Ranges (Up till 11.

45am HKT)
Currency

Currency

EURUSD

1.0922-56

EURJPY

135.44-85

USDJPY

123.915-124.15

EURGBP

0.6996-0.7014

GBPUSD

1.5600-25

USDSGD

1.3445-82

USDCHF
AUDUSD

0.9583-0.9602
0.7357-99

USDTHB
USDKRW

34.69-825
1157.0-1162.9

NZDUSD

0.6565-0.6654

USDTWD

31.212-460

USDCAD

1.3025-47

USDCNH

6.2128-47

AUDNZD

1.1100-88

XAU

1094.1-1099.5

Key Headlines
RBNZ rate cut, wasnt as dove as market was expecting
and they omitted the reference to Nzd level being
unjustified. As such, Nzd popped.
Some tried to sell AudNzd for stops at 1.1080 and
failed badly.
Greek parliament voted in favour of the reform plans.
230 voted for, 63 against and 7 abstained/absent.
Guardian wrote that 36 Syriza members voted against or
abstain, this is less than the 39 who rebelled last week.
Slightly better for Tsipras.
Bridgewaters billionaire founder, Raymond Dalio,
said, Our views about China have changedThere are
now no safe places to invest.

FX Flows
RBNZ cuts 25bp to 3.00% but omitted the reference to
Nzd level being unjustified and Nzd bounced. The
decision was expected but some banks were hoping for
RBNZ to be more aggressive. Some had hoped for 50bp
and more dovish. The pair rallied to 0.6654, where we
encountered decent sell orders and I was reminded by
NY colleague of stops in AudNzd cross on the downside
1.1080.
Our strategist, Bipan Rai said given the already stretched
Nzd position, we recommend wait for short squeeze rally
to sell into. Potential rallies to strong resistance at the
0.6770 mark would provide attractive levels to enter
fresh shorts as we look for potential targets at the
0.6000 level over the medium-term. Simply put, real
rates in New Zealand are way too high as dairy price
auctions continue to highlight that the New Zealand
economy is at risk. The currency needs to become more
competitive to offset these pressures.
Not a lot to mention in Aud. It was AudNzd that most
were watching. NY colleague said there are stops in the
cross at 1.1080 but decent buyer sat at 1.1100. We bought
some Aud near 0.7380 for Asian name but should see
some offers into this 0.7400.

Attention turned to Athens as Greek parliament votes for

the reform plans. Euro firmed up as results turned
towards a yes vote. In the end, 230 voted for, 63
against and 7 abstained/absent. Guardian wrote that 36
Syriza members voted against or abstain, this is less than
the 39 who rebelled last week. Slightly better for Tsipras.
Euro firmed up after the Greek decision but the climb
has been slow. There are offers are rumoured to be up at
1.0970-area and stops thereafter and bids 1.0880
downside. There are 2 decent option strikes maturing
tomorrow NY cut; 1.0900 and 1.1000 strikes for about
Eur2bn each.
Positive Nikkei at open and UsdJpy was bought. NY
ended the pair at 123.96 and rose to 124.15. Talk that the
exporters sold into 124-teens but I heard one lifer was
buyer of EurJpy, helped to soaked up UsdJpy supply. I
am reminded of bids still mid 123s.
UsdCad rose to 1.3047 on back of demand by US banks.
Usd moved back, alongside with softer UsdJpy. We
encountered Asian prop accounts buying UsdCad on
dips.

Asians
South Korea second quarter preliminary GDP rose less
than expected. Quarterly growth at 0.3% versus
expectations of 0.4% and annual growth of 2.2% versus
2.3%. General consensus is that the MERS situation
maybe under control but impact on economy will take a
while to fade. Onshore spot UsdKrw opened at 1157.0
and been bid throughout the morning. Didnt take long
to breach the 1160-level.
Market is still feeling the after effects of weekends Thai
news; UsdThb continued to climb to 34.825 despite
some smoothing ops. I hear Thai experts have rejigged
their UsdThb forecast for Q4 2015 to 35.25.
We suspect that the usual suspects are still capping the
UsdMyr. The pair just refused to advance beyond
3.8070.
With market still long UsdSgd, rally attracted profit
taking activities. Buyers are now at 1.3600-15, coming
from onshore prop accounts while offers are above
1.3680. Keep an eye on the Sgd swap, liquidity is drying
up.

