Ranges (Up till 11.

05am HKT)
Currency

Currency

EURUSD

1.0630-45

EURJPY

130.57-77

USDJPY

122.67-96

EURGBP

0.7030-36

GBPUSD

1.5120-40

USDSGD

1.4148-80

USDCHF
AUDUSD

1.0170-93
0.7186-0.7207

USDTHB
USDKRW

35.835-86
1154.4-1159.5

NZDUSD

0.6505-37

USDTWD

32.56-619

USDCAD

1.3342-70

USDCNH

6.4275-6.4330

AUDNZD

1.1016-47

XAU

1069.4-1071.9

Key Headlines

Our trader Sam pointed out that going into

Thanksgiving, we are likely to see trimming of
Usd longs he noted the yield spreads of the 10year UST and German Bunds, pointing to higher
EurUsd.

Sam also said that the Saudi oil comments were

from weeks energy conference

RBA Stevens will speak later today at the

Australian Business Economists' annual dinner
at 20:05 in Sydney.

FX Flows
Two things of note first into Thanksgiving and second,
the Saudi oil story.
Our trader Sam Farrell felt there is likely to be a squeeze
in EurUsd going into Thanksgiving. Sam noted that
trigger of 1.0600 barrier but there was no follow through
could set up short covering. While he usually monitors 2year yield spreads of UST and Bunds, Sam pointed out
10y Bund last night, it actually sold off 5bps last night
(higher yield), underperforming the US 10-year by 7.5bp.
Spreads are pointing EurUsd a lot higher.
EurUsd bids are seen gathering below 1.0610 while stop
buy orders lurk above. First stop 1.0660 and second
1.0690.
The other is this Saudi oil statement. The Saudi Press
Agency wrote: "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." That pushed Brent
Crude up $2.
Curious Sam called the Bloomberg journalist who posted
the comments, why he couldnt find his headline on the
website and instead found the above sentence and he
said the Arabic version where the wording can be
translated in a slightly stronger fashion. these comments

were posted on SPA and in actually fact, were made by

the Saudi Oil minister at an energy conference last week
and it looked like they were inserted into minutes of a
cabinet meeting.
What Sam found interesting was
A slim majority of delegates, 53%, voiced confidence
that OPECs policy of maintaining production levels, in
order to maintain market share, would work. 22%
stated it would not work.
91% expressed a view that the Brent oil price will
remain below $70 for the coming 12 months. While only
1% predicted that the price per barrel would exceed
$100 by this time next year.
Our strategist Bipan Rai said OPEC is still not expected
to cut production next week. We think this is a Usd story
and going into Thanksgiving, we are likely to see longs
bailed out. There are some stops under 1.3330 but bids
come in below 1.33-handle. Upside is clean unless we get
to 1.3420s where offers sit.
The Great British Pound isnt that great Global
Positioning Index shows maximum short position
coming from leverage and managed accounts. I guess
that these guys are positioning into BOE's
Carney/Haldane testimony before parliament today and
more importantly, George Osborne to deliver his
Autumn Statement on Wednesday. IFR mentioned stop
sell orders were triggered on the way to 1.5110. Just a
reminder that the last NFP Gbp got down to 1.5030, I
mentioned in my reports, there is a masked man at
1.5000.
Aud and Nzd higher versus the Usd but profit taking in
AudNzd limiting the rise in AudUsd. Furthermore, 100day SMA is at 0.7208. Be reminded that RBA Stevens
will speak later today at the Australian Business
Economists' annual dinner at 20:05 in Sydney

Asians
Things are turning out well for Malaysia from this recent
ASEAN meeting. According to Nikkei, China General
Nuclear Power will acquire all energy assets worth
$2.3bn held by controversial state fund 1MDB. Then in
SCMP, Premier Li Keqiang said China would buy more
of Malaysias treasury bonds, give it a Yuan50bn quota to
invest in the Chinese capital market, and help build
cheaper infrastructure.
1s UsdMyr NDF closed 4.2770 in NY traded down to
4.2520.
USDCNY fixed at 6.3888 in line with traders estimation.
Onshore spot could not trade above 6.3900 and as it
backed off, so did offshore USDCNH.

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.

