Ranges (Up till 11.

45am HKT)
Currency

Currency

EURUSD

1.06165-37

EURJPY

130.515-73

USDJPY

122.82-123.07

EURGBP

0.7046-515

GBPUSD

1.5066-81

USDSGD

1.4050-73

USDCHF
AUDUSD

1.0254-69
0.7306-45

USDTHB
USDKRW

35.75-765
1153.7-1160.3

NZDUSD

0.6654-81

USDTWD

32.66-749

USDCAD

1.3355-72

USDCNH

6.4395-6.4475

AUDNZD

1.0969-95

XAU

1068.8-1070.8

Key Headlines

Second dove in less than 24 hours. Fed Res Lael

Brainard spoke at the Stanford Institute for
Economic Policy Research. Urged FOMC
members to move cautiously on rates. Nothing
new as shes a huge dove.
Aussie GDP headlines strong but details little
worrying.

FX Flows
Australian dollar printed 0.7345 after the release of third
quarter GDP. But there was no follow-through.
Headlines were strong but details of the Q3 GDP were
not as good. The biggest contribution came from the
exports of goods and services. ABS said the report spans
a period when Australias currency dropped almost 9%
in response to record-low interest rates as the central
bank sought to spur investment outside the resources
industry. From ABC - overall domestic demand growth
fell by more in the September quarter; real net
disposable income, which is a broader measure of the
change in national wellbeing, fell 1.2%, well behind the
overall growth in the economy.
AudUsd turned back to 0.7306, most of the sellers are
from fast money, taking profit. Our London strategist
Jeremy Stretch highlight 0.7345 as resistance
shoulder-head-shoulder in the hourly charts back Oct 15.
RBA Stevens spoke in Perth and offered nothing on
exchange rates.
According to our trader Sam, with Aussie short-end rates
all coming lower, best value is to buy Aud. However,
AudNzd remains his favourite trade. Positioning in Nzd
has depleted and even with better dairy auction, this Nzd
produced no rally. There is about 46% chance priced in
for RBNZ cut Dec 10 while next RBA is Feb 2016. Yield
spreads point the cross to 1.1200.
EurUsd touch lower from where NY closed with little
interest. An observation from our trader Sam when we

walked in the right hand side aggressors volume in

EurUsd on EBS was Eur4.8bn. So, given the amount
EurUsd rally was limited to 1.0637. I hear fresh selling
atop 1.0650 while buying occurring below 1.0555. Two
decent options maturing in NY today 1.0500 and
1.0600.
UsdCad mirrored the Aussie. Our strategist Bipan said
the focus now turns to the BOC statement later today
and we expect the Bank to retain its neutral/dovish tone
with little material, or market moving changes in the
language of the statement. UsdCad is likely to take cue
from external developments, keep a close watch on oil
futures and of course, Fridays OPEC meeting in Vienna.

Who said what

China Vice Fin Minister: SDR will help China

complete reforms
China Vice Fin Minister: Someday FX will be
fully market-driven
RBA Stevens: Australia terms of trade may fall
further
RBA Stevens: Some difficult time before
resources adjustment is over
RBA Stevens: More adjustment in resources
ahead
RBA Stevens: New growth opportunities rise in
Asias middle class
RBA Stevens: Weak demand, more supply
behind commodities price falls
RBA Stevens: India growth potential is
opportunity for Western Australia
RBA Stevens: Q3 GDP at 0.9% is not a bad
outcome
RBA Stevens: Over the quarter growth is just
below trend
RBA Stevens: Interest rates already very low,
more can be done if needed
RBA Stevens: Globally too much reliance on
central banks for growth
Fed Brainard: Cautious gradual approach to
normalisation needed
Fed Brainard: We should be cautious about
raising rates
Fed Brainard: US economy is growing only
modestly above potential
Fed Brainard: Usd effect in Fed model implies
delay in lift-off
Fed Brainard: Persistent weakness in core
inflation deserves vigilance

News & Data

South Korea Oct BOP Current Account Balance

at $8.96bn from $10.61bn

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.