Who said what

RBNZ cuts key interest rates by 25bp to 3.00%
RBNZ: Further easing likely at some point
RBNZ: Further Nzd drop is necessary
RBNZ omits reference to Nzd level being unjustified

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.

 RBNZ: Gross outlook softer than in June

Greece Tsipras: Made mistakes in past 6 months but I
have no regrets
Greece Tsipras: I fully believe out fight will not go to
waste
Greece Tsipras: Europe will not be same after the July
12 deal
Greece Tsipras: Some in EU still insist on Grexit
Greece Tsipras: We will implement the program even if
we dont agree
Greece Tsipras: German Finance Minister wants to
give us funds to exit the Euro
SAFE: Sees volatile cross-border capital flows
SAFE: Fed normalisation policy may increase crossborder capital outflows
SAFE: Impact on China from Fed policy normalisation
generally controllable
SAFE: China has the ability to handle risks from
external shocks

News & Data

RBNZ cuts key interest rates by 25bp to 3.00%
South Korea Q2 Prelim GDP Q/Q rose 0.3% from
+0.8% (est. +0.4%)
South Korea Q2 Prelim GDP Y/Y rose 2.2% from
+2.5% (est. +2.3%)
Japan June Trade Balance improved to Jpy69bn
from Jpy216bn
Japan June Trade Balance Adjusted Jpy251.7bn from
Jpy182.5bn
Japan June Exports Y/Y rose 9.5% from 2.4%
Japan June Imports Y/Y -2.9% from -8.7%
Australia NAB Business Confidence
WSJ - Giant Hedge Fund Bridgewater Flips View
on China: No Safe Places to Invest
Bridgewater Associates LP, one of Wall Streets more
outspoken bulls on China, told investors this week that
the countrys recent stock-market rout will likely have
broad, far-reaching repercussions. The funds executives
once had been vocal advocates of Chinas potential. But
that was before panic in the countrys stock markets
shaved a third of the value off Shanghais main index,
battering hordes of mom-and-pop investors and hedge
funds alike, before partially rebounding. Our views
about China have changed, Bridgewaters billionaire
founder, Raymond Dalio, wrote with colleagues in a note
sent to clients earlier this week. There are now no safe
places to invest.
http://www.wsj.com/articles/giant-hedge-fundbridgewater-flips-view-on-china-no-safe-places-toinvest-1437613434?mod=wsj_nview_latest
FT: Cut to Brazil budget target hits markets
Brazil has slashed its estimates for balancing its budget
this year, sending markets lower amid fears the move

could place its prized investment grade rating at risk.

The countrys economic team announced on Wednesday
night that it was reducing its 2015 target for the primary
fiscal surplus, the budget balance before interest
payments, from 1.2 per cent of gross domestic product to
just 0.15 per cent.
http://www.ft.com/intl/cms/s/0/50ddb0fc-30c1-11e58873-775ba7c2ea3d.html#axzz3gfOEMG3Z
WSJ: Congress Eyes Sales From Nations Oil
Stockpile for Highway Funding
Lawmakers are eyeing the Strategic Petroleum Reserve
as a piggy bank, but not without controversy. The Senate
is considering legislation that would partly replenish the
U.S. highway trust fund with $9 billion worth of sales
from the reserve, which at 695.1 million barrels of oil is
close to its 713.5-million-barrel capacity. This month, the
House passed a bill to sell 80 million barrels from the
reserve to raise $7 billion to help pay for legislation to
boost government drug approvals and research funding.
http://www.wsj.com/articles/congress-eyes-sales-fromnations-oil-stockpile-for-highway-funding-1437609382?
mod=wsj_nview_latest
Telegraph: Forex traders have been shocked into
behaving themselves but it might not last, says
BoE director
Forex traders are behaving themselves in the wake of a
series of fines and investigations, according to Chris
Salmon, the Bank of Englands markets boss. Bankers
are still reeling after UK regulators fined six lenders a
total of 1.4bn for manipulating foreign exchange
benchmarks, while a number of ex-traders are facing
prosecution for alleged fraud related to the Libor interest
rate benchmark. As a result, conduct has improved, but
more concrete action is needed to make it a permanent
change, said executive director for markets Mr Salmon.
http://www.telegraph.co.uk/finance/bank-ofengland/11756726/Forex-traders-have-been-shockedinto-behaving-themselves-but-it-might-not-last-saysBoE-director.html
FT: Eurozone borrowing rises to record as
recovery remains weak
Debt in the eurozone has reached a record high despite
an incipient economic recovery, underlining the
challenges governments face in tackling the legacy of the
sovereign debt crisis. The European Central Banks
programme of quantitative easing has pushed down
interest rates to ultra-low levels, encouraging
governments to borrow more in the early part of this
year, despite turmoil in Greece.
http://www.ft.com/intl/cms/s/0/1b78c590-3081-11e58873-775ba7c2ea3d.html?
ftcamp=published_links/rss/home_europe/feed//prod
uct#axzz3gT82RBgi

