Ranges (Up till 11.

30am HKT)
Currency

Currency

EURUSD

1.1209-775

EURJPY

135.86-136.10

USDJPY

120.73-121.265

EURGBP

0.7305-295

GBPUSD

1.5341-1.5405

USDSGD

1.4073-1.4122

USDCHF
AUDUSD

0.9610-74
0.7102-36

USDTHB
USDKRW

35.71-83
1175.3-1184.05

NZDUSD

0.6339-87

USDTWD

32.39-820

USDCAD

1.3125-53

USDCNH

6.4110-6.4476

AUDNZD

1.1157-1.1205

XAU

1134.8-1142.8

Key Headlines
Usd weakened against most pairs as risk is taken off;
Euro is the new safe haven
PBOC said it will ask financial institutions trading in
FX Forwards for clients to hold 20% reserves against
onshore FX Forwards. This caused the spreads between
CNH and CNY to narrow.
Ahead of RBA, we saw several macro names Aussie
rates today. Clients want to receive the 1y1y and started
from 1.98-1.99%, targeting 1.75%.

FX Flows
US dollar weakened in Asia; following weak US stock
equities then followed by China data.
The morning began with UsdJpy selling as S&P Futures
trading negative. Speculators were also encouraged by
BOJ not participating in ETF today. The first challenge
came at 120.90 but the bids werent a lot. Weak Chinese
PMI sent risk off and we then took out the 200-day SMA
at 120.79. Despite a strong company profits, Japans Q2
capital spending came out weaker than expected and
does not reflect well on Nikkei. Low 120.585; all eyes on
120.50 support.
Eur and Gbp also strengthened against the Usd. We saw
trend followers buying EurUsd and there were
challengers near 1.1270-80. The 200-day SMA comes in
at 1.1297. Could trade higher if that goes.
AudUsd has traded a narrow range while specs want to
sell Usd for Aud, weak Chinese data has been the
deterrence. Likewise for NzdUsd, there is the dairy
auction out today.
Ahead of RBA, we saw several macro names Aussie rates
today. Clients want to receive the 1y1y and started from
1.98-1.99%, targeting 1.75%.
UsdCad tried to move with flows but seemed that weak
oil futures has hindered downside move. Our trader Sam
said hed rather wait for low-1.30s to go on long. Those

who are still short, should look at taking some money off
the table given event risk today, RBA plus Chinese PMI
release. On rates space, yields of 2-year UST versus 2year CAD is showing UsdCad could bounce back to
1.3250. Orderbook sees bids come in 1.3105 and more
below 1.3075. Offers are light.
From Bipan on Canada June GDP - Markets are
expected another negative number which would meet
the definition of a technical recession, but we think that
the risks are skewed towards a less negative result
pushing momentum in favour of CAD gains tomorrow.
Still, the market is expected to maintain a bearish CAD
outlook over the medium-term which suggests that dips
below 1.3000 will be shallow.

Asians
It is all about China and there is an interesting headline
today that PBOC said it will ask financial institutions
trading in FX Forwards for clients to hold 20% reserves
against onshore FX Forwards. According to Patrick
Bennett, he believes that the central bank is discouraging
banks from anticipating clients outflows, thus buying
more Usd than usual. The move narrowed the spreads
between CNH and CNY. USDCNH took out support
6.4300-20 and dropped to 6.4110. Option traders were
seen cutting long Usd.
Usd weakened against most Asia; fix for the USDCNY at
6.3752 was in line with most expectations. Even UsdMyr
was lower despite oil futures in red.

Who said what

Brazil Jose Guimaraes: President Rousseff discussed
budget with congress leaders
Brazil Jose Guimaraes: Lower House is helping
country weather crisis
Brazil Jose Guimaraes: Economic recovery is about to
start
Brazil Jose Guimaraes: Budget proposal is realistic and
transparent
Japan Aso: Wants to talk about the Chinese economy
at G20 meeting
Japan Aso: Chinese economy has big impact on
Japanese economy
Bloomberg: PBOC to curb speculation in the currency
market and limit capital outflows
Bloomberg: PBOC to impose a 20% reserve
requirement on Usd against onshore FX Forward

News & Data

New Zealand Q2 Terms of Trade Index Q/Q up 1.3% vs
est. +2.5%
South Korea Aug CPI M/M unchanged at 0.2%
South Korea Aug CPI Y/Y unchanged at 0.7%
South Korea Aug Core CPI Y/Y rises 2.1% from 2.0%

These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright 2013 The Poon Report by Vincent Poon. All rights reserved.

