Ranges (Up till 11.

50am HKT)
Currency

AudUsd stops have developed beneath 0.7260 but bids

are also gathering near 0.7240.

Currency

EURUSD

1.0932-57

EURJPY

135.55-84

USDJPY

123.91-11

EURGBP

0.7017-28

GBPUSD

1.5570-99

USDSGD

1.3777-1.3809

USDCHF
AUDUSD

0.9692-0.9704
0.7264-0.7302

USDTHB
USDKRW

35.09-14
1168.9-1172.0

NZDUSD

0.6550-72

USDTWD

31.639-760

USDCAD

1.3147-76

USDCNH

6.2164-6.2200

AUDNZD

1.1067-1.1124

XAU

1081.4-1086.0

Key Headlines
Australian July retail sales were better than expected
and Aud traded higher. There are offers mentioned
above 0.7325 but lets see what RBA does.
An interesting remark by BOJ Deputy Governor when
he spoke to parliament this morning. He said there is a
need to be careful about communications with market. Is
he trying to prevent repeat of June 10 when Governor
Kuroda to signal the Jpy weakness should end?
The focus was definitely on Asia despite RBA rates
decision today. To be honest, so far the stock market is
behaving well, Kospi positive while Nikkei is flat
Usd/Asia creeping higher.
No one is looking at Greece, not till we get close to Aug
20.

FX Flows
Since Europeans left for the day, UsdJpy slipped into
123.85-124.10 range and we have not gotten an offside.
BOJ Deputy Governor Iwata appeared in parliament and
said he sees little risks of possible Fed and BOE rate
hikes. He felt that market has priced in rate hikes and
BOJ monetary policy concentrating on price stability and
not to target FX. It was however interesting that he said
there is a need to be careful about communications with
market. Usual sell orders are still intact above 124.25 to
124.60. I hear buy orders are raised from 123.45 to
123.70-80.
As we worked our way into NY close, AudNzd demand
was felt following report in AFR that Australia's Origin
Energy to sell all of its shares in New Zealand's Contact
Energy for about Nzd1.8bn. The cross peaked above
1.1115 then backed off to 1.1080. Apparently this news
wasnt new. AudNzd had another test on top side when
Australia reported a better than expected retail sales.
Trade balance was weak but it was in line with
expectations. Revisions improved for all.
AudUsd rose to 0.7302 ahead of RBA. Some talk of sells
near 0.7320 but no confirmation of credibility. Weak

Euro came under pressure immediately after the Tokyo

opened; the only reason I can think of is the trigger of
stop loss orders at 1.0940, belonging to intraday
accounts. No one is looking at Greece, not till we get
close to Aug 20. However, one macro name I talked to
said there is a build-up of short EurGbp positions ahead
of super Thursday. Bids in EurUsd have lightened up , or
the AAA names buying have decided not to show hand.
Offers remain above 1.0990.
UsdCad printed one point higher than North American
session at 1.3176. Overall, it has been lacklustre. Even
with AudUsd touching 0.73-handle; UsdCad just backed
off to 1.3164. Offers on top are light while buyers await
low 1.31s.

Asians
The focus was definitely on Asia despite RBA rates
decision today. To be honest, so far the stock market is
behaving well, Kospi positive while Nikkei is flat
Usd/Asia creeping higher.
UsdSgd printed 1.3800 and took out a barrier option
there. It didnt take long to take out the stops at 1.3805
printed 1.3809. Seeing profit taking from proprietary
traders both on-and-offshore. We are likely to see
demand from model funds below 1.3770. Market talked
above another barrier at 1.3850 and even more stops
above 1.3905.
Korean equities started the session in black according
to WSJ, it was due to the July inflation which remains
below 1%. UsdKrw, like rest of Usd/Asia is firm. Have a
look at the JpyKrw chart, as long as this UsdJpy stays
above 124.00; UsdKrw should also stay bid.
Believe it or not! CNY fixed again in the 6.11-handle at
6.1177 (44 days in a row!)

Who said what

Economic Info Daily: China will likely continue
relatively loose monetary policy and may cut some
banks RRR in 2H
US Senator Lindsey Graham: China cheating and no
ones calling them on it
US Senator Lindsey Graham: Foreign policy
clenched fist, open hand, you choose
Jeb Bush: US economic growth should target 4%
BOJ Iwata: Do not see any risk posed by possible rate
hikes by Fed or BOE
BOJ Iwata: It is possible that FX market have fully
priced in rate hikes by other central banks

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.

