients and no other person should act upon it. Persons who do not
and is a subsidiary of The Bank of New York Mellon. have professional experience in matters relating to investments should not rely on this
The Bank of New York Mellon SA/NV operates in Ireland through its Dublin branch at material. BNY Mellon will only provide the relevant investment services to investment
Riverside II, Sir John Rogerson’s Quay Grand Canal Dock, Dublin 2, D02KV60, Ireland professionals.
and is registered with the Companies Registration Office in Ireland No. 907126 & with Not all products and services are offered in all countries.
VAT No. IE 9578054E. The Bank of New York Mellon SA/NV, Dublin Branch is subject to
limited additional regulation by the Central Bank of Ireland at New Wapping Street, North If distributed in the UK, this material is a financial promotion. If distributed in the EU, this
Wall Quay, Dublin 1, D01 F7X3, Ireland for conduct of business rules and registered with material is a marketing communication.
the Companies Registration Office in Ireland No. 907126 & with VAT No. IE 9578054E.
This material, which may be considered advertising, is for general information purposes only
The Bank of New York Mellon SA/NV is trading in Germany as The Bank of New York and is not intended to provide legal, tax, accounting, investment, financial or other
Mellon SA/NV, Asset Servicing, Niederlassung Frankfurt am Main, and has its registered professional advice on any matter. This material does not constitute a recommendation or
office at MesseTurm, Friedrich-Ebert-Anlage 49, 60327 Frankfurt am Main, Germany. It is advice by BNY Mellon of any kind. Use of our products and services is subject to various
subject to limited additional regulation by the Federal Financial Supervisory Authority regulations and regulatory oversight. You should discuss this material with appropriate
(Bundesanstalt für Finanzdienstleistungsaufsicht, Marie-Curie-Str. 24-28, 60439 advisors in the context of your circumstances before acting in any manner on this material or
Frankfurt, Germany) under registration number 122721. agreeing to use any of the referenced products or services and make your own independent
assessment (based on such advice) as to whether the referenced products or services are
The Bank of New York Mellon SA/NV operates in the Netherlands through its Amsterdam appropriate or suitable for you. This material may not be comprehensive or up to date and
branch at Strawinskylaan 337, WTC Building, Amsterdam, 1077 XX, the Netherlands. there is no undertaking as to the accuracy, timeliness, completeness or fitness for a
The Bank of New York Mellon SA/NV, Amsterdam Branch is subject to limited additional particular purpose of information given. BNY Mellon will not be responsible for updating any
supervision by the Dutch Central Bank (‘De Nederlandsche Bank’ or ‘DNB’) on integrity information contained within this material and opinions and information contained herein are
issues only (registration number 34363596). DNB holds office at Westeinde 1, 1017 ZN subject to change without notice. BNY Mellon assumes no direct or consequential liability for
Amsterdam, the Netherlands. any errors in or reliance upon this material.
The Bank of New York Mellon SA/NV operates in Luxembourg through its Luxembourg This material may not be distributed or used for the purpose of providing any referenced
branch at 2-4 rue Eugene Ruppert, Vertigo Building – Polaris, L- 2453, Luxembourg. The products or services or making any offers or solicitations in any jurisdiction or in any
Bank of New York Mellon SA/NV, Luxembourg Branch is subject to limited additional circumstances in which such products, services, offers or solicitations are unlawful or not
regulation by the Commission de Surveillance du Secteur Financier at 283, route d’Arlon, authorized, or where there would be, by virtue of such distribution, new or additional
L-1150 Luxembourg for conduct of business rules, and in its role as UCITS/AIF registration requirements.
depositary and central administration agent.
Any references to dollars are to US dollars unless specified otherwise.
The Bank of New York Mellon SA/NV operates in France through its Paris branch at 7
Rue Scribe, Paris, Paris 75009, France. The Bank of New York Mellon SA/NV, Paris This material may not be reproduced or disseminated in any form without the prior written
Branch is subject to limitted additional regulation by Secrétariat Général de l’Autorité de permission of BNY Mellon. Trademarks, logos and other intellectual property marks belong
Contrôle Prudentiel at Première Direction du Contrôle de Banques (DCB 1), Service 2, to their respective owners.
61, Rue Taitbout, 75436 Paris Cedex 09, France (registration number (SIREN) Nr. 538
228 420 RCS Paris - CIB 13733). The products and services described herein may contain or include certain “forecast”
statements that may reflect possible future events based on current expectations. Forecast
The Bank of New York Mellon SA/NV operates in Italy through its Milan branch at Via statements are neither historical facts nor assurances of future performance. Forecast
Mike Bongiorno no. 13, Diamantino building, 5th floor, Milan, 20124, Italy. The Bank of statements typically include, and are not limited to, words such as “anticipate”, “believe”,
New York Mellon SA/NV, Milan Branch is subject to limiteed additional regulation by “estimate”, “expect”, “future”, “intend”, “likely”, “may”, “plan”, “project”, “should”, “will”, or other
Banca d’Italia - Sede di Milano at Divisione Supervisione Banche, Via Cordusio no. 5, similar terminology and should NOT be relied upon as accurate indications of future
20123 Milano, Italy (registration number 03351). performance or events. Because forecast statements relate to the future, they are subject to
inherent uncertainties, risks and changes in circumstances that are difficult to predict.
The Bank of New York Mellon SA/NV operates in England through its London branch at
160 Queen Victoria Street, London EC4V 4LA, UK, registered in England and Wales with iFlow® is a registered trademark of The Bank of New York Mellon Corporation under the
numbers FC029379 and BR014361. The Bank of New York Mellon SA/NV, London laws of the United States of America and other countries. iFlow captures select data flows
branch is authorized by the ECB (address above) and subject to limited regulation by the from the firm’s base of assets under custody, as well as from its trading activity with non-
FCA (address above) and the PRA (address above). custody clients, on an anonymized and aggregated basis.
Regulatory information in relation to the above BNY Mellon entities operating out of The Bank of New York Mellon, member of the Federal Deposit Insurance Corporation
Europe can be accessed at the following website: https://www.bnymellon.com/RID. (FDIC).
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