Ranges (Up till 12.

15pm HKT)
Currency

Currency

EURUSD

1.0564-97

EURJPY

129.77-130.29

USDJPY

EURGBP

0.7008-20

GBPUSD

122.645123.275
1.5053-98

USDSGD

1.4080-1.4118

USDCHF
AUDUSD

1.0265-91
0.7222-84

USDTHB
USDKRW

35.79-86
1155.8-1161.8

NZDUSD

0.6584-0.6647

USDTWD

32.55-679

USDCAD

1.3327-64

USDCNH

6.4256-6.4457

AUDNZD

1.0940-92

XAU

1063.6-1074.7

Key Headlines

Left hand side fix in UsdJpy and it didnt end there.

Story in Dow Jones Newswire that Japan public pension
fund has started to hedge small of its investments
against currency fluctuations. In past, the GPIF has said
it does not hedge overseas investment. UsdJpy came off
filled bids surrounding 122.80. So far bounce has been
insignificant.
Euro played along with Aud, rose to 1.0597. Seemed
common to all there are sellers surrounding this 1.0600
and stop buy orders beyond 1.0655. Interesting that
short term names left stop sell orders in mid-1.05s

RBA unchanged as expected. Aussie focus

tomorrow will be the Q3 GDP. Over the quarter,
experts are expecting a 0.8% gain versus
previous 0.2%. However before that at 11.12am
local, RBA Governor Glenn Stevens will be
speaking at the Australia-Israel Chamber of
Commerce.

Canadian dollar tracked the AudUsd. Toronto closed

1.3361, the pair first came off 20 pips. We found no
reason for that move and we suspect it was a macro fund
behind it. Appreciation in Aussie pushed UsdCad into
1.3320s. Small bids are scattered below 1.33-handle.
Later today Canada releases the Sept GDP and BOC rate
decision on Wed.

Keep an eye on the Kiwi dairy auction later

today.

Positioning for new month or Usd profit taking?

The Greenback is offered versus most currencies
but not against CNH.

From our Fixed Income desk, Norman Hui: Early

morning sell-off in UST as soon as market opens in Asia
yield is 1.5-2bp higher. Nikkei is up +0.94% and ASX
up +1.5%, coupled with SDR inclusion of RMB, and
hearing some late rebalancing into equities post monthend likely caused bonds to underperform.

Dow Jones Newswire article on Japan pension

fund hedging currency fluctuations seduced
UsdJpy and EurJpy selling.

FX Flows
NzdUsd is well bid this morning, despite Q3 terms of
trade falling 3.7%. Report published by Statistics NZ
showed that export volumes led by meat with beef rising
12%, lamb up 8.5%. Dairy volumes rise 11% led by milk
powder. Witnessed selling of AudNzd, supposedly for
stops and Japanese were buyers of NzdJpy. They said
macro names were offering NzdUsd 0.6625-30 but not
strong enough as the pair traded up to 0.6638.
The next pair to moveAudUsd. Initially capped by
AudNzd selling, AudUsd went bid after the strong Oct
building approvals. Move above 0.7250 took out stops
and not just in AudUsd but other Aussie crosses as well.
We believe momentum funds will want to buy this
AudUsd on dips. I hear offers in AudUsd atop 0.72750.7300 and smart stops thereafter.
Aussie focus tomorrow will be the Q3 GDP. Over the
quarter, experts are expecting a 0.8% gain versus
previous 0.2%. However before that at 11.12am local,
RBA Governor Glenn Stevens will be speaking at the
Australia-Israel Chamber of Commerce.

Asians
Except for CNH, the Usd is offered. We believe this is all
positioning and also poor liquidity as we move into the
final month of 2015.
USDCNY fixed at 6.3973, in line with market
expectations versus yesterdays fix at 6.3962. There was
a squeeze up in USDCNH or panic and offshore went
to 6.4457 from 6.4340.

Who said what

PBOC Zhu: Yuan inclusion in SDR is a milestone

PBOC Zhu: China to continue pushing forward
reforms
PBOC Yi: Joining SDR has great significance
PBOC Yi: China financial reform wont
slowdown
PBOC Yi: No need to worry about Yuan
depreciation
PBOC Yi: IMF didnt review Yuan valuation in
SDR review
PBOC Yi: Yuan to be more widely recognised
PBOC Yi: Long-term goal is very few
intervention in Yuan
PBOC Yi: China would gradually form stable
interest rate corridor

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.

RBA: Aud adjusting significant declines in

commodity prices
RBA: Inflation outlook may afford scope for
further easing
RBA: Inflation consistent with target next 1-2
years
RBA: To assess whether policy is best for growth
and inflation target
RBA: Stronger employment growth and
unemployment is steady

