Ranges (Up Till 11.35am HKT) : Currency Currency

Ranges (Up till 11.
35am HKT)
Currency
lower. Offers in GbpUsd are found above 1.5720 from

various names and Asian bids below 1.5600.
Currency
EURUSD
1.1022-53
EURJPY
137.13-39
USDJPY
124.255-43
EURGBP
0.7038-52
GBPUSD
1.5657-78
USDSGD
1.4012-51
USDCHF
AUDUSD
0.9766-77
0.7314-45
USDTHB
USDKRW
35.54-625
1183.2-1188.2
NZDUSD
0.6575-0.6600
USDTWD
32.436-670
USDCAD
1.3042-62
USDCNH
6.4355-6.4420
AUDNZD
1.1121-56
XAU
1116.6-1118.3
Key Headlines
Focus is back on China following yesterdays stock
index declined 6.13%. USDCNY central parity was fixed
at 6.3966, rather neutral. Shanghai Composite Index
dropped 2.78%, recovered little, then sold off in late
morning , down more than 5%. Talk that plunge
protection team has resurfaced, Shanghai paring losses.
Weak Chinese stock market puts pressure on Asian
currencies especially the vulnerable victims.
Shanghai Composite extended losses and took Aud to
0.7314.
German parliament will vote today on Greek third
bailout. A yes vote is not in doubt but German
Chancellor Angela Merkel faces the prospect of a large
chunk of her conservatives voting against the deal. If
Germany votes yes, 13bn should be in Athens on
Thursday to pay pressing bills and further 10bn will be
set aside at the European stability mechanism,
earmarked to bolster capital in Greek banks. Also today,
the Dutch government gathers at an emergency meeting
in Hague to discuss the rescue package. According to FT,
Dutch MPs do not have a direct say on the bailout,
todays session is likely to trigger a political storm for
Dutch government.
FX Flows
Focus is back on China again following yesterdays stock
index declined 6.13%. Shanghai composite index opened
lower at -2.7%; pressured AudUsd to 0.7326. Reports are
similar, Aussie bids from local corporate names all the
way to 0.7300. Into late morning, Shanghai Composite
extended losses and took Aud to 0.7314.
This morning MNI ran story that outgoing Bank of
England MPC member David Miles, whose always been a
hawk, that time for the first rate hike is approaching, but
also said it is not yet time for tightening. He said he
expects rate hikes to be limited and gradual. Miles will
leave the committee at end of Aug. Gbp rather
unchanged on those remarks but EurGbp was 5 pips
I struggled to pen something on Euro to make it

seemed exciting. EurGbp moved lower on that Miles
comment on UK rate hike. At the same time, EurUsd got
to 1.1022. Since then, EurUsd climbed higher no one
knows why. I hear some orders above 1.1055 and better
offers start from 1.1125. Downside, bids linked to gamma
play 1.0950-75 (there is a 1.0950 strike worth Eur1.5bn
expiring tomorrow NY cut). Good buying further down
below 1.0850.
UsdCad bids are starting to build below 1.3040 and
grows towards figure. Oil price having a big impact
overnight our Cad strategist Bipan said there is topside
exhaustion but we still continue to wait for better levels
to get long. Our trader Sam sticks to his long UsdCad
view short term stop at 1.2990 and longer term under
1.2940. Rates perspective, yield of 2-year UST vs 2-year
CAD bonds indicating spot should be in the 1.3130s.
Asians
Focus is back on China following yesterdays stock index
declined 6.13%. USDCNY central parity was fixed at
6.3966, rather neutral. Shanghai Composite Index
dropped 2.78%, recovered little, then sold off in late
morning, down more than 5%. Talk that plunge
protection team has resurfaced, Shanghai paring losses.
Weak Chinese stock market puts pressure on Asian
currencies especially the vulnerable victims.
USDCNH started the day at 6.4420 and retreated into
6.43-handle. We sold a round of US dollars for Chinese
name and ran into bids at 6.4370. Weak stock market
and USDCNH revisited 6.44-handle. Chinese banks
returned to sell USDCNH and took out the 6.4370 bid.
Speculative names have been attempting to push
UsdThb higher but met resistance above 35.60. Global
Positioning Index for hedge funds showed that they are
still short Thb position and size has not increased from
last Friday.
Who said what

BOE Miles: Turning point on rates pretty soon, not
there yet
BOE Miles: A rate increase is sign of strength for
economy
BOE Miles: New normal UK rate will be less than
historical
BOE Miles: Inflation extremely low, will move up
BOE Miles: Likely path of rate increases will be gradual
Bank of Thailand: Sees growth risk from China
slowdown
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.
Bank of Thailand: Inflation has likely bottomed out

Bank of Thailand: Inflation to pick up in H2
Bank of Thailand: Exchange rate is conducive to
recovery
MOFCOM Shen: External demand is severely weak
MOFCOM Shen: Chinese trade faces grim, complicated
situation this year
MOFCOM: Yuan depreciation will put pressure on
companies with foreign debt
Interest rates will rise "pretty soon", Bank of England

policymaker Prof David Miles has predicted - as he
prepares to leave his role on the committee that takes the
decision each month. Prof Miles told BBC Newsnight
that the time to raise the bank rate from its current
historic low was "coming". But he said he expected the
"new normal" for interest rates to be between 2.5% and
3%, and "materially lower" than historically.
http://www.bbc.com/news/business-33983053
News & Data
Martin Sandbu in FT - Eurozone: The case

against cash for reform
This article examines four widely-held preconceptions
about Europes single currency. First, that the euro
eroded the export competitiveness of the weaker
countries. Second, that the resulting debt made official
bailouts necessary. Third, that a monetary union can
work only in the presence of a fiscal union large
budget transfers between countries to insure against
downturns. And fourth, that the weaker countries must
undergo deep structural reforms to be able to stay in the
euro.
http://www.ft.com/intl/cms/s/0/9ef2a034-458b-11e5af2f-4d6e0e5eda22.html#axzz3j5WeOw2I
South Korea July PPI Y/Y fell 4% from -3.6%

