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Ranges (Up till 11.

40am HKT)
Currency

Not much to pen in Can. Move was in line with Usd


weakness. Bids are reported below 1.3000.

Currency

EURUSD

1.0969-1.1015

EURJPY

135.78-136.00

USDJPY

123.43-84

EURGBP

0.70685-96

GBPUSD

1.5509-39

USDSGD

1.3681-1.3737

USDCHF
AUDUSD

0.9598-0.9625
0.7264-99

USDTHB
USDKRW

34.81-90
1065.5-1073.8

NZDUSD

0.6566-0.6604

USDTWD

31.446-660

USDCAD

1.3024-50

USDCNH

6.2094-6.2263

AUDNZD

1.1046-75

XAU

1094.7-1099.1

Key Headlines
US dollar was softer this morning on back of monthend selling only pair that went higher was UsdMyr.
Creditors are supposed to return to Athens and talks to
kick off on Tuesday but chances are slim. Former Greek
Finance Minister Varoufakis claim of Plan B isnt going
to look good for PM Tsipras.
Topic of Yuan band widening after last weeks opinion
from State Council. Some banks have begun to forecasts
band widening in Sept.
Interesting comment from The Economist...The failed
nuclear deal with North Korea was four pages long. The
Iran deal is well over 100!

FX Flows
Extremely slow start to the week for FX overall, Usd
ended up softer on back of month-end selling.
Eur$ traded 1.0969 low where reports of bids are said to
be at 1.0940-50. Usd weakness sent Euro towards 1.10handle offers have been light. 100-day SMA at 1.1005,
hence we expect sellers above that. One gossip of stops at
1.1020 but I doubt the credibility. Sell orders should be
scattered up to 1.1050 and decent stops above 1.1060.
Creditors are supposed to return to Athens and talks to
kick off on Tuesday but chances are slim.
Japanese were better sellers after the Tokyo fix, said to
be for month end supply and with Nikkei remaining in
negative, UsdJpy was offered throughout the day. Keep
an eye on 123.35, I heard good stops planted there.
Offers are at 123.85 up to 124.10.
Softer Usd pushed the Aud and Nzd towards the high
side of range. Heard that Aud bids from 0.7230, decent
at 0.7210. Offers are light up at 0.7300 (high 0.7297).
Likewise, high in Kiwi is 0.6604 and some talk of offers
in Kiwi above 0.6600.

Spot Gold trades near 1098, sentiment is negative but


physical buying is giving some support.

Asians
Usd/Asia was bid at open but most turned lower as we
moved towards the end of morning session. The UsdMyr
is probably the only pair that stayed firm throughout the
session and I think it is linked to domestic issues.
UsdMyr opened higher. The agent banks were reported
at 3.8120, from last weeks 3.8080. Pressure on Myr
continued into late morning; heard agent banks lifted
their offers up to 3.8150. Economic data is light this
week and politics remain tense. Couple of interesting
news articles. In The Malaysian Insider, DPM
Muhyiddin said PM Najib must answer to WSJs
allegations on funds transfer. In WSJ, a report on palm
oil migrant workers revealing abuses and onerous
working conditions. This WSJ report is likely to add a
bigger hurdle to the Trans-Pacific Partnership
negotiations.
UsdKrw opened at 1070.0 in the onshore market and
Usd stayed bid amid a defensive Korea Composite Index.
Only worthy data out this week is the June industrial
production numbers on Friday. In todays Nikkei report,
Chris Williamson, chief economist at Markit said PMI
numbers paint a troubling picture for South Korea. Into
mid-morning, UsdKrw turned lower. Our trader believes
it is selling from exporters that pushed Usd to 1166.90
low.
UsdThb started at 34.90, slow drifted to 34.81. Selling
from offshore has instigated some profit taking from
onshore.
Another CNY fix on this 6.11-handle making it 34consecutive days. Onshore spot was fairly stable and
USDCNH shifted lower to 6.2200. Topic of Yuan band
widening after last weeks opinion from State Council.
Some banks have begun to forecasts band widening in
Sept.

Who said what


BOJ Nakaso: Japan price trend is improving steadily
BOJ Nakaso: Expects CPI to reach 2% around H1 of
2016
BOJ Nakaso: No chance to BOJ stance of adjusting
policy if needed
China NDRC: To limit bond sales by some coal miners
for violations
China NDRC: To cut funding support for some coal
miners for violations

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.

