Ranges (Up Till 11.40am HKT) : Currency Currency

Ranges (Up till 11.
40am HKT)
Currency
Currency
EURUSD
1.1344-68
EURJPY
135.98-136.30
USDJPY
119.76-96
EURGBP
0.7347-58
GBPUSD
1.5437-48
USDSGD
1.3888-1.3914
USDCHF
AUDUSD
0.9552-62
0.7257-75
USDTHB
USDKRW
35.34-42
1127.8-1131.5
NZDUSD
0.6739-60
USDTWD
32.345-515
USDCAD
1.2969-88
USDCNH
6.3565-6.3682
AUDNZD
1.0751-81
XAU
1176.3-1178.9
Key Headlines
Hong Kong market is closed today. Pretty calm

throughout Asia.
Keep an eye on downside in Nzd
The Chinese media Sina News reported that

Chen Yulu will be appointed as deputy Governor
of PBOC soon. Is this important? I think so.
FX Flows
Experts were expecting to Japanese trade balance to run
a surplus in Sept but it didnt. Deficit fell to Jpy114.5bn
versus forecast of plus Jpy87bn. Exports grew 0.6% and
imports fell 11.1%.
Nikkei225 marginally positive after open and there was
demand for the Tokyo fix pushing UsdJpy to 119.96.
Broker-dealer type account sold near high of the day
while we saw one Japanese name buying. General talk of
bids surrounding 119.50 while offers are scattered up to
120.20. Nothing worth mentioning in option expiries but
do note there are 2 coming up tomorrow NY cut
120.00 and 121.00 about $1bn+ each.
Surprisingly, we saw good demand in EurJpy this
morning. No apparent cause just pure Japanese I
guess. Took the pair from NY close of 135.99 to 136.30.
EurUsd traded off low 1.1344; heard bids gather below
1.1340. EurJpy cross brought EurUsd up to 1.1368.
Focus will be on ECB on Thurs. WSJ published that
President Mario Draghi is expected to discuss the
possibility of an eventual expansion to the bondpurchase program. Our trader Jon thinks ECB might
disappoint, could choose to wait for Fed instead.
Speculators are short EurUsd and EurGbp and pain is on
the upside. His target 1.1450.
We noticed some good two-way business in AudUsd
0.7260s this morning. Probably linked to AudJpy and
AudNzd. Think this AudUsd is caught in the 0.72-0.73
range for now. Bids are at 0.7200 and offers 0.7310. In
rates space, yield spreads pointing AudUsd towards

0.7125. However, changes in Aussie-Kiwi rates show
different story, pointing the AudNzd cross higher at 1.10.
Then if you look at Kiwi rates vs UST, yields are pointing
Nzd to 0.6585. Keep an eye on Nzd, danger lurks under
0.6730.
Very little I can pen on UsdCad. We saw a nice pullback
in UsdCad to 1.2936 following the Canadian elections.
Currently at 1.2978, we see buy orders lined up below
1.2940 from corporate names. Sellers are found above
1.3000-25 and little thereafter. While rates space
pointing UsdCad to 1.2450, weak oil price is giving some
support.
CIBC Research has compiled a piece on Canadas
changing guard and its economic implications. Here is
the link
http://research.cibcwm.com/economic_public/downloa
d/2015_federal_election.pdf
On FX side, our team wrote - A decision to add a modest
dose of fiscal stimulus reduces the need for an additional
rate cut from the Bank of Canada, and could therefore
push up short rates slightly given that they price in some
odds of such a cut. That could in turn be a bit supportive
for the Canadian dollar, although there has been little
initial reaction in the currency. The key to any spread or
ratings implications would be the credibility of a plan to
subsequently reduce deficits in the future. As targeted,
the federal deficits would still be very modest by global
standards.
Asians
With Hong Kong on holiday, stable PBOC fix, Usd/Asia
has been calm.
Only thing was USDCNH moving lower. Fixed at 6.3473,
versus predictions of 6.3525. Market suspects that
onshore interest in moving USDCNY lower at the close
and capped the spot this morning.
Interesting pattern in the 1-month UsdMyr NDF chart.
50-day SMA comes in at 4.2500 and technical support at
4.2385. If they dont get the budget passed this Friday,
we could return to 4.3985.
Malaysias House of Representatives Dewan Rakyat
Speaker Amin Mulia has ruled out the no-confidence
against PM Najib during this parliamentary session.
Mulia said motions filed under Standing Orders 26 and
27 need to be submitted 14 days before the start of a
parliament sitting. However, one veteran UMNO
lawmaker Shahrir Samad advised the opposition from
submitting such motion but instead to use budget vote to
oust the PM.
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 Chinese media Sina News reported that Chen Yulu

