Ranges (Up till 11.

43am HKT)
Currency

Currency

EURUSD

1.12605-1.1320

EURJPY

134.97-135.80

USDJPY

EURGBP

0.7360-95

GBPUSD

119.225120.465
1.5291-1.5316

USDSGD

1.4114-42

USDCHF
AUDUSD

0.9583-0.9632
0.6982-0.7035

USDTHB
USDKRW

35.71-795
1175.6-1181.82

NZDUSD

0.6312-58

USDTWD

32.425-780

USDCAD

1.3230-60

USDCNH

6.4135-6.4400

AUDNZD

1.1025-96

XAU

1135.5-1139.9

Key Headlines
The morning belongs to the ESU5, E-mini S&P Sept
Futures. We suspect someone executed buy order in the
futures and took the index from 1920 to 1930 within a
minute. Volume was not a lot and that accelerated the
move up.
One blogger tweeted that BOJ bought dollars. I totally
do not think so. UsdJpy rally is linked to the
performance of ESU5.
Shanghai opened -4.6% but into late morning, it went
into black ahead of the V-Day celebrations.
Good news for some, Shanghai stock market will be
closed Thursday and Friday as China commemorates the
70th anniversary of the end of World War II.

FX Flows
The story belongs to ESU5, E-mini S&P Sept Futures. We
suspect someone executed buy order in the futures and
took the index from 1920 to 1930 within a minute.
Volume was not a lot and that accelerated the move up.
FX traders watched the US equity futures attentively.
UsdJpy has rallied 0.93% from New York closed of
119.35 to 120.465. One blogger tweeted that BOJ bought
dollars. I totally do not think so. I heard fresh offers are
picked up at 120.50.
Ahead of Aussie GDP data, someone pushed AudUsd
through the barrier option at 0.7000; we printed 0.6998
and bounced back nicely. Im told of bids in AudUsd near
0.6975-85 belonging to the exporters and bids also in
AudNzd near 1.1030. Australia Q2 economy grew 0.2%
from +0.9% over the quarter and up 2.0% from +2.3%
annually. AudUsd took a quick hit to 0.6982 and
bounced back to 0.70-handle. Reason being the market
had already priced in weak GDP numbers and there was
an upward revision in Q1 number. Both our rates and
spot traders concur that AudUsd has seen the bottom.

The UsdCad price action this morning tells us two

stories. As we approached the close, crude futures slide
and this prompted speculators to buy UsdCad. We
suspect stop buy orders were triggered above 1.3240s,
maybe 1.3250s as well. We got to 1.3260 and backed off
little. The other story is market feels very short UsdCad.
Usd drifted to 1.3237, then popped back up to 1.3250. . I
do not see much on downside, unless we get to 1.3155
where stops are. Light offers on top seventies, eighties,
thats all.
The Euro came under pressure during the UsdJpy rally.
The pair then stayed offered throughout. Interestingly, I
was informed that mid-term strategic accounts sold
Euros into the 1.1320-30 area.

Asians
We had a slow start with Usd/Asia seen drifting lower
from open. CNY fixed at 6.3619, some deemed as low but
I think that rate is fair given the move in DXY. That fix
sent USDCNH down to 6.4135 but profit taking from
North Asia surfaced to take that offshore pair to 6.4375.
Most Usd/Asians ended the morning session higher.
UsdKrw was initially offered but later tracked Jpy
weakness and revisited 1180 in the onshore. There were
chatter of agent banks sitting below 1175.
Oil futures down and UsdMyr higher. Reading of the
global positioning index, strategic accounts have turned
from short Myr to long over past 48 hours. We suspect
the move back to the 4.22-handle was short covering of
UsdMyr NDF. Onshore and offshore spread close to par.

Who said what

Fitch: Expects China GDP to grow at 6.5-7.0% in 2015
Fitch: Expects China GDP to grow at 6.0-6.5% in 2016
Fitch: China intervention in stock market does not
affect rating
Fitch: China experimenting with volatility and market
forces
Fitch: Chinas current ratings reflects countrys
strengths and weaknesses
Australia Hockey: Falling GDP growth is consistent
with forecasts
Australia Hockey: Governments economic plan is
working
Australia Hockey: Services exports rising strongly on
Asia demand
Australia Hockey: Business confidence is picking up
BOJ Nakaso: Stable finance and prices contribute to
potential growth
ADB Nakao: Chinese economy is slowing
ADB Nakao: Yuan devaluating a bit reflects market
fundamentals

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.