Moodys: China core shadow banking growth falls


below nominal

News & Data


Japan June PPI Services Y/Y at 0.4% from 0.6%
China June Industrial Profits Y/Y fell 0.3% from
+0.6%
WSJ: Brazil Struggles With Inflation, and
Expectations
Brazils version of the Federal Reserve will almost
certainly raise its benchmark Selic interest rate next
week for the 16th time in just over two years in a bid to
fight escalating inflation. Trouble is, prices arent
cooperating. Brazils annual inflation rate recently hit
9.25%. That is more than double the official 4.5% target
and up substantially from 6.5% in April 2013, when the
bank started raising rates.
http://www.wsj.com/articles/brazil-struggles-withinflation-and-expectations-1437964295?
mod=wsj_nview_latest
Wolfgang Mnchau in FT: The make believe
world of eurozone rules
During the recent Greek crisis, I came across a
completely new rule. I first heard it from Wolfgang
Schuble, the German finance minister. It says that
countries are not allowed to default inside the eurozone.
But a default was perfectly fine once they leave the euro,
on the other hand. Actually, as it turns out, there is no
such rule.
http://www.ft.com/intl/cms/s/0/e903ad46-3201-11e58873-775ba7c2ea3d.html#axzz3h1fUJuce
Ken Griffin in WSJ: Overlooking the Other
Sources of Liquidity
Suddenly, everyones talking about liquidity. As the
Federal Reserve steps back from an unprecedented
period of monetary intervention, investors are rightfully
focused on the possibility that, after years of relative
calm, the U.S. could be in for a period of increased
market volatility. There is debate about the role that
banks will play as liquidity providers during periods of
heightened volatility, and how reforms stemming from
the 2008 financial crisis may affect that role. Missing
from much of this debate, however, is recognition of the
radical transformation that has taken place in many
fixed-income markets as barriers to entry have fallen and
new liquidity providers have stepped forward.
http://www.wsj.com/articles/overlooking-the-othersources-of-liquidity-1437950015?
mod=wsj_nview_latest
BCC David Mundell: 'No plans' for second
independence referendum

No contingency plans have been made for a further


independence referendum after next year's Holyrood
elections, the Scottish secretary has said. David Mundell
was asked about what plans his department had in
parliamentary questions by an SNP MP. On Sunday, Alex
Salmond said a second referendum was inevitable with
the issue "a question of timing".
http://www.bbc.com/news/uk-scotland-scotlandpolitics-33668976
WSJ: Oil Heading for Fall as Diesels Engine
Sputters
Mainland-listed shares in Chinas national oil champion,
PetroChina, are up 27% so far this year, while their Hong
Kong-listed equivalents are down 9%. The former have,
of course, been juiced by Beijings desperate measures to
prop up the mainland stock market. The latter are more
reflective of what is really happening with oil supply and
demand.
http://www.wsj.com/articles/oil-heading-for-fall-asdiesels-engine-sputters-1437935038?
mod=wsj_nview_latest
The Australian: Commodities in free fall: miners
bracing for $192bn in asset pain
Persistent weakness in already clapped out commodity
prices is triggering a new round of asset value
writedowns on top of the $US140 billion notched up by
the global mining industry since 2011. The new round is
not expected to match the $US58bn impairment hit the
global industry took in 2013 when it became clear that
the decade-long China-led boom in prices and demand
was over.
http://www.theaustralian.com.au/business/miningenergy/commodities-in-free-fall-miners-bracing-for192bn-in-asset-pain/story-e6frg9df-1227457817019
FT: Italys Pier Carlo Padoan calls for political
union to save euro
Italys finance minister Pier Carlo Padoan has called for
deeper eurozone integration in the aftermath of the
Greek crisis, saying a move straight towards political
union is the only way to ensure the survival of the
common currency. Italy is calling for a wide set of
measures including the swift completion of banking
union, the establishment of a common eurozone budget
and the launch of a common unemployment insurance
scheme to reinforce the common currency. He said an
elected eurozone parliament alongside the existing
European Parliament and a European finance minister
should also be considered.
http://www.ft.com/intl/cms/s/0/2c57fb62-3205-11e58873-775ba7c2ea3d.html#axzz3h1fUJuce
FT: Greece bailout monitors question access to
ministries

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.

