Ranges (Up till 11.

40am HKT)
Currency

Currency

EURUSD

1.11805-1.12045

EURJPY

134.06-42

USDJPY

119.78-120.06

EURGBP

0.73845-97

GBPUSD

1.5130-47

USDSGD

1.4301-66

USDCHF
AUDUSD

0.9765-74
0.7012-56

USDTHB
USDKRW

36.48-64
1175.3-1184.2

NZDUSD

0.6385-0.6420

USDTWD

32.80-33.10

USDCAD

1.3230-70

USDCNH

6.3655-6.3781

AUDNZD

1.0968-1.1000

XAU

1111.6-1113.5

Key Headlines

Clock changes this weekend in Australia, official

opening for FX market moves an hour ahead on
Monday at 2.00am HK or 2.00pm EST.

Asian currencies weakened against the Usd. A

good point from our EM trader Gary, he said
UsdKrw and UsdInr traded higher on shortcovering and this being the low for the week.
UsdTwd higher because of CNH; UsdSgd on
MAS.

CIBC Research said payrolls growth may have

eased in August, but the pace was still solid and
more than enough to see the unemployment rate
fall further. Our forecast is up 206k versus
previous 173k.

Have a look at the hourly charts of AudCad, also

Pawans note on the rate differentials.

FX Flows
It is NFP time again. CIBC Research said payrolls growth
may have eased in August, but the pace was still solid
and more than enough to see the unemployment rate fall
further. Our forecast is up 206k versus previous 173k.
On todays release of Japanese data, our Strategist
Patrick Bennett said the standout is Jobs-to-Applicants
at 1.23, this is the highest since 1992, another is the
household spending rising 2.9% annually from -0.3%.
Japanese data rarely a market mover; BOJ Tankan
published yesterday was okay, capex numbers were
encouraging. Check all this against a still weak inflation
and it is a tough call for further BOJ action.
In G-10 space, Asian has a lacklustre session. Preempting a weak Nikkei open, fast money accounts said to
be responsible for 119.78 print. Demand for AudJpy
helped reverse UsdJpy back up. Nikkei started to pare
losses and this gave UsdJpy a further boost to 120.00. I
am told there are bids in the 119.70s and stops from
intraday guys developing above 120.20.

We enjoyed a brief moment of fun in AudUsd during the

release of Australian August retail sales. Improved to
+0.4% from -0.1%, but this was in line with expectations.
AudUsd jumped 10 points or so; then settled back to
square one. Then in the late morning, AudUsd turned
lower for no reason. Went from 0.7037 to 0.7012. We
think the move was linked to weak Asian currencies.
One real money PM pointed out the AudCad hourly chart
and that it has broken the support line. Technically we
agree but another reason to back this is the rates. Our
rates trader Pawan said the rate differentials have been
narrowing on the divergent monetary policy paths. This
has been exerting downward pressure on AudCad and
today is seeing some correction of the rate spread, but
the medium term trend is still lower.

Interesting price action in the Oil futures as market

moved towards the end of NY close. Price took a quick
dip, losing 35 cents and bounced right. Very few could
offer an explanation some said it was due to successful
second oil auction as Mexico is seeking to increase its oil
production; MarketWatch said Hurricane Joaquin could
end up sinking oil prices; finally others said US Senate
Banking Committee endorsed a bill to lift the fourdecade-old ban on crude oil exports, which caused the
jump.
UsdCad was edging higher into the Toronto close;
printed 1.3270 at the turn of the hour then slipped back
to 1.3240s. We encountered Usd selling to trigger some
weak stops below 1.3240. Honestly, liquidity was bad.
Nothing interesting to talk about on buy orders, offers
are atop 1.3300. If oil prices stabilise, Canadian dollar
could track the yields and lead UsdCad lower.
I struggled to pen something on this Euro. One strategic
name is trying to short this above 1.1215; heard better
sellers up 1.1280-90s. Interesting bids are starting to
build up below 1.1130.

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.

