Ranges (Up till 11.

20am HKT)
Currency

Currency

EURUSD

1.1205-295

EURJPY

135.03-34

USDJPY

120.31-69

EURGBP

0.7324-37

GBPUSD

1.5294-1.5315

USDSGD

1.4155-80

USDCHF
AUDUSD

0.9690-0.9707
0.7001-63

USDTHB
USDKRW

35.75-85
1182.9-1188.6

NZDUSD

0.6347-75

USDTWD

32.471-805

USDCAD

1.3262-76

USDCNH

6.4420-6.4520

AUDNZD

1.1015-76

XAU

1131.4-1133.7

Key Headlines
At 10.00am Beijing, world tuned to TV to watch the
live China V-Day parade. The first thing that came to
mind was former President Jiang Zemin. He being at the
ceremony has dispelled the vicious rumour of his house
arrest. The other, former Premier Wen Jiabao. So, 2
rumour downed.
China markets are closed today and tomorrow; most
Asian equity indices are in positive territory, only
Australia in red and I was informed the drop is due to
reverse in big banking stocks.
On an interesting note, several banks analysts,
economists and Dow Jones are putting out pieces on
Singapore dollar.

FX Flows
China markets are closed today and tomorrow, the focus
has now shifted to European Central Bank meeting at
1.45pm CET, 7.45pm NY. Most people are not expecting
Mario Draghi to launch new easing measures, probably
some verbal intervention.
Since yesterdays NY close, EurUsd has not regained
above 1.1300. I suspect sovereign sellers up near 1.132040 area. Positive opening in Asia and Euro slipped lower.
I hear bids are scattered under 1.1200 to 1.1180. Nothing
interesting in the options expiry but there are
interesting ones maturing Fri, the NFP day.
Looked like AudJpy was bought on short-covering in the
early morning, UsdJpy offers around 120.50 were all
soaked up. Fixing demand got market to 120.69 then
backed off. The next layer of offers should be at 120.79,
where the 200-day SMA sits. Surprisingly, global
positioning index is showing that Jpy long positions
increased last 24 hours. Yen gurus sees this pair ranging
118-123. They want to be long UsdJpy but not at this
level; say mid to low 119s.
The initial AudJpy buying (early morning) got the
AudUsd up to 0.7063, heard there were some stops
taken out too near 0.7050. Aussie data was mixed; trade

balance improved but retail sales fell 0.1%. From Patrick

Bennett Aussie exports rose 2% while imports were
flat. The detractor to the Aussie GDP yesterday was the
net exports. These does suggest a better start to Q3.
AudUsd revisited 0.7001, heard exporters lined up again,
below figure.
Little to pen on Canadian dollar. It has been so boring.
Oil futures down 0.9% as I write, UsdCad at 1.3270.

Asians
US dollar traded firmer on Asia open; so were the equity
indices. China markets are closed today and tomorrow,
resumes on Monday Sept 7.
On an interesting note, several banks analysts,
economists and Dow Jones are putting out pieces on
Singapore dollar. Ahead of the MAS Semi-annual
Monetary Policy Statement in Oct, some experts believe
the possibility of more easing has increased. I think MAS
will be watching Fed a hike plus hawkish remarks will
equate to EM crisis. A week ago, one of the Singapore
ministers said weakening of Malaysian Ringgit is not
beneficial to Singapore. Since that comment, Sgd has
weakened against the Myr. Coincidence?
These reported generated a lot of interest from
speculators. Global positioning index is showing very
small short Sgd, so we might see limited downside in
UsdSgd. Intraday resistance is 1.4195.
UsdMyr is calm, onshore steadily at 4.23-handle and
offshore goes premium +80 or so.
The man has been sitting on the bid in UsdHkd at 7.7500
since Aug 27. How long more before we get another
SNB?

Who said what

US Treasury Sec Lew: US will hold China accountable
on FX
US Treasury Sec Lew: China should signal FX
intentions by actions taken
IMF: Tells G20 that accommodative policies remain
essential in advance economies
IMF: Surplus economies like Germany should do more
to boost growth
IMF: Policy priorities taken more on urgency versus
Feb G20
IMF: Recent correction should not discourage China
from reforms
BOJ Kiuchi: hard to hit 2% inflation by monetary
easing alone
BOJ Kiuchi: Im more cautious about GDP, CPI than
board median

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 Kiuchi: Firms still cautious about domestic capex

plans
BOJ Kiuchi: Massive JGB buying distorting bond
prices
China President Xi: Military parade will not allow
history to repeat itself
Malaysia PM Najib: Malaysia economy is exposed to
global market volatility
Malaysia PM Najib: Malaysia is in stronger position as
compared to 1997/98

News & Data

South Korea Aug Foreign Reserves at $367.94bn from
$370.82bn
New Zealand Q2 Value of All Buildings SA up 1.6%
from 1.0% (revision up 1.5%)
South Korea Q2 Finalised GDP Q/Q unchanged at
0.3%
South Korea Q2 Finalised GDP Y/Y unchanged at 2.2%
Australia Aug AiG Perf of Services Index up 55.6 from
54.1
Australia July Trade Deficit improved to Aud2.46bn
from Aud2.933bn (est. Aud3.16bn)
Australia July Retail Sales M/M fell 0.1% from +0.7%
Japan Aug Nikkei Services PMI 53.7 from 51.2
Japan Aug Nikkei Composite PMI at 52.9 from 51.5
Business Times Economists cut 2015 Singapore
growth forecast to 2.2%
Singapores forecasters have tempered both their growth
and inflation forecasts for 2015 - and some say more
downgrades are in store. This is especially after the latest
manufacturing data deepened worries about a possible
technical recession in the third quarter. Private-sector
economists now expect the economy to grow just 2.2 per
cent this year - down from the 2.7 per cent projected a
quarter ago. They are also more pessimistic on the
outlook for the manufacturing and construction sectors,
and most services clusters. This is according to the MAS
September issue of its Survey of Professional
Forecasters. The quarterly poll was sent out on Aug 11
and received 23 responses; findings were released on
Wednesday.
http://www.businesstimes.com.sg/governmenteconomy/economists-cut-2015-singapore-growthforecast-to-22
FT Lex Column - China services: untouchable
As China loses its edge as exporter to the world, it will
rely more on consumer services to power the economy.
Service activity is hard to measure last year
necessitating an upward revision to GDP of more than 3
per cent but there is clearly scope for expansion. The
sector accounts for less than half of GDP, a long way
behind Korea (three-fifths) and Japan (three-quarters).
But it is expanding. While August data from Chinas

