Ranges (Up till 11.

58am HKT)
Currency

Asians

Currency

EURUSD

1.0989-1.1039

EURJPY

133.46-90

USDJPY

121.06-60

EURGBP

0.7180-99

GBPUSD

1.5305-39

USDSGD

1.3938-97

USDCHF
AUDUSD

0.9762-95
0.7206-65

USDTHB
USDKRW

35.52-61
1131.4-1138.3

NZDUSD

0.6730-93

USDTWD

32.40-68

USDCAD

1.3153-84

USDCNH

6.3905-73

AUDNZD

1.0698-1.0714

XAU

1162.6-1165.01

Key Headlines

CPC's 18th Central Committee kicked off its fifth

plenary session in Beijing top on the agenda,
growth target for 2016-2020.
Despite Nikkei at +1.14% (at time of writing)
UsdJpy has not been able to advance due to
pressure from Japanese names.
Eurosceptics PiS claimed victory in Polish
elections. PiS opposes joining the Eurozone any
time soon and promises more welfare spending
on the poor.

FX Flows
During the early hours on Monday, EurUsd traded down
to 1.0989 from 1.1018. Some said the move was linked to
trigger of stops surrounding 1.0995. Buying from option
occurred and brought EurUsd back to square one. Offers
are lined up above 1.1030 and thickens into 1.1070s.
Japanese were better sellers of UsdJpy this morning
bringing the pair from 121.35 to 121.09. Some linked the
sales to exporters but I was told retail side was taking
profit as well. If you recall, few weeks ago I said these
retailers Mrs Watanabes they were long in the 118s;
makes good sense to take money off the table. 200-day
SMA sits at 120.99, we should see some interests there.
Keep a note, there is a very large UsdJpy strike at
120.00, which expires on Oct 29, notional near $5bn.
Both AudUsd and NzdUsd advance in low volume.
Aussie is still locked within 0.7200-0.7300; bids are
linked to exporters while sellers are global macro.
Spreads of yield between Aussie bonds and UST have
narrowed. Rates pointing AudUsd to 0.7185.
Oil price and UST futures were steady during Asia, Aud
and Nzd firmer, thus UsdCad backed away from 1.3184.
We see better offers than bids selling from real money
account close to 1.32-handle and light bids unless we get
to 1.29-handle. Rates space still pointing lower UsdCad,
1.2685.

Post-PBOC rate cut and smiley faces on Asian equities.

Those who jumped into getting long Usd/Asia were seen
taking money off the table. This should not be a surprise.
Since Fridays Chinese move, economists and editorials
are betting against Fed move in Dec.
In Korean Won, Kospi slight positive we encountered
few prop/macro selling 1s UsdKrw above 1136.0.
UsdSgd ran into resistance ahead of 1.40-handle. Like
rest of Usd/Asia, UsdSgd drifted towards 1.3950s where
we hear reports of momentum funds picking up Usd.
Thai Sept customs trade surplus advanced to $2.79bn
versus Augusts $721mio. This was due to large fall in
imports -26.2% from -4.8%. Not surprising given the
weak Thb.

Who said what

PBOC: Rate liberalization is key reform policy

PBOC: Decision represents basic opening of rate
restriction
PBOC: Rate/RRR cut in response to economy,
price, liquidity changes
PBOC: Rate, RRR decisions different from QE
PBOC: Rate, RRR cuts are regular measures
PBOC: Has room for more rate/RRR cuts if
needed
PBOC: Rate/RRR cuts wont expand balance
sheet
PBOC: Reasonable to cut interest rates when
price level low
Moodys: China monetary policy easing
consistent with Moodys view that additional
stimulus will be provided
Moodys: Additional monetary and fiscal
stimulus will keep growth from slowing rapidly,
rather than raising growth significantly higher
levels
Krugman: US dollar overvalued at current levels

News & Data

Thailand Sept Customs Exports Y/Y fell 5.51%

(f/c -8.1%; prev. -6.7%)
Thailand Sept Customs Imports Y/Y fell 26.2%
(f/c -20.5%; prev. -4.8%)
Thailand Sept Customs Trade Balance up
$2.79bn (f/c $1.1bn; prev. $721mio)

FT: US escalates Deutsche Bank probe into

Russian trades
Deutsche Bank is facing a major escalation of a US probe
into its activities in Russia, as a money laundering