will be appointed as deputy Governor of PBOC soon.
There are 4 deputy governors in PBOC. The deputy
retiring in 2016 is Zhu Min and Chinese press is saying
Chen Yulu will be appointed PBOC deputy governor
soon. Chen is currently the president of Renmin
University.
Is his appointment important? I did little digging and
this is what I found out. Chen is one of the 15 members
of the MPC. This appointment is a formality ahead of
him also becoming a vice president of the International
Monetary Fund where he will replace Zhu Min whose
term ends next year.
I also think this is done amid process of RMB admission
to SDR. Economic Daily on the July 20, 2014 interview
with Chen Yulu regarding RMB internationalization, he
told Asian audience that the RMB internationalization
index will exceed that of all currencies except the US
dollar and the Euro within anywhere from 3 to 5 years.
Is he a Li Keqiang man? I believe so.
Who said what
Sina News: Chen Yulu will be appointed PBOC

Deputy Governor soon
PM Najib: GST has increased Malaysias rax
based significantly
PM Najib: Trading nations like Malaysia face
tough conditions
PM Najib: Malaysia must re-strategize to keep
ambitions intact
PM Najib: Malaysia aims for balanced budget or
close t0 it by 2020
PM Najib: 1MDB can resolve cash flow issues if
revamp continues
PM Najib: Action will be taken if 1MDB probe
finds wrong doings
PM Najib: Short term rates remain stable on
BNM intervention
News & Data
Australia Sept Westpac Leading Index M/M rose

0.1% from +0.3%
Japan Sept Trade Balance improved to
Jpy114.5bn from Jpy569.7bn
Japan Sept Adjusted Trade Balance at -355.7bn
from Jpy358.8bn
Japan Sept Exports Y/Y up 0.6% from +3.1%
Japan Sept Imports Y/Y down 11.1% from -3.1%
FT: SEC signals tighter rules governing Treasury

