Ranges (Up till 11.
47am HKT)
Currency
Currency
EURUSD
1.0991-1.1017
EURJPY
135.55-88
USDJPY
123.26-50
EURGBP
0.7026-45
GBPUSD
1.5629-54
USDSGD
1.3586-1.3617
USDCHF
AUDUSD
0.9445-61
0.7437-89
USDTHB
USDKRW
34.035-065
1139.1-1143.2
NZDUSD
0.6696-0.6724
USDTWD
31.00-31
USDCAD
1.2724-47
USDCNH
6.2129-54
AUDNZD
1.1105-49
XAU
1154.9-1156.7
Key Headlines
The only thing that is growing in Greece is debt. Latest
analysis by the IMF said Greek financing need through
end-2018 is now estimated at Eur85bn and debt is
expected to peak at close to 200% of GDP in the next two
years!
IMF conclusion is that if Europe wants this bailout to
work, it must either grant Greece three decades grace
before repaying its debts, or cut the face value of its
borrowings deeply.
Chinese data published this morning were better than
what experts have forecasted. The Q2 growth of 7%
versus expectations of 6.9%; retails sales and industrial
production numbers were also good. Yes, good news for
economy but bad news for China stocks. Citing off
FastFT, there is a negative correlation between Chinas
stock and the economy. Retail investors feel that a slower
growth meant that authorities would have to unleash
stimulus measures and todays data gave the PBOC less
push for more stimulus.
FX Flows
Very slow session we had ahead of China Q2 GDP. Only
thing was Euro drifting lower into the 1.09-handle. IMF
officially publishes their analysis on Greece and said
Greek financing need through end-2018 is now
estimated at Eur85bn and debt is expected to peak at
close to 200% of GDP in the next two years. Yes, the only
thing that is growing in Greece.
Short term guys are bidding Euros at 1.0975-85 and
better ones under 1.0900 said to be for SWF. Likewise,
offers are light at 1.1080-90 and better above 1.1100.
Since IMM closed, UsdJpy has been 123.26-41 and
traded in the thirties most of the time. We broke the
range following a better than expected Chinese Q2
growth. Our trader Jon suggests this pair to trade range
123.10-60. BOJ pulled no surprises, left all unchanged
and maintaining monetary base by Jpy80trln per year.
Aussie took out some stops above 0.7460 and then rose
to 0.7485 following the Chinese data. Offers are lined up
above 0.7500 and this instigated some selling ahead
from short-term punters. Decent stop buy orders are
now at 0.7530. Our trader Sam also prefers to going
short ahead of 0.75-handle, stop near 0.7600 and target
0.71-handle.
BOC today and common consensus for 25bp cut. We saw
a fellow Canadian bank pushing the UsdCad into the
1.2740s. Offers are light and bids are scattered from
1.27-teens into 1.26-handle.
Asians
Chinese data published this morning were better than
what experts have forecasted. The Q2 growth of 7%
versus expectations of 6.9%; retails sales and industrial
production numbers were also good. Yes, good news for
economy but bad news for China stocks. Citing off
FastFT, there is a negative correlation between Chinas
stock and the economy. Retail investors feel that a slower
growth meant that authorities would have to unleash
stimulus measures and todays data gave the PBOC less
push for more stimulus.
For the past 26 days, PBOC has fixed the USDCNY midrate within this 6.11-handle. Today at 6.1152 what we
call stable fix. As such, USDCNH has been stuck in this
6.21-handle. 1-year CNH points have eased with more
expectations of easing through the year.
Onshore spot UsdKrw saw fresh buying following the
break above 1140. Kospi remains in black despite story in
Bloomberg over concerns that Daewoo Shipbuilding may
report losses and need to restructure debts. Shares for
the shipbuilder fell more than 34% in the morning.
UsdThb sat in a narrow range 34.035-065; it does feel
like strong demand coming from onshore banks. Strong
resistance at 34.11.
1.3636 poses a challenge for UsdSgd bulls. There was a
talk of Japanese selling the pair post fix, but little
credibility. I think the move was on back of higher Aud.
Market traded down to 1.3586 briefly and returned to
1.36-handle. Some chatter that MAS is likely to shift
current modest and gradual appreciation path of NEER
to neutral at Oct policy meeting.
No ones talking about Myr agents, guess there is not
panic at moment ahead of Muslim holidays this week.