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.

MarketWatch: Russia is boosting its gold

reserves as prices plunge
Russia has been building its gold reserves as part of a
continuing effort to reallocate its reserve portfolio. But
by growing its gold stockpile, Russia may be exposing
itself to the risk of holding an asset whose value has been
steadily heading south.
http://www.marketwatch.com/story/russia-is-boostingits-gold-reserves-as-prices-plunge-2015-07-22
FT: Hollande pledges 600m in aid for Frances
ailing farmers
Franois Hollande has pledged to release more than
600m in emergency aid to support cash-strapped
farmers squeezed by falling dairy and meat prices. The
French government said on Wednesday that it will
cancel about 100m worth of taxes and other charges
owed, and will allow farmers to defer another 500m for
three to four months to give immediate financial
breathing room.
http://www.ft.com/intl/cms/s/0/e6a1ec50-3064-11e591ac-a5e17d9b4cff.html#axzz3gT82RBgi

China is engineering yet another mini-boom. Credit is

picking up again. The Communist Party has helpfully
outlawed falling equity prices. Economic growth will
almost certainly accelerate over the next few months,
giving global commodity markets a brief reprieve. Yet
the underlying picture in China is going from bad to
worse. Robin Brooks at Goldman Sachs estimates that
capital outflows topped $224bn in the second quarter, a
level "beyond anything seen historically". The Chinese
central bank (PBOC) is being forced to run down the
country's foreign reserves to defend the yuan. This
intervention is becoming chronic. The volume is rising.
Mr Brooks calculates that the authorities sold $48bn of
bonds between March and June.
http://www.telegraph.co.uk/finance/economics/117568
58/Capital-exodus-from-China-reaches-800bn-as-crisisdeepens.html

Reuters: South Korea might need stronger

medicine than QE
The slowest quarterly GDP growth in six years points to
a malaise deeper than a virus outbreak. A weaker
currency can help with faltering exports, but it wont free
households from a debt trap. A bold cocktail of tax
breaks, rebates and money-printing might be more
effective
http://www.breakingviews.com/south-korea-mightneed-stronger-medicine-than-qe/21209084.article
WSJ: Why Investors Shy Away From Chinas
$6.4 Trillion Bond Market
In recent weeks, Beijing has made determined moves to
give global money managers access to its previously
closed-off $6.4 trillion market, allowing foreign banks to
tap its short-term lending markets for the first time and
doing away with some investment restrictions. While the
moves mark a significant moment for Chinas financialmarket liberalization, the pickup has been slow.
Foreigners own less than 3% of Chinese bonds. Investors
say Chinas bond market hasnt been through a full credit
cycle, a rotation from a period of low interest rates and
easy borrowing to tight lending conditions, when
defaults can rise. That could mean pockets of turbulence
and periods of heightened volatility lie ahead.
http://www.wsj.com/articles/why-investors-shy-awayfrom-chinas-6-4-trillion-bond-market-1437593482
Ambrose Evans-Pritchard in Telegraph: Capital
exodus from China reaches $800bn as crisis
deepens
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.