Ranges (Up till 11.
50am HKT)
Currency
Currency
EURUSD
1.13245-395
EURJPY
135.3-55
USDJPY
119.45-55
EURGBP
0.7321-275
GBPUSD
1.5458-80
USDSGD
1.3875-1.3914
USDCHF
AUDUSD
0.9555-64
0.7243-78
USDTHB
USDKRW
35.42-51
1127.0-1135.0
NZDUSD
0.6784-0.6816
USDTWD
32.393-580
USDCAD
1.3015-48
USDCNH
6.3760-6.3891
AUDNZD
1.0658-89
XAU
1167.5-1171.3
Key Headlines
Not a lot in economic data released this
morning. Focus was on the RBA Oct 6 Meeting
Minutes, which offered nothing new. Then
Canadian elections and local media are
projecting Liberals with majority.
Canadian media CTV projected Justin Trudeaus
Liberal Party to win elections sets up UsdCad
buying.
Just published from CIBC Research: A potential
surprise result in the Canadian election with
Liberals poised to win a majority government at
the time of publication. While the uncertainty
that would have accompanied a minority
government has likely been lifted, we think that
the markets are likely to maintain a cautious
bias towards Canada due to 1) a less positive
fiscal trajectory given that the Liberals were the
only party whose platform projected deficits,
albeit small ones, 2) a new government by a
party that has been out of power since 2006, and
3) potential economic uncertainties that may
alter the current fiscal projections.
Most Usd/Asia pairs backed off from high with
little explanation, we suspect it was just position
adjustments. One pair in contrast with the rest is
UsdSgd. Opened at 1.3890 and traded up to
1.3915.
For nearly 9 hours, UsdJpy has not been outside
119.45-55!
FX Flows
RBA Oct 6 Minutes offered nothing new. Pure short
squeeze in AudUsd to 0.7278 and that was it. I hear
offers are planted at 0.7300-20 and stop buy orders
thereafter. Bids from exporters at 0.7200 and rates side
pointing to weaker Aud, 0.7150.
Our strategist Patrick Bennett said the general market
might be looking for more to validate some building
expenses for an ease, though we need to remember,
some of those events are after this time. The outlook on
the Fed Res talked of only 50% chance before year-end
and not fully priced until April. Like other central banks,
Fed will be later than was previously expected/priced,
puts onus back on themselves to do what is necessary for
their own economies. We have seen easing in Asia and
expect more, so could RBA ease again? Absolutely,
though their tone and the track of domestic data does
not make it look anything like urgent or imminent.
Believe it or not, UsdJpy has been 119.45-55 since IMM
closed. Very little to pen and gossip about. BOJs
participation in ETF is small, nothing exciting. On
topside, I hear of sellers atop 119.50-60 and buyers lurk
119.35.
Failure to break above 1.5500 has attracted short
positions in Gbp$. Position Index is showing a decent
short out there in Cable. Heard bids are planted near
1.5450 and there are talks of stop buy orders above
1.5510.
Canadian media CTV projected Justin Trudeaus Liberal
Party to win elections sets up UsdCad buying. As polls
closed, other media predicted Liberals with majority.
Boosted by AudUsd backing off 0.7260s, UsdCad
advanced to 1.3030s. Our Toronto strategist Bipan said
market is expecting a Liberal minority and now reacting
to the possibility of majority. As of now, counting is still
on and even if it is a majority, we expect price action to
stabilize. Next level of resistance from here is at the
1.3170 mark.
Asians
Most Usd/Asia pairs backed off from high with little
explanation, we suspect it was just position adjustments.
One pair in contrast with the rest is UsdSgd. Opened at
1.3890 and traded up to 1.3914. There was a chatter of
M/A flow, could have come from Olam/ADM Cocoa deal
being sealed last week. UsdSgd pulled back to where it
opened and stayed firm. I heard that speculators have
put on some short-dated upside Usd call options.
As UsdMyr backed away from high, points between
onshore spot and 1-month NDF has narrowed to +20
from -100 yesterday. On politics, market is keep an eye
out for release of Malaysia budget on Fri Oct 23. Local
media New Straits Times, all questions pertaining to the
Myr2.6bn donation deposited into the bank account of
PM Najib Razak will be answered during the current
Parliament sitting.
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.
