Ranges (Up Till 11.30am HKT) : Currency Currency

Ranges (Up till 11.
30am HKT)
Currency
Currency
EURUSD
1.0601-14
EURJPY
130.015-13
USDJPY
122.58-73
EURGBP
0.70185-30
GBPUSD
1.5093-1.5105
USDSGD
1.4077-96
USDCHF
AUDUSD
1.0235-40
0.7214-33
USDTHB
USDKRW
35.74-805
1148.5-1152.0
NZDUSD
0.6556-79
USDTWD
32.52-618
USDCAD
1.3297-1.3307
USDCNH
6.4330-6.4445
AUDNZD
1.0978-1.1005
XAU
1067-1073
Key Headlines
Calm before the storm well, we are still

digesting the turkey
Keep an eye on the CNH/CNY spread our

strategist Patrick said he thinks this is too rich to
be paying USDCNH here. Also beware of
authority
OPEC meeting in Vienna starts Dec 4
FX Flows
Time flies and we are now going into final month of
2015. Plenty of event risk next week. The main one is
Dec 3 ECB. Market expects ECB to move negative deport
rats by 10bp to -0.30%.
The other event to keep watch is the OPEC meeting in
Vienna from Dec 4. Although we do not expect a change,
last Mondays report in Saudi Press Agency should have
some on their toes. SPA said, The Cabinet stressed the
Kingdom's role in the stability of the oil market, its
constant readiness and continuing pursuit to cooperate
with all oil producing and exporting countries.
Oil prices stay weak, but UsdCad could not go higher. We
suspect that macro names, strategic accounts have been
offloading long UsdCad positions, disconnecting the
currency versus oil price and yield spreads. Offers are
light bids are okay, gets a lot better low 1.32s.
Little in Euro caught between sentiment and profit
taking. There are decent-sized options expiring on Dec 2.
1.0600 strike has Eur3bn and 1.0500 strike has Eur4bn
notional. Offers are mentioned above 1.0625 and stops
atop 1.0640. Buy orders at 1.0600 and below 1.0580.
Market is still heavily short GbpUsd. Global Positioning

Index stands at maximum and looking at the interest
past week, this pair will have difficulty going down. AAA
names have scattered their bids from 1.5070 down. And
if you recall, I said before there is a masked man at
1.5000.
There is something very odd going on in Nzd. Global
positioning index is long NzdUsd; well chart looking
positive for Kiwi and this weigh on AudNzd. However, if
you look at rates probability, strong chance of RBNZ cut
on Dec 10 furthermore 2-year yield spreads pointing
NzdUsd to 0.6295.
Asians
USDCNY fixed at 6.3915 versus estimates of 6.3895.
Onshore spot opened at 6.3940 while offshore USDCNH
popped to 6.4440 high; thus making the
onshore/offshore spread at close to +490. Keep a
watchful eye on this spread; recent high was +550 while,
according to our trader Gary, it was +1135 post-Aug
devaluation. Our strategist Patrick said he thinks this is
too rich to be paying USDCNH here; although he is
bullish this pair, targeting 6.50-6.55. Pat noted that it
could be that market is still short, hoping for some PBOC
intervention but are being squeezed at this point. Pat
feels more comfortable buying at 200-250 levels.
The CNY fix did caused rest of Usd/Asia firmer. UsdSgd
squeezed up to 1.4096, the 50-day SMA is at 1.4095. We
might see some stop buy orders trigger above 1.4110.
UsdKrw was already bid from open and this is due to the
widening of the 1-month NDF points. The points have
been trading +100-120 past week rose to +135 this
morning. We think that the spread is caused by exporters
capping onshore versus speculators buying offshore 1month NDF.
Who said what
It was because of the Tokyo fix that had the UsdJpy

rising to 122.73. After that we drifted back. Usual
suspects sold this morning and offers lined up to 123.05.
Downside bids 122.40-50. BOJs participation in ETF
should keep UsdJpy firm.
South Korea Choi: Weak exports weighing on

investment and production
South Korea Choi: Urges parliament to approve
FTA with China
Japan Aso: PM Abe ordered an extra budget
compiled
Japan Aso: Wont cut corporate income tax
without other revenue
Japan Aso: Extra budget to focus on TPP,
disaster relief
News & Data
Japan Oct Jobless Rate improved to 3.1% from

3.4%
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.
Japan Oct Job-To-Applicant Ratio unchanged at

1.24%
Japan Oct Overall Household Spending falls
2.4% from -0.4%
Japan Oct National CPI Y/Y rose 0.3% from flat
Japan Oct National CPI Ex-Fresh Food Y/Y
unchanged at -0.1%
Japan Oct National CPI Ex-Fresh Food, Energy
Y/Y rose 0.7% from +0.9%
Japan Nov Tokyo CPI Y/Y +0.2% from +0.1%
Japan Nov Tokyo CPI Ex-Fresh Food Y/Y flat
from -0.2%
Japan Nov Tokyo CPI Ex-Fresh Food, Energy
Y/Y +0.6% from +0.4%
UK Nov GfK Consumer Confidence at 1 from 2
China Oct Industrial Profits Y/Y down 4.6%
from -0.1%
Nikkei: Tepid consumption weighs on recovery