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.

investigation of its Moscow unit widens to examine

possible sanctions violations, said people familiar with
the case. The DoJ and DFS are investigating $6bn-worth
of such trades, people familiar with the case said.
http://www.ft.com/intl/cms/s/0/9f0d10b0-79d2-11e5a95a-27d368e1ddf7.html#axzz3pcxwzlf3
Wolfgang Mnchau in FT: Draghi must be more
unconventional
Mario Draghi last week opened the door for some lateral
thinking on eurozone monetary policy. At the meeting of
the governing council of the European Central Bank, the
banks president hinted they would have to take a deep
look at all the monetary policy instruments available at
their next meeting in December This is both welcome
and unfortunate welcome in terms of what it says
about his determination to get inflation back to target;
unfortunate because it should not have been necessary.
The eurozone is once again in a position where economic
recovery is weakening before it really started, where the
global risks are rising, and where inflation remains way
off target.
http://www.ft.com/intl/cms/s/0/85713ae0-7997-11e5933d-efcdc3c11c89.html#axzz3pcxwzlf3
WSJ: Betting Against a Fed Rate Rise
Over the past week, China posted its softest grossdomestic-product growth since the financial crisis, Japan
reported a sharp decline in export growth and European
forecasters cut their projections for eurozone inflation.
The developments, together with mixed U.S. economic
data in recent months, increase the likelihood the Fed
will keep interest rates near zero for the rest of 2015,
according to analysts and traders. The slowdown and
expansive central-bank policy overseas are likely to keep
U.S. long-term interest rates down while at least initially
fueling purchases of riskier assets such as stocks,
corporate bonds and commodities, they said.
http://www.wsj.com/articles/betting-against-a-fed-raterise-1445790240
FT: Nationalists on track to regain power in
Polish vote
Polands conservative opposition won back power on
Sunday, according to early exit polls, in a strong swing to
the right that would oust one of the EUs longest-running
governments. Despite Poland being the fastest-growing
economy in the EU during its eight-year term, the
country looks to have grown tired of the ruling liberal,
centre-right Civic Platform party (PO), and to have
backed a return to power for the veteran nationalist
Jaroslaw Kaczynskis Law and Justice party (PiS).
http://www.ft.com/intl/cms/s/0/df00492c-7b02-11e598fb-5a6d4728f74e.html#axzz3pcxwzlf3

Roger Bootle in Telegraph: Africa is in grave

danger from the global economic slowdown
Nowhere in the world is more at risk from the
combination of Chinese economic slowdown, low
commodity prices and imminent rises in US interest
rates, than Africa. There is now a serious question over
whether many African economies can achieve rapid
growth in the years ahead or whether they are due to
sink back into mediocre performance, thereby
condemning their people to a continued low standard of
living.
http://www.telegraph.co.uk/finance/comment/1195392
4/Africa-is-in-grave-danger-from-the-global-economicslowdown.html
FT: Oil traders threaten London market exit over
EU position limits
Some of the worlds largest oil traders are threatening to
pull their business from Londons derivative exchanges
because of tough new European rules that would place
limits on their ability to manage price swings. BP, Royal
Dutch Shell, and large independent traders such as
Trafigura, may be unable to hedge their financial
exposures to the contents of more than a handful of oil
tankers under current proposals from the European
Commission. Under the rules, physical oil dealers will be
stripped of so-called real world exemptions to the caps
unless they can prove the majority of their trading is not
for speculative purposes. They could also be asked to
hold as much capital as a bank under a revamped version
of Europes flagship market rule book.
http://www.ft.com/intl/cms/s/0/c2e22dae-795f-11e5933d-efcdc3c11c89.html#axzz3pcxwzlf3
WSJ: Chinas Leaders to Approve Economic
Blueprint
Chinas Communist Party this week is expected to
approve an economic blueprint for scaling back the role
of the state over the next five years, while offering clues
about the leaderships appetite for bold reform in the
face of slowing growth. The four-day meeting of the
Central Committeethe partys top 300 or so leadersis
a test of whether the political power President Xi Jinping
has amassed since coming to power three years ago has
enabled him to overcome resistance to the reform
program he unveiled in 2013.
http://www.wsj.com/articles/chinas-leaders-toapprove-economic-blueprint-1445795782

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.