Ranges (Up till 11.

45am HKT)
Currency

Currency

EURUSD

1.0687-1.0778

EURJPY

130.66-131.63

USDJPY

122.23-605

EURGBP

0.70245-51

GBPUSD

1.5208-37

USDSGD

1.4232-54

USDCHF
AUDUSD

1.0060-85
0.7099-0.7134

USDTHB
USDKRW

35.92-95
1170.9-1174.7

NZDUSD

0.6519-80

USDTWD

32.76-95

USDCAD

1.3302-37

USDCNH

6.4055-6.4198

AUDNZD

1.0835-1.0903

XAU

1086.5-1093.6

Key Headlines

EurUsd printed 1.0687 low and bounced back

due to EurJpy demand from Japanese. Option
guys were also buying Euros for their gamma.
Fonterra news prompted short covering in Nzd
and followed by AudNzd stops but all comes
back to square one

FX Flows
Market was nervous at the New Zealand open, EurUsd
punched down to 1.0730 from NY close of 1.0760.
Option related buying occurred and Euro was back up to
1.0778. Calm restored 20 minutes later. EurUsd
returned to test the lows with US names as the major
sellers. We got to 1.0724 and bounced back. There
werent a lot of bids down there but it was interesting
that decent EurJpy bids appeared below 131.20. I heard
macro funds were sellers and filled the EurJpy bids.
Once that was done/dusted, Eur got down to 1.0687.
Judging from the EurUsd price action, since we broke
below 1.0724 this morning, we have not been able to get
back above 1.0730.
UsdJpy opened at 122.40 versus NY close 122.60. Unlike
the Euro, UsdJpy has been orderly and calm. US names
were sellers of EurJpy but better buying from Japanese.
There were good buying initially surrounding 131.15-18;
US guys won that round and took it to 130.66. Japanese
resurfaced and bought the cross and pushed it up to
131.40s.
After the Fonterra announcement, NzdUsd traded touch
higher. One Japanese security house pushed Nzd higher
aggressively through 0.6560 and printed 0.6568
instantly. It is believed it was stoploss execution in
NzdUsd and this sequentially activated stops in AudNzd
below 1.0860, took the cross to 1.0735. Kiwi retail sales
improved in Oct, up 1.6% versus estimates of +1.4% and
Septs +0.1%. But no impact on currency. Demand was
over and the pair drifted to 0.6535 and AudNzd returned
to 1.0890.

Its all in AudNzd this morning. Cross started at 1.0889

and got sold down to 1.0833 after stop sell orders were
taken out. Once the supply was done, the pair returned
to 1.0885. AudUsd did little. Got down to 0.7099 but
that was due to Euro weakness. I hear better buying
under 0.7070.
Little I can pen on UsdCad most of the time it was a
Usd story. Canadian Finance Minister Bill Morneau
spoke to reporters in Antalya and said lower Cad offers
opportunities for exporters and these companies can
cope with currency fluctuations.

Asians
To be honest, Asian equity indices didnt do badly.
Shanghai Composite fell near 1.7% and by late morning,
it was down 0.1%. I suspect the paring of loss is linked to
Yuan inclusion to SDR.
Usd/Asia stayed firm throughout the morning onshore
UsdKrw was in the 1172-handle most of the time. Market
is somehow nervous over this report about North Korea
declares no-sail zone in possible indication of missile
launch.
General chatter that macro names have been capping
UsdCad under 1.4260; I suspect these are option related
selling. Interbank keeping close watch on UsdMyr could
use UsdSgd as proxy.
USDCNY fixed at 6.3750. 95-points higher than last
Friday but not a surprise since Usd has strengthened so
much. Onshore also opened higher from last closing at
6.3750 and then challenged offers at 6.3800.
Seems market is still short spot USDCNH and vols. Spot
rose to 6.4196 and not backing off despite locals capping
onshore. I heard that mainlanders were better sellers in
the 1-year CNH forward points above 1700.
Patrick
Bennett
wrote
further
trade-weighted
deprecation has been expected and we maintain that
view. In tandem with a view of further broad USD
strength, we target USDCNH to 6.50-6.55.

Who said what

Canada Finance Minister Morneau: We dont

intend on intervening in anyway in currency
markets
Canada Finance Minister Morneau: Lower dollar
creates opportunities for exporters
Canada Finance Minister Morneau: Confident
that firms can cope with fluctuations in currency

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.