1-year Hkd forwards continues to stay weak. Spot near

7.7500. We suspect those looking for easy-money are
still out there, banking on HKMA.

Who said what

Caixin: China End Sept banks outstanding NPL

about Yuan2trln
Japan Amari: Gains in minimum wages needs to
be in line with economic growth
China: Shanghai sent disciplinary inspectors to
Guotai Junan, Haitong
China: Shanghai sent disciplinary inspectors to
SOES and universities
Kathimerini: Bomb explodes at Hellenic
Federation of Enterprises HQ, no injuries
reported

News & Data

Australia ANZ Roy Morgan Weekly Consumer

Confidence Index slipped to 114.5 from 115.9
Japan Nov Prelim Nikkei Manufacturing PMI
52.8 from 52.4

WSJ: The Oxford Economist Running the Feds

Interest-Rate Machine
When the Federal Reserve finally decides to raise shortterm interest rates from near zero, it will be Simon
Potters job to make it happen. The 55-year-old, Britishborn head of markets at the Federal Reserve Bank of
New York had never worked at a securities-trading firm
before taking his current post three years ago. The
economist manages the Feds $4.2 trillion securities
portfolio and runs a team of nearly 500 traders and
analysts. Now, Mr. Potter will be faced with one of the
trickiest trading assignments around: making it more
expensive to borrow money when the financial system is
awash in it.
http://www.wsj.com/articles/the-oxford-economistrunning-the-feds-interest-rate-machine-1448322140?
mod=wsj_nview_latest
WSJ: ECB Says Leverage Ratio Makes Banks
More Stable
The European Central Bank said Monday that a leverage
ratio requirement may tempt some banks to take more
risk, but will still make them more stable by increasing
their capacity to absorb losses. In a new note on financial
stability, the European regulator also showed that the
stabilizing impact of a leverage ratio on banks is high for
banks with low loss-absorbing buffers, but decreases as
banks become better capitalized.
http://www.wsj.com/articles/ecb-says-leverage-ratiomakes-banks-more-stable-1448320032?
mod=wsj_nview_latest

Nikkei: Malaysian State fund sells energy assets

to Chinese company
China General Nuclear Power will acquire all energy
assets worth 9.83 billion ringgit ($2.3 billion) held by
controversial state fund 1Malaysia Development Berhad,
both companies said Monday in a joint statement. The
deal, the largest in Malaysia and in Asia's energy sector,
will give the Chinese state-owned company a major
foothold in the Southeast Asian nation and access to
1MDB's power units in Bangladesh, Egypt, Pakistan and
the United Arab Emirates.
http://asia.nikkei.com/Business/Companies/Statefund-sells-energy-assets-to-Chinese-company
SCMP: China offers economic perks to Malaysia
as it tries to ease tensions over South China Sea
Premier Li Keqiang offered Malaysia a string of
economic perks as he wrapped up a four-day trip to
smooth tensions in the South China Sea on Monday.
China would buy more of Malaysias treasury bonds, give
it a 50 billion yuan (HK$60.6 billion) quota to invest in
the Chinese capital market, and help build cheaper
infrastructure, Li told business elites in Kuala Lumpur.
http://www.scmp.com/news/china/diplomacydefence/article/1882474/china-offers-economic-perksmalaysia-it-tries-ease
Manmohan Sigh in FT: Fed risks using wrong
tool to tighten
As the Fed prepares for lift-off, its operational
framework and large balance sheet may pose challenges
to market functioning. A better option would be to keep
the reverse repo programme size at its present level and
sell US Treasuries . These bonds could be sliced and
diced for repos and related collateral usage. While the
Fed can control the amount sold, collateral gets reused,
which is not under the Feds control, so the repo rate
may not equate to the fed funds rate. However, selling of
US Treasuries can be fine-tuned, to reduce a large wedge
between two rates.
http://www.ft.com/intl/cms/s/0/0d72eaa8-885f-11e59f8c-a8d619fa707c.html#axzz3sGfrILe3
Telegraph: Saudi Arabias pockets are deep
enough to weather oil price slump
The recent slump in the price of crude oil has led many
to predict Saudi Arabias imminent economic collapse.
The country derives more than 80pc of its total revenues
from the sale of black gold, according to official
government figures. It clearly has to change how it
operates: spending cuts and other measures to tackle the
deficit are needed over the next few years. But things are
not as bad as they may look at first glance. Saudi Arabia
managed to save a lot of money from the oil rally
between the early 2000s and last year.

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.

http://www.telegraph.co.uk/finance/newsbysector/ener
gy/oilandgas/12012347/Saudi-Arabias-pockets-aredeep-enough-to-weather-oil-price-slump.html
Reuters: ValueAct gains for the year wiped out
by Valeant loss
Activist investor ValueAct Capital said its fund fell 8.3
percent during the third quarter, wiping out its gains for
the year, hurt by a plunge in shares of its main portfolio
company, Valeant Pharmaceuticals International Inc.
For the nine months ending on Sept. 30, the ValueAct
Capital Master Fund was down 0.9 percent, said the
letter, which was seen by Reuters on Monday. As of the
second quarter, the fund had been up 8 percent for the
year.
http://www.reuters.com/article/2015/11/23/usvalueact-capital-funds-idUSKBN0TC2J120151123?
feedType=RSS&feedName=businessNews

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.