Southeast Asian countries are struggling to put their
economies back on a path of robust recovery as personal
consumption loses steam and China's economic
slowdown depresses exports. Gross domestic product in
the region's five major economies -- Indonesia, Malaysia,
the Philippines, Singapore and Thailand -- grew 4.2%
year on year in the July-September quarter, unchanged
from the prior quarter, according to the weighted
average of GDP growth calculated by the Asian
Development Bank. The five had released relevant data
by Thursday.
http://asia.nikkei.com/PoliticsEconomy/Economy/Tepid-consumption-weighs-onrecovery
WSJ: The Wrong Euro Reforms Will Deepen the
Next Crisis
Its several months since the last acute eurozone crisis,
and recent developments in Athens and Lisbon show
that the currency is never too far away from the danger
zone. German policy makers in particular are developing
proposals intended to stabilize the bloc over the longer
term. The risk, however, is that measures introduced
now to foster stability could trigger a new and different
crisis in the future.
http://www.wsj.com/articles/the-wrong-euro-reformswill-deepen-the-next-crisis-1448572033?
mod=wsj_nview_latest
WSJ: The Fed Is Stressed Out
Almost nobody in Washington cares, and most of the
financial media havent noticed. But the inspector
generals office at the Federal Reserve recently reported
the disturbing results of an internal investigation. Last
December the central bank internally identified
fundamental weaknesses in key areas related to the
Feds own governance of the stress testing it conducts of

financial firms. According to the inspector general, The
governance review findings include, among other items,
a shortcoming in policies and procedures, insufficient
model testing and incomplete structures and
information flows to ensure proper oversight of model
risk management. These Fed models are essentially a
black box to the public, so theres no way to tell from the
outside how large a problem this is.
http://www.wsj.com/articles/the-fed-is-stressed-out1448574493?mod=wsj_nview_latest
Ambrose
Evans-Pritchard
in
Telegraph:
Portugal's anti-austerity Left take power in
watershed moment for the euro
Portugals anti-austerity Left has taken power with the
support of Communists and radical forces after eight
weeks of bitter wrangling, breaking Germanys grip on
economic policy and setting the scene for a bruising fight
with Brussels on budget plans. The issues of euro
membership, debt restructuring and Nato have been
finessed but have not gone away. While the Socialists
vow to abide by eurozone budget rules, their policies are
incompatible with the Fiscal Compact and go against the
grain of market reforms. They will reverse wage cuts and
a pension freeze for state workers. The minimum wage
will be lifted to 600 a month, plus two months bonus.
Electricity will be subsidized for poor families. VAT be
will cut for restaurants.
http://www.telegraph.co.uk/finance/economics/120198
19/Portugals-anti-austerity-Left-take-power-inwatershed-moment-for-the-euro.html
Telegraph: VW 'finds another software problem
affecting fuel consumption'
Volkswagen has uncovered yet another software problem
affecting its vehicles' fuel consumption, according to
reports, adding to a massive pollution cheating scandal
that has engulfed the car giant. "Volkswagen has new
software problems, including one that has a direct
impact on the consumption" of the vehicles, reported Die
Welt. The latest software issue on VW cars focuses on the
recovery of energy, which can be used to recharge car
batteries - an essential component that keeps the
vehicle's lights and air-conditioning or heating running.
A problematic energy recovery system means that the car
would have to use more fuel.
http://www.telegraph.co.uk/finance/newsbysector/indu
stry/12019138/VW-finds-another-software-problemaffecting-fuel-comsumption.html
SCMP: Malicious short selling used as a weapon
to attack metal short sellers
Malicious short selling, the term invented by the
Chinese securities regulator in July as it tried to stem a
market rout, has become the latest catalyst stirring the
mainland metal market. Investors rushed to close their

short positions in nonferrous metals on Thursday, which
pushed the price of nickel up by more than 8 per cent in
Shanghai during the afternoon. But industry insiders
said some metal traders were making use of the term
malicious short selling to attack short sellers, and the
surge in prices would soon lose momentum.
http://www.scmp.com/business/commodities/article/1
883891/malicious-short-selling-used-weapon-attackmetal-short-sellers
Nikkei: Abe pushes for rate under 30% in fiscal
2016
Japan's effective corporate tax rate should be cut to
below 30% next fiscal year, the prime minister's office
said Thursday, signaling an intent to realize the
reduction a year earlier than its initial target. The
Finance Ministry had envisioned a cut to below 31%
from the current 32.11% for next fiscal year, and a rate
under 30% for fiscal 2017. But the prime minister's office
has now instructed both the finance and economy
ministries to revisit the proposal.
http://asia.nikkei.com/Politics-Economy/PolicyPolitics/Abe-pushes-for-rate-under-30-in-fiscal-2016

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Ranges (Up till 11.

Calm before the storm well, we are still

Keep an eye on the CNH/CNY spread our

OPEC meeting in Vienna starts Dec 4

Market is still heavily short GbpUsd. Global Positioning

Who said what

It was because of the Tokyo fix that had the UsdJpy

South Korea Choi: Weak exports weighing on

News & Data

Japan Oct Jobless Rate improved to 3.1% from

Japan Oct Job-To-Applicant Ratio unchanged at

Nikkei: Tepid consumption weighs on recovery

Feds own governance of the stress testing it conducts of

mainland metal market. Investors rushed to close their

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