Who said what
RBA Minutes: Economic, Financial conditions to
inform policy stance
RBA Minutes: More evidence of economy
rebalancing towards non-mining
RBA
Minutes:
Economy
rebalancing
increasingly supported by Aud fall
RBA Minutes: Rate cuts earlier in 2015
supporting aggregate demand
RBA Minutes: Overall growth expected to have
strengthened in Sept quarter
Japan Amari: To remove tariffs on 95% of
products under TPP
Japan Amari: To remove tariffs on 81% of
agricultural products
China MOFCOM: Warns investors against
underground oil futures trading
News & Data
South Korea Sept PPI at -4.5% from -4.4%
Australia ANZ Roy Morgan Weekly Consumer
Confidence Index slipped to 113.3 from 115.6
WSJ: Its Not All Bad News in Reports Out of
China
Mondays gross-domestic-product report offered the
latest sign that the worlds second-largest economy is
slowing. But the gloom is overdone, said some portfolio
managers who are focusing on the nations booming
service sector. A broad assessment of the most-recent
figures, including official government data as well as
private analysis, suggests that the rebalancing is on
track, said Nicholas Lardy, a senior fellow at the
Peterson Institute for International Economics in
Washington and a China expert.
[Link]
mod=wsj_nview_latest
Telegraph: China to own a third of Hinkley Point
nuclear power station
The first UK nuclear power plant in a generation will be
33.5pc owned by China, with EDF set to announce a
landmark deal on Hinkley Point on Wednesday. Bosses
at the French energy giant, which is building the 24.5bn
station in Somerset, sealed an agreement with executives
from Chinas state-owned CGN just hours before Chinese
President Xi Jinping arrived in Britain for a four-day
visit.
[Link]
gy/11941766/[Link]
Telegraph: Bank of England Governor Mark
Carney to intervene in Brexit debate
Mark Carney is to make a potentially seismic
intervention into the debate on the UK's place in the
European Union. The Governor of the Bank of England
is to make a speech on the subject on Wednesday in what
could prove to be one of the most crucial developments
to date in the looming referendum campaign. The
speech, to be given at St Peter's College, Oxford, will be
closely watched for any hint as to whether the Governor
believes the UK should stay in the EU.
[Link]
98/[Link]
Reuters: Blackstone nears deal to buy
Stuyvesant Town for $5.3 billion
Blackstone Group LP (BX.N) is nearing a deal to acquire
Manhattan's Stuyvesant Town-Peter Cooper Village
apartment complex for around $5.3 billion, according to
a person familiar with the matter who was not
authorized to discuss it publicly. Blackstone declined to
comment on Monday.
[Link]
feedType=RSS&feedName=topNews&utm_source=twitt
er
SCMP: China's watchdogs step in to avert
Sinosteel bond default
The National Development and Reform Commission and
the State-owned Assets Supervision and Administration
Commission have, in a rare intervention in the bond
market, pre-empted a potential default by Sinosteel. This
is the first time state regulators have intervened in a
corporate credit case. After a meeting with NDRC
representatives on Friday, Sinosteel debt holders were
first asked not to redeem the bonds and then told the
redemption date would be delayed by a month to
November 16. The emergency meeting came as investors
could from today redeem up to two billion yuan of the
principal on the bond that matures in 2017.
[Link]
9831/chinas-watchdogs-step-avert-sinosteel-bonddefault
FT: Chinas capital outflows top $500bn
Capital outflows from China topped $500bn in the first
eight months of this year, according to new calculations
by the US Treasury that highlight the shifting fortunes in
the global economy. In its latest semi-annual report to
Congress on the global economy, the US Treasury
dropped its previous assessment that the renminbi was
significantly undervalued. Instead, the Treasury said
the Chinese currency was below its appropriate
medium-term valuation. The new language reflects the
cautious welcome that the Obama administration has
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.
given to Beijings efforts in recent months to prop up the
renminbi since China announced on August 11 that it
would allow a greater role for the market in setting the
currencys exchange rate.
[Link]
Nikkei: EU eyes ban on Thai seafood industry
The fishing industry of Thailand, the world's third
largest exporter of seafood, could be facing annual losses
of up to 650 million euros if the European Commission
decides to impose a trade ban by the end of this year.
The EU has long considered blocking all fish imports
from Thailand as it investigates illegal fishing practices
and allegations of slave labor in Thailand's gigantic fleet
of 45,000 fishing vessels. A total ban would not only cost
the country hundreds of millions of euros in annual
exports to the EU, but potentially a lot more if it
damages Thailand's reputation as one of the world's
major tourism destinations.
[Link]
NST: RM2.6b donation issue to be answered this
Parliament sitting
All questions pertaining to the Myr2.6bn donation
deposited into the bank account of PM Najib Razak will
be answered during the current Parliament sitting.
[Link]
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.