bond market
US regulators and policymakers want to improve

transparency and tighten rules governing the $13tn
Treasury bond market, particularly ramping up
supervision of high-frequency trading firms, amid rising
concern over the stability of US government debt. Mary
Jo White, chair of the Securities and Exchange
Commission said it is essential that our collective
regulation of this critical market keeps pace with
dramatic changes in the Treasury market, adding
specifically that HFT firms should be properly registered
and regulated.
http://www.ft.com/intl/cms/s/0/e0b81fc4-7760-11e5933d-efcdc3c11c89.html#axzz3owVs6Xd6
WSJ: China Probes Graft in Angola Oil Deals
Anticorruption investigators are zeroing in on oil deals in
Angola by one of Chinas biggest energy companies, part
of President Xi Jinpings nearly three-year probe into
graft in the industry. Investigators are probing whether a
former Sinopec Group chairman led the company to
overpay for rights to tap offshore oil fields in Angola
during his 2007-2011 reign at the company, and whether
this suggests possible bribes or kickbacks, according to
people familiar with the matter.
http://www.wsj.com/articles/china-probes-graft-inangola-oil-deals-1445339130?mod=wsj_nview_latest
WSJ: ECBs Draghi Expected to Talk Up
Expansion of Stimulus
ECB President Mario Draghi is expected to discuss the
possibility of an eventual expansion to the bondpurchase program when the central banks governing
council meets in Malta on Thursday. But economists say
they expect him to wait until December, or possibly early
2016, before announcing any possible changes. However
the ECBs December meeting is about two weeks before
the U.S. Federal Reserves final policy gathering of 2015.
Many economists forecast the Fed will raise rates at that
meeting, and ECB policy makers may want to wait for its
outcome.
http://www.wsj.com/articles/ecbs-draghi-expected-totalk-up-expansion-of-stimulus-1445343984?
mod=wsj_nview_latest
Reuters: Bridgewater's $70 bln 'All Weather
Fund' down 6 pct in 2015
$70 billion Bridgewater All Weather Fund, managed by
hedge fund titan Ray Dalio, was down 1.9 percent in
September and is down 6 percent through the first nine
months of the year, three people familiar with the fund's
performance said on Tuesday. The All Weather Fund is
one of two big portfolios managed by Bridgewater
Associates and uses a so-called "risk parity" strategy that
is supposed to make money for investors if bonds or
stocks sell off, though not simultaneously.
http://www.reuters.com/article/2015/10/20/hedgefund
s-bridgewater-idUSL1N12K23N20151020
Telegraph: China to invest 30bn in UK plc: how
the deals break down
China will bring 30bn in deals and investment to the
UK this week, Prime Minister David Cameron has
claimed. The money will be secured as Britain welcomes
Chinese President Xi Jinping for a state visit, the first
from China in a decade. The cash generated by new deals
will help to create 3,900 jobs across the UK, according to
10 Downing Street. This is going to be a very important
moment for British-Chinese relations. Trade and
investment between our two nations is growing and our
people-to-people links are strong, Mr Cameron said.
http://www.telegraph.co.uk/finance/chinabusiness/11943880/China-to-invest-30bn-in-UK-plchow-the-deals-break-down.html
Control Act (ECA) 1953 is doing little for investor

confidence and throwing the spotlight on enforcement.
"This (impasse) leaves us in a limbo. Unless 1MDB is
resolved soon the volatility will continue and the
uncertainty will also threaten the integrity of the
financial system," said the dean of Malaysia University of
Science & Technology's School of Business Yeah Kim
Leng
http://www.businesstimes.com.sg/governmenteconomy/agc-bank-negara-clash-over-1mdb-cloudsmsia
SCMP - Moving on from the joint venture era:

foreign fund managers can sling it alone in
China with private fund licence
British fund manager Aberdeen Asset Management is
due to be granted a private fund manager licence in
China, signifying foreign fund managers will no longer
need to go into joint ventures and can operate at 100 per
cent shareholding in their investment businesses. The
fund manager will receive a private fund licence for its
wholly-owned foreign enterprise (WFOE) setup in
Shanghai.
http://www.scmp.com/business/chinabusiness/article/1869985/moving-jv-era-foreign-fundmanagers-can-sling-it-alone-china
SMH: Australian dollar could hit US80 amid
global low rates fixation, UBS says
David Sokulsky, UBS Wealth Management head of
investment strategy, warns investors risk missing a
possible sharp rebound in the currency, which could lead
to a rally towards US80 as global interest rates remain
stuck at record low levels. It was quite possible that the
US Federal Reserve would keep interest rates on hold
indefinitely amid global volatility, while the European
Central Bank and Bank of Japan launched fresh
quantitative easing measures and the Bank of England
eased monetary policy to fight deflation, Dr Sokulsky
said.
http://www.smh.com.au/business/markets/currencies/
australian-dollar-could-hit-us80-if-fed-chooses-qe-overhike-20151019-gkdaix.html
Business Times: AGC-Bank Negara clash over
1MDB clouds M'sia
Analysts say the divergence of opinion between the
central bank and attorney-general's chambers (AGC) on
whether state-owned 1MDB violated the Exchange

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Ranges (Up till 11.

Hong Kong market is closed today. Pretty calm

Keep an eye on downside in Nzd

The Chinese media Sina News reported that

rates space, yield spreads pointing AudUsd towards

The Chinese media Sina News reported that Chen Yulu

Who said what

Sina News: Chen Yulu will be appointed PBOC

News & Data

Australia Sept Westpac Leading Index M/M rose

FT: SEC signals tighter rules governing Treasury

US regulators and policymakers want to improve

Control Act (ECA) 1953 is doing little for investor

SCMP - Moving on from the joint venture era:

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