Canada Finance Minister Morneau: Liberals still

plan on changing stock option rules
Fonterra: Increases its forecast earnings per
share range for current FY 45-55 cents
Fonterra: Keeps milk payout at Nzd4.60 per kilo
Fonterra: Sees FY dividend 34-401 cents
Fonterra: Sees milk collection falling at least 5%
Y/Y
ECB Mersch: Appears that Greece finding it hard
to implement pact
ECB Mersch: Sees multiple consequences from
negative rates
ECB Mersch: ECB discussion doesnt hinge on
Fed discussion
MPC Porametee: Thb interest rate direction is
still not clear

News & Data

New Zealand Oct Performance of Services Index

56.2 from 59.3
New Zealand Q3 Retail Sales Ex-Inflation Q/Q at
1.6% from +0.1% (est. +1.4%)
Japan Q3 Prelim GDP SA Q/Q fell 0.2% from
-0.3%
Japan Q3 Prelim GDP Annualised SA Q/Q fell
0.8% from -1.2%
Japan Q3 Prelim GDP Nominal SA Q/Q flat
from +0.1%
Japan Q3 Prelim GDP Deflator Y/Y up 2% from
1.5%
Japan Q3 Prelim GDP Private Consumption Q/Q
up 0.5% from -0.7%
Japan Q3 Prelim GDP Business Spending Q/Q
fell 1.3% from +0.7%
UK Nov Rightmove House Prices M/M fell 1.3%
from +0.6%
UK Nov Rightmove House Prices Y/Y up 6.2%
from +5.6%
Thailand Q3 GDP SA Q/Q up 1% from +0.4%
Thailand Q3 GDP Y/Y up 2.9% from +2.8%

WSJ: On Capitol Hill, Another Banking Battle

Brews
A year ago, the financial industry stirred up a political
furor by inserting relief from postcrisis regulation into a
catchall year-end spending bill. As Congress scrambles
to wrap up its budget for this year, banks and their
political allies are again angling to insert unrelated rulereduction measuresand bracing for a new battle. The
two most significant changes under consideration this
year: easing supervision requirements for banks with
about $50 billion assets; and shielding BlackRock Inc.
and other big asset managers from new banklike
regulation. In Senate debate last Tuesday, Sen. Elizabeth

Warren (D., Mass.), the bte noire of the financial

industry, warned she wouldnt let the proposals through
without a fight.
http://www.wsj.com/articles/on-capitol-hill-anotherbanking-battle-brews-1447630789?
mod=wsj_nview_latest
FT: Credit Suisse prepares to set up trading floor
in Dublin
Credit Suisse is on course to become the first
international bank to set up a major trading floor in
Dublin. The Swiss bank wants to move 40 traders and 60
support staff to Ireland as part of a cost-cutting drive,
sources familiar with the plans said. That will create one
of the biggest trading floors in Dublin, a city which has
long attracted support functions of some of the worlds
biggest banks. Credit Suisses talks with the Central Bank
of Ireland predate the restructuring announcement, but
are part of the same drive to cut costs, a source familiar
with the situation said.
http://www.ft.com/intl/cms/s/0/54c7388a-8a23-11e59f8c-a8d619fa707c.html#axzz3rahRIqbV
Xinhua: Xi says Chinese economy predicted to
grow about 7 pct this year
President Xi Jinping said Sunday that the Chinese
economy is predicted to grow about 7 percent this year,
which will continue to contribute as high as about one
third to the global growth. "China has the confidence and
capability to maintain medium-high growth," Xi said
while addressing a Group of 20 (G20) summit in Antalya
in southwest Turkey.
http://news.xinhuanet.com/english/201511/16/c_134818967.htm
WSJ Letters: Trumps Right on Hacking, Wrong
on Yuan
Donald
Trumps
Ending
Chinas
Currency
Manipulation (op-ed, Nov. 10) mistakenly conflates
cyberbreaches and currency manipulation. Chinas
cyberattacks are proven and continue. Their theft of
American intellectual property is its own tax on the U.S.
economy and future growth. Yes, something bold must
be done. Yet the critique of currency manipulation is
stale.
http://www.wsj.com/articles/trumps-right-on-hackingwrong-on-yuan-1447612732?mod=wsj_nview_latest
WSJ: Chinas Currency and the Dollar-Debt Time
Bomb
Investors betting China wont take another run through
the bulls market shop ought to be careful. Things are
looking more settled than in August, when a surprise
devaluation by China sent paroxysms through global
markets. Stocks in developed countries have mostly
recovered, even as investors contend with the likelihood