 Australia Roy Morgan Weekly Consumer Confidence

Index
Australia Aug AiG Performance of Manufacturing
Index rose to 51.7 from 50.4
Japan Q2 Capital Spending Y/Y up 5.6% vs exp. 8.8%
(prev. 7.3%)
Japan Q2 Capital Spending Ex-Software up 6.6% from
8.1%
Japan Q2 Company Profits up 23.8% from 0.4%
Japan Q2 Company Sales up 1.1% from -0.5%
Australia Aug CoreLogic RP Data House Price M/M up
0.3% from +2.8%
New Zealand Aug QV House Prices Y/Y +11.3% from
+10.1%
South Korea Aug Exports Y/Y fell 14.7% from -3.3%
(est. -5.9%)
South Korea Aug Imports Y/Y fell 18.3% from -15.3%
South Korea Aug Trade Balance at $4.347bn from
$7.762bn
China Aug Manufacturing PMI at 49.7 as expected
from50.0
China Aug Non-Manufacturing PMI at 53.4 from 53.9
Australia Q2 BOP Current Account Deficit widened to
Aud19bn from Aud10.7bn
Australia Q2 Net Exports of GDP fell 0.6% from +0.5%
Australia Jul Building Approvals M/M rose 4.2% from
-8.2%
Australia Jul Building Approvals Y/Y rose 13.4% from
+8.6%
Japan Nikkei Aug Final Manufacturing PMI at 51.7
from 51.9
South Korea Nikkei Aug Manufacturing PMI at 47.9
from 47.6
China Aug Final Caixin Manufacturing PMI 47.3 from
47.1
China Aug Caixin Composite PMI 48.8 from 50.2
China Aug Caixin Services PMI at 51.5 from 53.8
The Economist: The Fed's plan to hike interest
rates
A speech delivered on August 29th by Stanley Fischer,
the vice-chairman of the Federal Reserve, gave no
indication that the Fed had been deterred by recent
market wobbles from its plan to raise rates this year, and
perhaps at the next meeting, on September 16-17th. Why
is the Fed about to raise interest rates?
http://www.economist.com/blogs/economistexplains/2015/08/economist-explains-21?
fsrc=scn/tw/te/bl/ed/Fedinterestrates
WSJ: More New York Democrats Back Iran
Nuclear Deal
A handful of House Democrats, including three from
New York, said Monday they would support President
Barack Obamas nuclear accord with Iran. New York
Democratic Reps. Nydia Velazquez, Yvette Clarke and

Gregory Meeks on Monday all backed the deal reached in

Vienna in July imposes limits on Irans nuclear activities
in exchange for international sanctions relief.
Democratic lawmakers have split over the deal in New
York and New Jersey, where many of their Jewish
constituents worry it could put Israel in more danger
from Iran.
http://blogs.wsj.com/washwire/2015/08/31/more-newyork-democrats-back-iran-nuclear-deal/
WSJ: Iran Deal Could Open Door to Gulf
Businesses
In the 10 years since RAK Ceramics opened a $40
million tile manufacturing plant in Iran, the United Arab
Emirates-based firm has racked up millions of dollars in
losses in the Persian country, fired hundreds of
employees and all but extinguished its kilns. But this
summer Iran struck a nuclear deal with the U.S. and
other foreign powers. Now with sanctions on Tehran
expected to ease, RAK Ceramics is looking to boost
output of the kitchen and bathroom tiles it sells in Iran
and the wider region. Executives for one of the worlds
largest manufacturers of tiles and sanitary ware by
capacity are now betting the long wait on Iran is about to
pay off.
http://www.wsj.com/articles/iran-deal-could-opendoor-to-gulf-businesses-1441013401?
mod=wsj_nview_latest
Telegraph: UK Businesses will crumble under
strain of minimum wage hikes, warns CBI chief
Plans to introduce a national living wage will lead to
more job losses than official estimates suggest unless the
Chancellor lightens the burden on business, the head of
the Confederation of British Industry has warned. John
Cridland, director-general of CBI, described George
Osborne's proposal in the Summer Budget for a big rise
in the minimum wage as the biggest challenge facing UK
companies. He said businesses, particularly in the retail,
hospitality, social care and outsourcing sectors, would
struggle to cope with higher wage costs unless the
Government relaxed public sector contract rules and
allowed the Low Pay Commission to deliver the final
verdict on whether increases were sustainable.
http://www.telegraph.co.uk/finance/jobs/11831249/Bus
inesses-will-crumble-under-strain-of-minimum-wagehikes-warns-CBI-chief.html
Nikkei: Steel product prices sinking amid flood
of Chinese exports
With an economic slowdown having put a damper on
Chinese demand for steel products, manufacturers
unable to cut production significantly are flooding global
markets, sending prices into a tailspin. China's steel
product exports jumped some 28% on the year to 52.4
million tons in the first half of 2015, government