National Bureau of statistics showed a severe contraction

in manufacturing, the non-manufacturing purchasing
managers index came in at 53.4 a mild slowdown
from Julys 53.9 but still reasonably robust.
http://www.ft.com/intl/cms/s/3/656fa3c8-5159-11e5b029-b9d50a74fd14.html#axzz3kQs0FLwn
WSJ: Devaluation Strengthens Chinas Hand at
IMF
Chinas sudden decision last month to devalue its
currency riled neighbors and fueled investors fears
about a sharp slowdown in the worlds No. 2 economy.
But the move has won over the International Monetary
Fund and even secured restrained praise from the U.S.
Treasury Department. The currency maneuver has
positioned the Chinese government to press for a greater
international role for the yuan during visits to a series of
Group of 20 meetings starting this week and a visit to
Washington later this month.
http://www.wsj.com/articles/devaluation-strengthenschinas-hand-at-imf-1441226171?mod=wsj_nview_latest
FT: China should welcome its short sellers
China is not the only country to experience a loss of faith
in free-market principles when stock markets fall. Many
others, including the UK and US, banned short selling of
shares in banks and brokers in 2008. In principle, they
supported open, liquid securities markets in which
buyers and sellers interact freely; in practice, they
panicked. It did not help in fact, it did more harm than
good for both buyers and sellers. Stocks fell as much as
they would have done, but it became more expensive to
trade and regulators further damaged their reputations.
The costs appear to outweigh the benefits, Chris Cox,
the former chair of the US Securities and Exchange
Commission, concluded in calmer times.
http://www.ft.com/intl/cms/s/0/3a973f70-5155-11e58642-453585f2cfcd.html?ftcamp=published_links
%2Frss%2Fhome_us%2Ffeed%2F
%2Fproduct#axzz3kQs0FLwn
WSJ: Foreign Firms Feel Chinas Chill
Global investors now are showing little appetite for
Chinese assets. A total quota of 300 billion yuan that
Beijing granted last year giving foreign investors
unprecedented access to shares trading on Chinas main
stock market in Shanghai via a trading link with Hong
Kong is less than half used nearly a year after the
programs launch. New programs also appear stalled as
regulators struggle to shore up a stock market down 39%
since hitting a seven-year high in June. A second link
between Hong Kong and Chinas technology-oriented
Shenzhen bourse that was expected as soon as October
hasnt received a start date.
http://www.wsj.com/articles/foreign-firms-feel-chinaschill-1441232257?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.

SCMP: China's securities regulator slaps fines on

financial platforms for trading breaches
Authorities in China on Wednesday slapped fines on
three financial information firms, including one
controlled by Alibaba founder Jack Ma Yun, as part of a
crackdown to stabilise stocks. Hundsun Technologies,
partly owned by Ma's financial investment company,
Shanghai Mingchuang Software Technology and
Zhejiang Hexin Flush Network Services were fined 453
million yuan in total, with another 151 million yuan of
"illicit gains" confiscated by the China Securities
Regulatory Commission.
http://www.scmp.com/business/markets/article/18546
61/chinas-markets-mixed-midday-ahead-holidayparade-hong-kong-shade

http://www.ft.com/intl/cms/s/3/eaedb3aa-5186-11e5b029-b9d50a74fd14.html#axzz3kQs0FLwn

Times: Greek leftist leader calls for return of

drachma
Greece should dump the euro and bring back the
drachma because its latest bailout package is doomed to
fail, according to a former minister who is likely to
attract a large chunk of the countrys left-wing vote in the
forthcoming election. Panagiotis Lafazanis, who was
energy minister until he broke ranks with Alexis Tsipras,
the Greek prime minister, last month to form his own
left-wing party, says his former mentors Syriza party
betrayed the democratic will of the population when it
signed up to austerity in exchange for fresh financial aid.
http://www.thetimes.co.uk/tto/news/world/europe/arti
cle4545805.ece
Kathimerini: Opinion polls suggest election
surprise may be on the cards
New opinion polls published on Wednesday indicated
that the days leading up to the September 20 elections
will be extremely tense as the surveys suggest that what
looked like a certain SYRIZA victory a few weeks ago
could even become a victory for New Democracy.
http://www.ekathimerini.com/201136/article/ekathime
rini/news/opinion-polls-suggest-election-surprise-maybe-on-the-cards
FT - Tesco: Won down
Tesco, the UK retailer, has reportedly agreed to sell
Homeplus, its South Korean unit, to a consortium of
investors for about $6bn. It is a shame it had to go.
Homeplus is Tescos biggest overseas business (even if
sales are still less than an eighth of the UK operation)
and one of its better ones. It has avoided many of the
problems faced in South Korea by rivals such as
Carrefour. It is the second-biggest player in the local
market and its operating margins, at about 4 per cent of
sales, beat those of the UK operation. The sale price
should meet market expectations.
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.