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.

the Federal Reserve will raise rates. One possible reason

for the calm is that investors may have reckoned that
China, having backed off after witnessing the problems
that it unleashed in August, is loath to repeat the
experience. Indeed, the value of the yuan has been
remarkably stable since the summers policy change.
http://www.wsj.com/articles/chinas-currency-and-thedollar-debt-time-bomb-1447608685?
mod=wsj_nview_latest
FT: Caterpillar warns lower Chinese demand will
limit sales
Caterpillar, the worlds largest mining and construction
equipment manufacturer by sales, has warned that it
does not expect Chinese demand for excavators to
recover to the peaks of 2010-12. Tom Pellette, group
president for construction industry equipment, made the
remarks as the Chinese economy recorded its slowest
growth rate since 2009 in the third quarter, due to
declining construction and factory activity, which many
economists do not believe has bottomed out yet. The
forecasts also highlight Beijings efforts to rebalance the
economy away from its traditional drivers such as
manufacturing and investment and towards consumer
spending. It also demonstrates the impact of the
stimulus programme, which the government unleashed
during the global financial crisis, had on demand.
http://www.ft.com/intl/cms/s/0/25ce20f8-895f-11e590de-f44762bf9896.html
Yonhap News: N. Korea declares no-sail zone in
possible indication of missile launch
North Korea has recently declared a no-navigation zone
in the waters near its eastern coastal city of Wonsan, a
possible indication that the country could test-launch a
missile in the area, sources said Sunday. "North Korea
declared the no-sail zone in the East Sea area near
Wonsan, Gangwon Province, effective from Nov. 11 to
the 7th of next month," a government source said. "It is a
vast area of the sea, so we are closely watching whether
the North will launch a Scud or a new type of ballistic
missile."
http://english.yonhapnews.co.kr/national/2015/11/15/9
1/0301000000AEN20151115000700315F.html
FT: Japanese banks to accelerate unwind of
cross-shareholdings
Nearly six months since Japan established its first
corporate governance code, the countrys three largest
banks have set accelerated targets for selling down their
estimated Y10tn strategic stakes in corporate clients.
The move, which has seen Mizuho, Sumitomo Mitsui
and Mitsubishi UFJ all pledging to speed up the sale of
so-called cross-shareholdings, is a timely fillip for Prime
Minister Shinzo Abe and a growth programme that some
have accused of running out of steam.

http://www.ft.com/intl/cms/s/0/bf714ea6-8b76-11e58be4-3506bf20cc2b.html#axzz3rahRIqbV
Roger Bootle in Telegraph: Migration is pushing
the EU towards a new crisis
The European Union is now closer to an existential crisis
than at any time in its history. For once, the issue is not
directly economic. Although the financial problems of
Greece are still bubbling away, the major threat to the
EU is from the mass migration of people, an issue that is
likely to come under even greater scrutiny following the
attacks in Paris on Friday.
http://www.telegraph.co.uk/finance/economics/119976
09/Migration-is-pushing-the-EU-towards-a-newcrisis.html
SCMP: Canadian pension fund arm Ivanhoe
Cambridge doubling investment in China
Ivanhoe Cambridge, the real estate investment arm of
Canadas second-largest pension fund, is doubling its
investment in mainland China and looking for
opportunities in other Asian economies, including Hong
Kong, Singapore, India and Japan. The company,
holding C$48 billion of assets as of the end of June, aims
to build up its exposure in mainland China to between
US$1.5 billion and US$2 billion in the next three to four
years, mainly through two partnership deals it signed in
June. That is part of its strategy to double the weighting
of growth markets, including Asia-Pacific and Latin
America, in its global portfolio.
http://www.scmp.com/property/hong-kongchina/article/1878160/canadian-pension-fund-armivanhoe-cambridge-doubling
Business Times: China watchdog starts probe
into mutual funds - media
China's markets regulator has started probing mutual
funds for illegal activity, an unnamed source told the
respected China Business News on Monday. The
country's regulators have been cracking down on illegal
stock trading, "malicious" short-selling and insider
dealing since bourses fell sharply in mid-June. The
investigation by the China Securities Regulatory
Commission (CSRC) may include some brokerages and
will involve a wide ranging audit which is expected to
conclude before the end of this year, the source told
China Business News.
http://www.businesstimes.com.sg/bankingfinance/china-watchdog-starts-probe-into-mutualfunds-media

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.