News & Data

New Zealand Q3 Terms of Trade fell 3.7% from

+1.3% (f/c -2.6%)
Australia ANZ Roy Morgan Weekly Consumer
Confidence Index at 112.8 from 114.5
Australia Nov AiG Perf of Manufacturing Index
at 52.5 from 50.2
New Zealand QV House Prices Y/Y up 15% from
14%
South Korea Nov CPI M/M fell 0.1% from par
South Korea Nov CPI Y/Y up 1% from +0.9%
South Korea Nov Core CPI Y/Y up 2.4% from
+2.3%
Japan Q3 Capex Y/Y up 11.2% from +5.6%
Japan Q3 Capex Ex-Software Y/Y up 11.2% from
+6.6%
Japan Q3 Company Profits rose 9% from 23.8%
Japan Q3 Company Sales up 0.1% from +1.1%
South Korea Nov Exports Y/Y fell 4.7% from
-15.8%
South Korea Nov Imports Y/Y fell 17.6% from
-16.6%
South Korea Nov Trade Balance up $10.361bn
from $6.69bn
Australia Q3 Net Exports of GDP rose 1.5% from
-0.6%
Australia Q3 BOP Current Account Balance
improved to Aud18.1bn from Aud19bn (est.
Aud16.5bn; revised Aud20.5bn)
Australia Oct Building Approvals M/M rose
3.9% from 2.2%
Australia Oct Building Approvals Y/Y up 12.3%
from 12.4%
China Nov Manufacturing PMI at 49.6 from 49.8
China Nov Non- Manufacturing PMI at 53.6
from 53.1
Japan Nov Final Nikkei Manufacturing PMI 52.6
from 52.8
China Nov Caixin Manufacturing PMI 48.6 from
48.3
RBA left rates unchanged at 2.00%

Dow Jones News: Japan Government Pension

Investment Fund Begins Currency Hedging Sources
Japan's Y135 trillion ($1.1 trillion) public pension fund
has started to hedge a small amount of its investments
against currency fluctuations, according to people
familiar with the matter. The fund started to hedge
against fluctuations in the euro in the "short term" due
to a negative outlook for the currency amid expectations
for further easing by the European Central Bank, the
people said. The fund previously didn't hedge any of its
roughly Y50 trillion in assets denominated in foreign
currencies. A GPIF official declined to comment on
whether the GPIF currently was using currency hedging
or not, but said that the fund was ready to use currency
hedging if deemed necessary.
http://www.wsj.com/articles/japan-pension-fundhedges-against-currency-moves-1448937430?
mod=wsj_nview_latest
WSJ: China Sees No Need for Yuan Depreciation
After IMF Move
China will keep its currency at a reasonable level and
sees no need for depreciation, a top central-bank official
said. The comments from Peoples Bank of China Vice
Governor Yi Gang came hours after the International
Monetary Fund added Chinas yuan to its basket of
reserve currencies, known as Special Drawing Rights, or
SDR. The move prompted speculation that China would
let the currency drift lower.
http://www.wsj.com/articles/china-sees-no-need-foryuan-depreciation-after-imf-move-1448941750?
mod=wsj_nview_latest
WSJ: The Yuan and Chinese Reform
The International Monetary Fund announced Monday
that it will include the Chinese yuan in its reservecurrency basket, also known as special drawing rights.
But if the yuan is to become a real international
currency, Beijing must prepare its financial system for
far greater openness. Chinas financial system will also
have to be much more integrated into the international
system. Its worth remembering that the yen is also part
of the IMFs reserve basket, though Japans currency has
never gained the global acceptance of the dollar and
euro.
http://www.wsj.com/articles/the-yuan-and-chinesereform-1448929275?mod=wsj_nview_latest
WSJ: Puerto Rico Debt Payment Coming Due
Puerto Rico Gov. Alejandro Garca Padilla on Monday
said that he was still deciding whether to pay more than
$350 million owed to investors as a Tuesday deadline
loomed, in the latest twist in the U.S. commonwealths
showdown with creditors.

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.wsj.com/articles/puerto-ricos-governorweighs-paying-investors-ahead-of-tuesday-deadline1448914632?mod=wsj_nview_latest
Telegraph: Federal Reserve agrees to rein in
emergency lending after criticism over AIG
rescue
The Federal Reserve has agreed to rein in its emergency
lending powers following concerns the US central bank
went too far in bailing out lenders during the financial
crisis. The Feds board, led by chairman Janet Yellen,
approved measures that included only being allowed to
rescue at least five firms at a time, instead of single
entities.
http://www.telegraph.co.uk/finance/newsbysector/bank
sandfinance/12025862/Federal-Reserve-agrees-to-reinin-emergency-lending-after-criticism-over-AIGrescue.html
Australian: Turnbull faces RBA changing of the
guard
Turnbull government faces a critical economic test over
the coming year as three vacancies emerge on the
Reserve Bank of Australias board. The main case for
changing the six non-government roles on the ninemember board is that the challenges facing the economy
have altered and the growth narrative of a resourceled expansion is expected to be markedly different to
what it has been over the past two decades.
http://www.theaustralian.com.au/business/economics/t
urnbull-faces-rba-changing-of-the-guard/storye6frg926-1227628899606
Malaysia Kini: Action against 1MDB some
progress, says Zeti
Malaysia's central bank has had some progress in taking
action against 1MDB with regards to approvals given to
the state fund, Bank Negara governor Zeti Akhtar Aziz
said today. "We have already, as I had mentioned,
completed our investigations and now there is some
progress in the actions that are being taken, relating to
some of the approvals we have given them (1MDB)," Zeti
said to reporters after officiating the Leadership Energy
Summit Asia in Kuala Lumpur.
http://www.malaysiakini.com/news/321685

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.