Onshore UsdMyr traded 3.8000-50.
Who said what
White House: President Obama to hold news
conference at 1.00pm EST
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.
Fed George: US retail sales disappointing but not
significant part of GDP
Fed George: Businesses a little more cautious in
spending
Fed George: Consumers are well positioned to spend
looking forward
Fed George: Beginning to see growth in Europe in
longer term
Fed George: Slow China growth does not change US
economy trajectory
Fed George: FOMC has been more progressive shifting
language on lift off
Fed George: Needs some dose of courage, zero rates
not needed now
Fed George: Sooner start raising rates; will have more
options
BHP: Expects $2bn impairment charge after US assets
review
China NBS: Employment situation better than
expected
China NBS: Economy performing within an expected
range
China NBS: China did not underestimate GDP deflator
China NBS: China did not overestimate GDP
China NBS: Big odds for higher GDP growth in H2
than in H1
China NBS: Efforts to stabilise stock market have
shown effects
China NBS: Government is capable, confident can
prevent systemic risks
HK SFC orders trading suspension of Hanergy Thin
Film Power
News & Data
South Korea June Jobless Rate Unchanged at 3.9%
(exp. 4%)
Australia July Westpac Consumer Confidence Index
slipped to 92.2 from 95.3
Australia July Westpac Consumer Sentiment SA M/M
at -3.2% from -6.9%
China June Retail Sales Y/Y rose 10.6% from 10.1%
China June Retail Sales YTD Y/Y unchanged at 10.4%
China June Industrial Production Y/Y up 6.8% from
6.1%
China June Industrial Production YTD Y/Y up 6.3%
from 6.2%
China Q2 GDP Y/Y unchanged at 7.0%
China Q2 GDP SA Q/Q up 1.7% from 1.3%
China Q2 GDP YTD Y/Y unchanged at 7.0%
China June Fixed Assets Ex-Rural YTD unchanged at
11.4%
WSJ: Iran, World Powers Reach Nuclear Deal
Iran reached a landmark nuclear agreement with the
U.S. and five other world powers, a long-sought foreign
policy goal of President Barack Obama that sets the
White House on course for months of political strife with
dissenters in Congress and in allied Middle Eastern
nations.
[Link]
FT: Economist concerns Fed will repeat rate rise
mistakes
Is the US Federal Reserve at risk of repeating mistakes
made in the boom of the 2000s? Esther George, the
president of the Kansas City Fed, on Friday invoked
lessons from the Feds last rate-hiking cycle as she urged
her colleagues not to delay the first increase any longer.
[Link]
%2Frss%2Fhome_us%2Ffeed%2F
%2Fproduct#axzz3fixAwELL
FT: IMF signals it could walk away from Greek
bailout deal
International Monetary Fund has sent a strong signal
that it may walk away from Greeces new bailout
programme, arguing that it will not be able to participate
if European creditors do not offer Athens substantial
debt relief. IMF said recent turmoil in the Greek
economy would lead debt to peak at close to 200 per cent
of economic output over the next two years. That view
was reinforced by the IMF on Tuesday when it said it
would not be able to disburse 16.4bn in its own funds
that European officials are counting on unless an
agreement on debt relief was concluded.
[Link]
WSJ: Another Greek Can-Kicking
If youre Angela Merkel, youre willing to settle for
another extend-and-pretend bailout of Greece because
you dont want Grexit on your watch. But you also dont
want a shellacking from your domestic German voters
who are weary of seeing their money go to prop up the
Greeks. Thats why youre pleased with co-conspirator
France stepping out as defender of Greece and promoter
of fake plaudits for the Greek bailout.
[Link]
Ambrose Evans-Pritchard in Telegraph: IMF
stuns Europe with call for massive Greek debt
relief
The International Monetary Fund has set off a political
earthquake in Europe, warning that Greece may need a
total moratorium on debt payments for 30 years and
perhaps even long-term subsidies to claw its way out of
depression. "The dramatic deterioration in debt
sustainability points to the need for debt relief on a scale
that would need to go well beyond what has been under
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.
consideration to date, said the IMF in a confidential
report. The findings are explosive. The document
amounts to a warning that the IMF will not take part in
any EMU-led rescue package for Greece unless Germany
and the EMU creditor powers finally agree to sweeping
debt relief.