 BOJ Iwata: FX level not problematic reflecting

fundamentals
BOJ Iwata: Jpy wont fall if rate differentials priced in
BOJ Iwata: Market sets FX rate
BOJ Iwata: Too early to talk about exit
BOJ Iwata: Need to be careful about communications
with market
Citic Sec: Suspends short selling business

payment on its Public Finance Corporation (PFC) bonds.

Broader defaults could hit investors widely, as nearly one
out of every three of all U.S. muni mutual funds have
holdings in Puerto Rico, a U.S. territory. Bond prices for
Puerto Ricos debt already have plunged this year,
hurting performance.
http://www.marketwatch.com/story/what-puerto-ricosmissed-debt-payment-means-2015-07-16

News & Data

The Globe and Mail: Two-thirds of Canadians

votes up for grabs, poll suggests
Its unsettled, unpredictable and wide open. This
election campaign is not only a three-way race most
voters are still up for grabs. Only 40 per cent of
Canadians have picked a party and say thats the only
one theyll consider. Most voters, three-fifths of the
electorate, are still considering voting for two or more
parties, or arent sure who they might pick, according to
Nanos Research data from rolling surveys that provide
an insight into potential swing votes. In fact, 20 per cent
of those surveyed would still consider voting for any one
of three or more parties.
http://www.theglobeandmail.com/news/politics/twothirds-of-canadians-votes-up-for-grabs-pollsuggests/article25819640/

South Korea July CPI M/M up 0.2% from flat

South Korea July CPI Y/Y unchanged at 0.7%
South Korea July Core CPI Y/Y unchanged at 2.0%
Australia ANZ Roy Morgan Weekly Consumer
Confidence up 112.9 from 112.5
New Zealand July QV House Prices Y/Y rose 10.1% vs
9.3%
New Zealand ANZ Commodity Price fell 11.2% from
-3.1%
Australia June Trade Deficit Aud2.933bn from
Aud2.751bn
Australia June Retail Sales rose 0.7% from 0.3%
Australia Q2 Retail Sales Ex Inflation Q/Q rose 0.8%
from 0.7%
WSJ: Oil-and-Gas Debt Deals Sting Investors
It is shaping up as a cruel summer for debt investors
wagering on a rebound in the oil-and-gas business.
Funds managed by Franklin Resources Inc., Blackstone
Group LP and Oaktree Capital Group LLC, among
others, are facing paper losses on substantial
investments this year in exploration-and-production
companies. The sector is coming under further pressure
as oil prices have turned downward again, dropping
below $46 a barrel in New York to a four-month low.
http://www.wsj.com/articles/oil-and-gas-debt-dealssting-investors-1438634208?mod=wsj_nview_latest
AFR: Origin Energy to sell Contact Energy stake
at $NZ4.65 a share
Macquarie Capital has been mandated to sell Origin
Energy's $NZ1.82 billion stake in Contact Energy stake
at $NZ4.65 a share via a block trade. The offer price is
pegged at a 7.5 per cent discount to the last close and an
8.25 per cent discount to the volume-weighted average
price.
http://www.afr.com/street-talk/origin-energy-to-sellcontact-energy-stake-at-nz465-a-share-20150803giq2q2
MarketWatch - Puerto Rico sees first-ever
default: Whats next for bond investors
Puerto Rico saw its first-ever bond default on Monday, a
move that potentially could ripple through other Puerto
Rican debt, threatening U.S. investors with more losses.
The small U.S. territory failed to make a $58 million