Asians
Singapore PMI released last night was again dismal. Sept
number came out at 48.6 versus previous 49.3.
Singapore Institute of Purchasing & Materials
Management said the PMI fell on the back of further
contraction in new orders, new export orders and
production output. Attention now on the MAS SemiAnnual Monetary Policy Review and our strategist
Patrick Bennett expects MAS to cut rates thus ease the
midpoint of the SGD NEER downwards.
US dollar was better bid across the Asian EM space. I
heard Macro and interbank names have bought UsdSgd
this morning from the 1.43-teens. We took out the 1.4335
high and system funds jumped in. Close above 1.4335
will open up to 1.45-1.46.
A trade idea going into NFP from Gary is short UsdSgd.
In his opinion, short with stop above 1.4450, suspects
agents will surface and natural sellers at 1.4450 as well.
Liucheng County in Guangxi, China, has been hit by
another powerful blast damaging a 6-story building
yesterday less than a day after more than a dozen
blasts triggered by explosive devices delivered in mail
packages. Chinese authorities have identified a 33-year
old man but they did not offer motive of attack.
A story in WSJ on the Bangkok bombing on Aug 17, that
the Thai police said that the perpetrators may have
sought retaliation for Thailands forced repatriation to
China of more than 100 Uighurs in July. If the Thai
allegation proves to be true, the blast would mark a rare
spillover of violence related to Uighurs outside China.
This attack would add a new dimension to the serious
issue of terrorism in China.

Who said what

UST Sec Lew: Urges Congress to end the

avoidable default threat
UST Sec Lew: Tax receipts lower than previously
projected
UST Sec Lew: Debt limit deadline on or about
Nov 5
ECB Draghi: Does not comment on monetary
policy in NY
Japan Aso: Will discuss downside risks to global
economy at G-20
Japan Aso: Isnt a bad thing for Yuan to become
a global currency

News & Data

South Korea Aug BOP Current Account

narrowed to $8.45bn from $10.11bn (revised
$9.3bn)
South Korea Aug BOP Good Balance at
$8.974bn from $10.859bn
South Korea Sept CPI M/M fell 0.2% from
+0.2%
South Korea Sept CPI Y/Y at 0.6% from 0.7%
South Korea Sept Core CPI Y/Y unchanged at
2.1%
Japan Aug Jobless Rate at 3.4% from 3.3%
Japan Aug Job-To-Applicant Ratio at 1.23 vs 1.21
Japan Aug Overall Household Spending rose
2.9% from -0.2%
New Zealand Sept ANZ Commodity Price up
5.5% from -5.2%
Australia Aug Retail Sales rose 0.4% as expected
vs -0.1% previously

Gillian Tett in FT: The credit bubble, the bears

and the central bankers
Next week, when the IMF and World Bank meet in Lima,
officials will certainly wail about the feeble pace of
developed world growth. What is really unnerving
policymakers, however, is not the west but the state of
emerging markets. Growth is slowing everywhere from
China to Peru. In addition, it is becoming clear that
emerging markets have become caught up in a new
credit bubble.
http://www.ft.com/intl/cms/s/0/512ac12a-683f-11e597d0-1456a776a4f5.html#axzz3mzFZMWwl
WSJ:
Chinas
Desperate
Battle
Against
Separatist Terrorism
Thailands police have linked the August 17 bomb attack
on the Erawan Shrine, a popular tourist attraction in
Bangkok, to Uighurs, a largely Muslim ethnic group
some of whom have been fleeing Chinese rule. If the Thai
allegation proves to be true, the blast would mark a rare
spillover of violence related to Uighurs outside China.
This attack would add a new dimension to the serious
issue of terrorism in China, with significant security
implications not only for China but also for Turkey,
Thailand and other transit countries in connection with
the movement of Uighurs.
http://blogs.wsj.com/chinarealtime/2015/10/02/chinas
-desperate-battle-against-separatist-terrorism/?
mod=wsj_nview_latest
WSJ: Treasurys Lew Says Congress Must Raise
Debt Limit by Nov. 5
The government will run out of money to pay its bills
sooner than previously thought, the Treasury
Department said Thursday, accelerating the fiscal
deadlines that confront Congress amid a leadership

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.