 Premier Li: China should make the 60b yuan fund to

support small company development market-oriented
and ensure some returns

News & Data

South Korea July BOP Current Account Balance
$10.114bn from $12.186bn
South Korea July BOP Goods Balance $10.859bn from
$13.216bn
Australia Q2 GDP Q/Q up 0.2% from +0.9% (est.
+0.4%)
Australia Q2 GDP Y/Y up 2.0% from 2.3% (est. +2.2%;
revised +2.5%)
AFR: GDP growth posts weakest quarter of
growth since March 2013
Economic growth slowed faster than forecast in the
second quarter as plunging commodity prices blunted
export earnings and mining companies cut back mining
construction. Only a surge in government spending
helped keep the economy from contracting, with gross
domestic product gaining 0.2 per cent from the March
quarter, when it gained 0.9 per cent, the Australian
Bureau of Statistics said on Wednesday. The JulySeptember expansion matched the rate of growth in
March 2013. Annual growth slowed to 2 per cent from
2.5 per cent in the first three months of the year, with
Australia officially recording its 24th straight year of
growth.
http://www.afr.com/news/economy/gdp-growth-postsweakest-quarter-of-growth-since-tony-abbott-wonoffice-20150902-gjd5ky
Martin Wolf in FT: China risks an economic
discontinuity
David Daokui Lee, an influential Chinese economist, has
argued that: The stock market sell-off is not the
problem...the problem not a huge one, but a
problem nonetheless is the Chinese economy itself. I
agree with both points, with one exception. The problem
may prove huge. There are at least three reasons why
Chinas growth might suffer a discontinuity: the current
pattern is unsustainable; the debt overhang is large; and
dealing with these challenges creates the risks of a sharp
collapse in demand. The most important fact about
Chinas current pattern of growth is its dependence on
investment as a source of supply and demand.
http://www.ft.com/intl/cms/s/0/cfe855be-5092-11e58642-453585f2cfcd.html#axzz3kQs0FLwn
FT: Oil bear bets on return to $25 a barrel
One of the biggest bears in the oil market has not been
swayed by the snap rally that pushed the crude price up
by more than 25 per cent in just three trading sessions.
Pierre Andurand, the hedge fund manager who returned
51 per cent before fees last year by betting against the oil

price, told the Financial Times that the market had

overreacted to signs of slowing US crude production and
comments by Opec. He believes prices will head lower
again, possibly dropping below $30 a barrel.
http://www.ft.com/intl/cms/s/0/eaea9aa4-50b3-11e5b029-b9d50a74fd14.html#axzz3kXCFwT00
Greg Ip in WSJ: Is Fear of China Selling
Treasurys Overdone?
Chinas demand for U.S. bonds has been waning this
year amid a slowing economy. Chinas foreign-exchange
reserves, the worlds biggest, has been shrinking after
hitting a high of nearly $4 trillion last year. That reduces
the amount of dollars China recycles into the U.S. bond
market. Over the past week, China has sold Treasury
debt to keep the Chinese yuan from plunging after
devaluing its currency on Aug. 11. While that means
China could sell more Treasury debt in the short term,
few analysts expect China to unload its holdings at a
quick rate. Any sharp rise in bond yields would not only
hurt the U.S. economy, but that Chinas remaining
investments in the U.S. bond market would tumble in
value.
http://blogs.wsj.com/moneybeat/2015/09/01/is-fearof-china-selling-treasurys-overdone/
Telegraph: What if Greece won the argument
after all?
Greece was wrong but it had a point. That seems to be
the subtext of many high-profile pronunciations made by
European politicians and technocrats in recent days.
Perhaps that shouldnt come as such a surprise. There
have always been two broad theories about how the
eurozone should work. On one side stands Germany, the
European Central Bank (which is modelled on the
Bundesbank) and northern European countries like
Finland and the Netherlands. On the other is France, the
Francophile European Commission and the continents
Mediterranean states.
http://www.telegraph.co.uk/finance/economics/118379
58/Greek-crisis-highlights-two-visions-of-theeurozone.html
Nation: Thailand to release SME stimulus
'within 1-2 weeks'
The second phase of the government's latest economic
stimulus package, aimed at helping small and mediumsized enterprises, will begin in a week or two, while the
third phase aimed at wooing foreign investors will be
initiated via a roadshow in three months' time, said
Somkid Jatusripitak, the deputy prime minister in
charge of the economy. The Cabinet yesterday approved
the first phase of the package, which entails Bt120 billion
worth of new capital - Bt60 billion injected into the
Village Fund scheme, Bt36 billion in cash handouts to

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.

7,000 tambon, and Bt24 billion worth of small

government projects.
http://www.nationmultimedia.com/business/SMEstimulus-within-1-2-weeks-30267927.html
WSJ: Canada Illustrates Plight of Rich but
Resource-Dependent Countries
For a small group of the worlds most resourcedependent rich countries, the stalling economy of one of
its members, Canada, is a stark reminder of how Chinas
slowing growth stands to shape the coming years. In
Australia, a 40% drop in iron-ore prices over the past
year has dragged down quarter-on-quarter growth in the
gross domestic product, hitting 0.9% in the first quarter
of 2015. Norways oil-dependent economy grew just
0.2% in the second quarter from the first as oil
investment dropped, and lower prices for dairy, New
Zealands top export, have contributed to reduced
expectations for the countrys growth this year. Canada
is heavily dependent on energy and mining, with crude
oil ranking as its top export and commodities in total
making up about 17% of its economy, according to the
countrys central bank.
http://www.wsj.com/articles/canada-illustrates-plightof-rich-but-resource-dependent-countries-1441120664?
mod=wsj_nview_latest

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.