WSJ: Foreign Investors Turn Frosty on

Australian Debt
Touching down recently in Tokyo, Australian bondmarket strategist Martin Whetton looked forward to
amicable talks with groups of Japanese investors.
Halfway through his meetings, Mr. Whetton, who works
for Australia & New Zealand Banking Group, realized
that his Japanese clientsamong the most prolific
buyers of Australian government debtwere turning
frosty on the trade. Several spoke of the darkening
outlook for resource-rich Australias economy, citing a
plunge in commodity prices, escalating unemployment,
and the risk of a property bust. Many were alarmed, too,
by recent big falls in the Australian dollar, already
generating significant losses on their largely unhedged
bond investments.
http://www.wsj.com/articles/foreign-investors-turnfrosty-on-australian-debt-1438635474?
mod=wsj_nview_latest
Ambrose Evans-Pritchard in Telegraph: Puerto
Rico triggers historic default as austerity spiral
deepens
Puerto Rico has triggered the biggest municipal default
in US history, risking years of bitter legal warfare with
creditors and an austerity "death spiral" with echoes of
Greece. The island Commonwealth finally ran out of
money on Monday after a desperate effort to stay afloat,
and missed a final deadline for a $58m payment handing over just $628,000. It implies a sweeping

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.

default on much of its $72bn debt burden, equal to

100pc of Puerto Ricos gross national product (GNP) and
more than five times the debt ratio of California or
Texas.
http://www.telegraph.co.uk/finance/economics/117812
49/Puerto-Rico-triggers-historic-default-as-austerityspiral-deepens.html
The Telegraph: EU pays jobless migrants to come
to Britain
Unemployed migrants are being given thousands of
pounds to find work in Britain under an EU scheme, The
Telegraph can disclose. It has emerged that the UK has
taken a third of the young migrants involved in the Your
First EURES Job programme. Some 1,178 unemployed
young people from the Continent have been found jobs,
training or apprenticeships in Britain under the jobs
mobility programme since it was set up in 2012. That
accounted for 34.7 per cent of the 3,387 jobs handed out
so far, much higher than second place Germany, which
has provided 659 placements. At the same time, just 25
Britons under 30 have found work under the scheme,
less than 1 per cent of the total.
http://www.telegraph.co.uk/news/uknews/immigration
/11781637/EU-pays-jobless-migrants-to-come-toBritain.html
WSJ: IMF Says Sanctions Take Toll On Russia
Russias economy faces the loss of as much as 9% of its
inflation-adjusted value of goods and services it
produces if Western sanctions and Moscows retaliatory
measures remain in place in the medium term, the
International Monetary Fund said on Monday. The IMF
said Moscows financial and economic authorities acted
well to handle sanctions and a drop in oil prices, which
helped to absorb external shocks. But the IMF warned
that further escalation of geopolitical tensions would
send the ruble falling, would boost inflation and capital
outflows, and further batter domestic demand.
http://www.wsj.com/articles/imf-says-sanctions-taketoll-on-russia-1438657218?mod=wsj_nview_latest

SCMP: Strong stimulus not necessary to spur

Chinas growth: state media commentary
China has no need for "massive stimulus measures" to
keep its economy steady, the state-run People's Daily
said yesterday, in an apparent effort to assuage growing
concern over the country's slowing growth. The frontpage commentary came amid a sustained fall in factory
activity figures and speculation that the ruling
Communist Party's top leaders are holding their summer
policy talks in Beidaihe , Hebei province, at which
economic development is expected to be on top of their
agenda.
http://www.scmp.com/news/china/economy/article/18
46281/strong-stimulus-not-necessary-spur-chinasgrowth-state-media
WSJ: China Curbs Short Selling; Commodities
Weakness Spreads
China shares made tentative gains after officials
announced fresh steps to rein in short selling, while
commodities weakness spread to some Asian currencies,
including the Malaysian ringgit. Late Monday, the
Shanghai and Shenzhen stock exchanges announced
revised rules on short selling to curb high-frequency
trading, according to statements published on their
official websites. Under new rules, short sellers must
wait at least one day to cover their positions and pay
back loans used to buy shares. Previously, investors
could cover their positions within the same day.
http://www.wsj.com/articles/china-curbs-short-sellingcommodities-weakness-spreads-1438653066?
mod=wsj_nview_latest

Kathimerini: Greek Pension reforms to apply

from July, official says
Greece and its lenders discussing a third multi-billioneuro bailout deal have agreed that pension reforms will
affect only those who retired after the end of June, Labor
Ministry officials said on Monday. When creditors
agreed in July to negotiate a deal aimed at keeping it
afloat and in the eurozone, Greece committed to
implementing major reforms, such as scrapping early
retirement, by the end of October.
http://www.ekathimerini.com/200214/article/ekathime
rini/news/pension-reforms-to-apply-from-july-officialsays
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.