Despite an agreement that gives teams from the EU and


the International Monetary Fund access to some
ministries and data, officials said only middle-ranking
technical teams and not mission chiefs would
participate for now. The decision to send lower-level
negotiators on Monday is the latest sign of concern
among Greeces creditors that, despite the summit
agreement two weeks ago to restart talks, there remain
deep differences on the way forward that could still
derail negotiations before an August 20 deadline.
http://www.ft.com/intl/cms/s/0/e7e90f50-339b-11e5b05b-b01debd57852.html?ftcamp=published_links
%2Frss%2Fhome_us%2Ffeed%2F
%2Fproduct#axzz3h1fUJuce
Kathimerini: Varoufakis claims had approval to
plan parallel banking system
Former Finance Minister Yanis Varoufakis has claimed
that he was authorized by Alexis Tsipras last December
to look into a parallel payment system that would
operate using wiretapped tax registration numbers
(AFMs) and could eventually work as a parallel banking
system, Kathimerini has learned.
http://www.ekathimerini.com/199945/article/ekathime
rini/news/varoufakis-claims-had-approval-to-planparallel-banking-system
Roger Bootle in Telegraph: There's no need to
panic about China's falling stock markets
Since June 12, the Shanghai Composite Index has fallen
by 20pc. At one point it had fallen by a third. On
occasions the index has fallen by as much as 7pc in one
day. There has been widespread anxiety, in China and
outside, that these sharp falls might cause not only
financial chaos but also a severe hit to the real economy.
These fears are grossly overdone. Even after recent falls,
the stock market is still up by about 100pc over the past
year. Indeed, it is up by a quarter from the beginning of
this calendar year. So the notion that massive losses on
stocks are going to cause a plunge in the Chinese
economy looks far-fetched.
http://www.telegraph.co.uk/finance/comment/1176424
9/Theres-no-need-to-panic-about-Chinas-falling-stockmarkets.html

http://www.wsj.com/articles/chinas-gsr-venturesplans-5-billion-fund-for-overseas-tech-acquisitions1437909282
SCMP: Beijing widening of yuan trading band
aimed at IMF, pushes for market reforms
Chinas decision to widen the yuans trading band
marked Beijings latest efforts to push ahead with market
reforms to increase its chance of being included in the
IMFs currency basket later this year despite the
backdrop of a weakening economy. The wider band is
believed linked to the IMFs review on the Special
Drawing Right basket later this year as China considers
it a priority to be added in a reserve currency basket that
currently only includes the US dollar, euro, yen and the
sterling in tacit recognition of its status as the worlds
second largest economy.
http://www.scmp.com/business/markets/article/18437
71/beijing-widening-yuan-trading-band-aimed-imfpushes-market-reforms
SCMP: The US$26 trillion debt problem that is
crushing competitiveness in China
China owes its stock market boom and bust to the one
thing that is crushing the competitiveness of every part
of the world's second biggest economy - debt. The
nation's debt mountain is widely estimated to top 250
per cent of gross domestic product, roughly equivalent to
US$26 trillion, and is unlikely to peak before 2018.
http://www.scmp.com/business/markets/article/18437
75/us26-trillion-debt-problem-crushingcompetitiveness-china
ECNS: Pension fund poised for riskier
investment
China will allow its pension fund to tap into riskier asset
investments once top policymakers approve the plan, a
senior official said on Friday. The draft plan, supported
by a majority of the public, would allow the country's
basic pension fund to be invested in new channels,
including domestic stock markets, but cap the maximum
proportion of investment in stocks and equities at 30
percent of the fund's total net assets.
http://www.ecns.cn/business/2015/07-25/174465.shtml

WSJ: Chinas GSR Ventures Plans $5 Billion


Fund for Overseas Tech Acquisitions
The quest by Chinese firms to acquire global technology
is about to get a $5 billion boost. Chinese venture-capital
firm GSR Ventures is raising a $5 billion fund to buy
overseas assets, according to people familiar with the
situation. The fund, which is expected to be announced
Monday, will target deals to acquire companies in
technology, Internet and biotechnology industries
globally where the Chinese market is key to growth
prospects, they said.
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.