[Link]
85/[Link]
Kathimerini: Tsipras admits reservations about
deal but urges support
Prime Minister Alexis Tsipras admitted in an interview
on Tuesday night that he does not believe in the
agreement he struck with the countrys lenders but urged
his MPs to back it in Parliament on Wednesday as it is
the best prospect of bringing about a recovery. In an
interview with public broadcaster ERT, Tsipras admitted
that mistakes had been made during negotiations over
the last six months and said he takes full responsibility
for that. However, he also said that it was clear some of
Greeces partners had a plan to push the country out of
the eurozone.
[Link]
rini/news/tsipras-admits-reservations-about-deal-buturges-support
Telegraph: Europe's collective aversion to Grexit
is baffling
Who can explain why the rest of the eurozone is so keen
to hang on to Greece? The collective aversion to Grexit is
baffling. It amounts to an almost quasi-religious faith in
the benefits of the euro project. It certainly defies all
secular evidence. It cant be based on economics and the
hope of shared prosperity Greeces parlous state is the
most obvious rebuttal. It cant be about solidarity not
when Greek cartoonists are outfitting Angela Merkel in
fully Nazi regalia.
[Link]
25/[Link]
FT: Tsipras will rely on opposition to beat Syriza
rebels in vote
Alexis Tsipras, the Greek prime minister, will rely on
opposition lawmakers to shore up his fractious Syriza
party in a parliamentary vote on Wednesday; fresh
austerity measures must be passed to unlock 86bn of
crucial financial support, but they could leave his
government in tatters. Locked in his Maximos Mansion
for a day of meetings with senior party officials, Mr
Tsipras spent Tuesday attempting to suppress a rebellion
within Syriza and drawing up plans for Wednesdays
hastily arranged vote; the outcome will be a litmus test of
his leadership, and of the allegiance of MPs within his
mutinous anti-austerity party.
[Link]
WSJ: Germany Yet to Swallow Some Economic
Medicine Prescribed for Greece
If Greece implements all the economic measures agreed
to with its creditors, the country could end up with a
more-flexible economy than Germany. Many of the
overhauls on Athens to-do list are inspired by the labor
market, welfare and budget measures that Germany
enacted in 2003 and 2004, when it was struggling with
high unemployment and slow growth.
[Link]
mod=wsj_nview_latest
Nikkei: Individuals' intense buying gives support
to stocks
Tokyo shares surged Tuesday as institutional investors
cheered not only the Greek bailout deal, but also the
strong purchasing by their retail counterparts during last
week's market downturn.
[Link]
Telegraph: Britain's banks face 40bn bill as a
result of George Osborne's extra taxes
Britains banks are facing a 40bn decade-long tax
headache as a result of industry specific levies imposed
by the Chancellor. New figures show that the banking
sector will pay out 39.35bn in five extra taxes in
addition to corporation tax and national insurance between 2010/11 and 2020/21.
[Link]
sandfinance/11739894/[Link]
AFR Chinese stock market: Australian property
brokers cash in on turmoil
The almost $US4 trillion rout is fuelling demand for less
volatile assets in one of China's favourite real-estate
markets, where a plunging Australian dollar is making
property cheaper for offshore investors. Chinese
developers last month snapped up most of the 15 sites in
and around Melbourne sold by CBRE Group - five times
the property broker's usual monthly tally. The bulk of the
deals were sealed after the Shanghai Composite Index
started tumbling.
[Link]
SCMP: China's stock market turmoil may hit car
and travel sectors
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 motoring industry is feeling the pain of the stock
market turmoil with some middle-class consumers
scrapping plans to buy cars and considering cutting
unnecessary spending after suffering losses. The stock
market turmoil has also prompted middle-class
consumers to consider cutting back on unnecessary
spending, such as overseas holidays and meals at
expensive restaurants.
[Link]
39189/chinas-stock-market-turmoil-may-hit-car-andtravel-sectors
From MNI:
The China Asset Management and the Harvest Fund,
two leading domestic fund management firms,
announced that they have both set up new stock funds
worth Yuan40bn each. Unlike other stock funds which
raise money from hundreds and thousands of investors,
the fund set up by Harvest has only two investors, which
include Harvest itself, while the fund by China Asset
Management has a total of only 264 investors. Market
watchers believe these two funds could be backed by the
Chinese government and that the government-owned
China Securities Finance Corp is likely a big investor in
both these funds, creating another vehicle which Beijing
could use to intervene in the stock market.
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.