These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright 2013 The Poon Report by Vincent Poon. All rights reserved.

statistics show. Full-year exports are all but certain to

surpass 100 million tons for the first time, beating the
record of about 94 million tons set last year. In
comparison, Japan produced roughly 110 million tons of
crude steel in fiscal 2014.
http://asia.nikkei.com/PoliticsEconomy/Economy/Steel-product-prices-sinking-amidflood-of-Chinese-exports
FT: Chinas wealthy look to raise overseas
investments
Chinas wobbly response to the bursting of its stock
market bubble, the sudden devaluation of the renminbi
and the mystery over the true health of the countrys
economy continue to spook investors, large and small.
But Chinas wealthiest people know exactly what to do in
these bewildering times: get some of their money out.
More than 60 per cent of wealthy Chinese people
surveyed in July by FT Confidential, an investment
research service at the FT, said they planned to increase
their overseas holdings in the coming two years.
http://www.ft.com/intl/cms/s/0/cf5d5458-4fdb-11e5b029-b9d50a74fd14.html?ftcamp=published_links
%2Frss%2Fhome_us%2Ffeed%2F
%2Fproduct#axzz3kQs0FLwn

turbulence. The latest effort involves the famous Chinese

hedge fund manager Li Yifei, whose disappearance from
public view in the past two days has prompted much
speculation. Li is the chairwoman of the China unit of
the Man Group, one of the world's largest hedge funds.
Bloomberg on Monday quoted a source as saying Li had
been taken into custody by police to assist a probe into
market volatility and her mobile phone had been
switched off.
http://www.scmp.com/news/china/policiespolitics/article/1854295/chinas-probe-market-volatilitydeepens-amid-speculation
Kathimerini: Greek election may reopen can of
worms
The upcoming Greek election may reopen the can of
worms that the countrys recent 86 billion euro bailout
deal with its creditors was supposed to close. Given that
no party is likely to emerge from the Sept. 20 vote with a
majority, it may be hard to form a strong government
that can implement the program. Theres even a risk that
there will be yet more elections, tipping Greece back into
crisis.
http://www.ekathimerini.com/201043/opinion/ekathim
erini/comment/greek-election-may-reopen-can-ofworms

Times: Dont touch China, guru warns as the fall

goes on
Hugh Young, the veteran emerging markets guru who
manages 30 billion of Asian equities at Aberdeen Asset
Management, warned novice investors to steer clear of
China as he predicted that the market turmoil could
continue for at least a few more weeks.
http://www.thetimes.co.uk/tto/business/markets/china
/article4543778.ece
SCMP: Beijing issues advisories to arrest stock
market slide
Beijing late last night issued a raft of advisories to boost
state owned enterprise reforms and the stock market,
after it ended its worst month in four years. The central
government will cut back administrative burdens to
facilitate mergers and acquisitions, said a joint statement
by the China Securities Regulatory Commission, China
Banking Regulatory Commission, the Ministry of
Finance and the State-owned Assets Supervision and
Administration Commission.
http://www.scmp.com/business/markets/article/18540
39/chinese-markets-end-down-morning-trade-ledfinance-and-energy
SCMP: China's probe into market volatility
deepens amid speculation over 'meeting' with
top hedge fund manager
Beijing has tightened its grip on a financial market
plagued by irregularities and left reeling from
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright 2013 The Poon Report by Vincent Poon. All rights reserved.