New Zealand Q2 PPI Input Q/Q improved to -0.3%
from -1.1%
New Zealand Q2 PPI Output Q/Q at -0.2% from -0.9%
Japan July Trade Balance fell Jpy268.1bn from
Jpy69bn (revised Jpy70.5bn)
Japan July Trade Balance Adjusted fell Jpy368.8bn
from Jpy251.7bn (revised Jpy283.4bn)
Japan July Exports Y/Y up 7.5% from 9.5%
Japan July Imports Y/Y f
Australia July Westpac Leading Index M/M flat, same
as last month
Australia July Skilled Vacancies up 0.1% from -0.9%
WSJ: Housing Builds Case for Rate Rise
U.S. housing starts in July hit their highest levels since
October 2007, rising 0.2% from a month earlier to a
seasonally adjusted rate of 1.21 million. Starts on singlefamily homes, which exclude apartments, were up
12.8%. U.S. housing starts in July hit their highest levels
since October 2007, rising 0.2% from a month earlier to
a seasonally adjusted rate of 1.21 million. Starts on
single-family homes, which exclude apartments, were up
12.8%. The strong rise in housing starts suggests that
conditions in the labor market could tighten
considerably.
http://www.wsj.com/articles/housing-builds-case-forrate-rise-1439924863?mod=wsj_nview_latest
AFR: Woodside Petroleum profit drops 40pc on
lower prices
Woodside Petroleum has warned that the oil market is
likely to remain in oversupply through next year after
reporting a 39 per cent drop in first-half profits, which
brought the dividend crashing down. Woodside will pay
an interim dividend of US66c a share, sharply lower than
the $US1.11 declared a year ago as it maintained its 80
per cent payout ratio. Bottom line net profit was also
$US679 million, down 40 per cent.
http://www.afr.com/business/energy/oil/woodsidepetroleum-profit-drops-40pc-on-lower-prices20150818-gj1gvr
Guardian: German politicians return to Berlin

for key Greek bailout vote
For the second time this summer, German politicians
have been forced to interrupt their holidays and fly back
to Berlin for a key vote on bailing out Greece. In what is
being seen as Angela Merkels last chance to ensure that
Athens stays in the eurozone, MPs will decide on
Wednesday whether to approve the latest 86bn
(60.5bn) rescue, Greeces third.
http://www.theguardian.com/world/2015/aug/18/germ
an-politicians-return-berlin-latest-greek-bailout-vote
Kathimerini: Prospect of confidence vote, snap
polls unclear amid rumors of Parliament closing
Sources close to PM Tsipras indicated Tuesday that no
final decisions will be taken before Friday. However,
speculation swirled that authorities were planning to
close Parliaments plenary in the coming days and begin
reduced summer sessions to legislate a series of prior
actions demanded by Greeces creditors. The move
would allow Tsipras to limit the influence of rebels in his
leftist SYRIZA party, as he can control the appointment
of the 100 members of the summer sessions. It would
push back snap elections, which the countrys creditors
clearly do not want, fearing that the new program will
not be implemented. Such a tactic would also certainly
prompt a vehement response from SYRIZAs radical Left
Platform, and from outspoken Parliament Speaker Zoe
Constantopoulou.
BBC: Rates to rise soon, says Bank of England

policymaker
http://www.ekathimerini.com/200680/article/ekathim
erini/news/prospect-of-confidence-vote-snap-pollsunclear-amid-rumors-of-parliament-closing
Telegraph: Kuwait eyes consortium bid for
London City Airport
Wren House Infrastructure Management, which is an
investment vehicle owned by the Kuwait Investment
Authority; Canadian giant Ontario Teachers Pension
Plan; and investment firm Hermes have teamed-up to
make an offer for London City Airport, which has been
valued at 2bn.
http://www.telegraph.co.uk/finance/newsbysector/tran
sport/11809995/Kuwait-eyes-consortium-bid-forLondon-City-Airport.html
Nation: Ratings on Thailand unchanged after
bomb attack
The bomb attack in Bangkok on Monday night has
limited immediate impact on the sovereign credit
support for Thailand but downside risks caused by
weaker tourism are increasing, said Standard & Poor's
Ratings Services. "Our sovereign credit ratings on
Thailand (foreign currency 'BBB+/Stable/A-2'; local
currency 'A-/Stable/A-2') are unaffected. Nevertheless,
the attack has increased uncertainties over political
stability and will put additional pressure on near-term
economic prospects," it said in a statement.
http://www.nationmultimedia.com/business/Ratingson-Thailand-unchanged-after-bomb-attack30266875.html

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Ranges (Up till 11.

lower. Offers in GbpUsd are found above 1.5720 from

I struggled to pen something on Euro to make it

Who said what

Bank of Thailand: Inflation has likely bottomed out

Interest rates will rise "pretty soon", Bank of England

News & Data

Martin Sandbu in FT - Eurozone: The case

South Korea July PPI Y/Y fell 4% from -3.6%

Guardian: German politicians return to Berlin

BBC: Rates to rise soon, says Bank of England

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