scramble on Capitol Hill. Treasury Secretary Jacob Lew

said the government would be left with just $30 billion
in cash on or around Nov. 5 and called on Congress to
immediately raise the federal borrowing limit to avoid
market disruptions and threats to the nations credit
rating.
http://www.wsj.com/articles/treasurys-lew-sayscongress-must-raise-debt-limit-by-nov-5-1443733802?
mod=wsj_nview_latest
Washington Post: These six graphs explain
whats affecting the upcoming Portuguese
elections
The next parliamentary elections in Portugal will take
place on Sunday, Oct. 4, four years and three months
after the previous triumph of the center-right Social
Democratic Party (PSD), which was followed by the
formation of a majority coalition with the Social
Democratic Center (CDS). The latest polls at the time of
this writing, aggregated here (using a Kalman filter pollaggregating technique), show the two government
parties, now running in a pre-electoral coalition, leading
with 38 percent. The main center-left party in the
opposition, the Socialist Party (PS), is at the moment
quite close (36 percent), in a statistical tie.
http://www.washingtonpost.com/blogs/monkeycage/wp/2015/10/01/these-six-graphs-explain-whatsaffecting-the-upcoming-portuguese-elections/
WSJ: National Bank of Canada Warns of
Substantial Investment Loss
National Bank of Canada warned Thursday that its
investment in Maple Financial Group Inc. was at risk of
substantial loss, while also disclosing impending
restructuring charges and a new share offering.
Montreal-based National Bank, Canadas sixth-largest
lender by assets, said it holds a 24.9% stake in Maple
Financial Group Inc., a privately held financial-services
company based in Toronto.
http://www.wsj.com/articles/national-bank-of-canadawarns-of-substantial-investment-loss-1443737614?
mod=wsj_nview_latest
AFR: China's Australian bond ownership is
bigger than we thought
Data from IMF revealed that Chinese government may
account for up to one fifth of investment in the
Australian bond market, and a third of all foreign
buying. But now reserve managers and China in
particular are selling, not buying, placing downward
pressure on the currency. Last month, China revealed
the largest single-month decline of foreign exchange
reserves on record, at about $US93.9 billion, reducing its
balance to $US3.6 trillion. "We don't know what the
Chinese are selling because we don't know the
composition of their reserve holdings. But it probably

involves some US treasuries and other sovereign bonds,"

Reserve Bank assistant governor Guy Debelle said in a
speech last month.
http://www.afr.com/markets/currencies/chinasaustralian-bond-ownership-is-bigger-than-we-thought20151001-gjz2xy
Business Times - Singapore economy in need of
review: PM Lee
Singapores economy is in need of a review and the
country must create opportunities even as global growth
flags, Prime Minister Lee Hsien Loong said on Thursday,
adding that it must also move more quickly towards
higher skills, innovation and productivity. "These are
urgent tasks, because both global economic conditions
and domestic demographic trends will pose us severe
challenges," he said at the new Cabinet's swearing-in
ceremony on Thursday evening at the Istana.
http://www.businesstimes.com.sg/governmenteconomy/singapore-economy-in-need-of-review-pm-lee
FT: Scandal-hit Malaysia investment fund files
accounts late
The Malaysian state investment fund at the centre of an
international corruption scandal has failed to file its
accounts on time. 1 Malaysia Development Berhad
blamed the delay on a lack of access to documents held
by investigators. The fund said it was given permission
by the companies regulator to miss the September 30
deadline, adding that two of its subsidiaries also wanted
to submit their accounts late.
http://www.ft.com/intl/cms/s/0/51f8ce30-6830-11e5a155-02b6f8af6a62.html#axzz3mzFZMWwl
Telegraph: IMF's botched involvement in Greece
attacked by watchdog
The International Monetary Fund has come under fire
for failing in its duty of care towards Greece by pushing
self-defeating austerity measures on the battered
economy. The Washington-based fund was told it should
have eased up on the spending cuts and tax hikes,
pushed for an earlier debt restructuring and paid more
"attention" to the political costs of its punishing policies
during its five-year involvement in Greece.
http://www.telegraph.co.uk/finance/economics/119041
45/IMFs-botched-involvement-in-Greece-attacked-bywatchdog.html
FT: Greece should not expect big debt
writedown, says Klaus Regling
Klaus Regling, managing director of the European
Stability Mechanism, has played down expectations that
Greece will be granted large-scale debt relief, saying it is
not necessary to revive the countrys economy and is
unlikely to be accepted by European creditors. Regling
said in an interview. The Greek government realises

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.

there will be no nominal [debt] haircut and for good

reasons. The Greek government should sell what has
happened already and what might have been very
positively to their electorate, to the Greek population,
because the benefits are there in any case.
http://www.ft.com/intl/cms/s/0/8c9df2ee-6813-11e5a57f-21b88f7d973f.html#axzz3mzFZMWwl

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.