South Korea Oct BOP Goods Balance $10.739bn

from $12.058bn
UK Nov BRC Shop Price Index Y/Y fell 2.1%
from -1.8%
Australia Q3 GDP Q/Q up 0.9% from +0.2%
(est. +0.8%)
Australia Q3 GDP Y/Y up 2.5% from 2.0% (est.
+2.4%)

FT: Emerging market portfolio flows: back in the

red
The IIF said there were combined cross-border outflows
from EM stocks and bonds by non-resident investors of
$3.5bn in November, after inflows of $13bn in October.
November was the fourth month of the past five to see
outflows, although the total for the year to date remains
positive at $63.2bn, according to the IIF.
http://www.ft.com/intl/cms/s/3/97479b9c-9850-11e595c7-d47aa298f769.html#axzz3t1M6bPZb
Jeremy Warner in Telegraph: Mario Draghi
moves centre stage in Europe's epic lurch to
federalism
Three quite different central banks, and three quite
different approaches. The truth is, however, that by
sanctioning further easing, the ECB is merely following
the path already blazed by the Federal Reserve and the
Bank of England. With the eurozone lagging the two
main Anglo-Saxon economies by some distance in terms
of recovery in output, the differences are about timing
rather than anything more fundamental. By contrast,
eurozone policymakers reacted first by burying their
heads in the sand and refusing to acknowledge what was
going on. Denial was followed by fragmentation in
response, or treating the euros existential crisis as a
series of self-contained national crises demanding
national solutions.
http://www.telegraph.co.uk/finance/economics/120278
70/Mario-Draghi-moves-centre-stage-in-Europes-epiclurch-to-federalism.html
WSJ: Why Its Still Too Early for the Fed to Start
Raising Interest Rates
U.S. employment remains well below its potential,
according to the most recent Congressional Budget
Office assessment. This shortfall is equivalent to about
3.5 million full-time jobs. Consequently, even if nonfarm payrolls continue growing at a pace of 200,000
jobs per month, this employment gap will not be closed
until 2017. Even the inflation rate of core personal
consumption expenditureswhich excludes food and
energy priceshas been trending downward since 2011
and stands at 1.3%. The magnitude of the inflation
shortfall is evident from other indicators as well. Recent
economic readings, however, seem notably less
sanguine. Consumer spending barely budged in

September and October, while shipments of non-defense

capital goods (excluding aircraft) have been essentially
flat since August.
http://blogs.wsj.com/washwire/2015/12/01/why-itsstill-too-early-for-the-fed-to-start-raising-interestrates/?mod=wsj_nview_latest
WSJ: One Investor Just Put on a Big Trade to
Hedge Against a Small-Cap Plunge
A hefty trade in iShares Russell 2000 ETF options
attracted attention on Tuesday, ranking among the
largest options trades of the day. The trade, known as a
put spread, protects the investor from a drop of 10% to
24% in the Russell 2000 ETF through May. The investor
bought 111,300 puts in the Russell 2000 ETF with a
strike of $107 that expire in May and sold 111,300 puts
with a strike of $90 that expire in May, according to
Henry Schwartz, president of options-data provider
Trade Alert.
http://blogs.wsj.com/moneybeat/2015/12/01/oneinvestor-just-put-on-a-big-trade-to-hedge-against-asmall-cap-plunge/?mod=wsj_nview_latest
Jacob Greber in AFR: Glenn Stevens reminds
nation of the enduring benefits of the boom
Reserve Bank of Australia governor Glenn Stevens has
reminded the nation that the legacy of the resources
boom will permanently boost income and wealth for
most despite the collapse in commodity prices and
mining investment. In a speech in Perth in which the
governor reflected on the spectacular rise and fall of the
past decade in the terms of trade, Mr Stevens expressed
confidence that the benefits far outweigh the pain of the
current downturn. The governor also again signalled that
the Reserve Bank's focus would remain on keeping the
dollar low to help offset the drag caused by falling prices
for iron ore, coal and LNG.
http://www.afr.com/news/economy/monetarypolicy/glenn-stevens-reminds-nation-of-the-enduringbenefits-of-the-boom-20151201-gld3tb
Jacob Greber in AFR: Why GDP means the RBA
can't afford to 'chill' over the $A
The economy rebounded in the September quarter
thanks to a surge in exports and surprisingly robust
company profits, Wednesday's national accounts will
likely show. The growing economic strength will
underscore why the Reserve Bank of Australia kept its
explicit interest rate "easing bias" in place after a board
meeting on Tuesday, its last for the next nine weeks.
Frustration is creeping in at the Reserve Bank that the
dollar has regained strength in recent weeks, despite
steep falls in global prices for the nation's number one
export commodity, iron ore.

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.afr.com/news/economy/monetarypolicy/why-todays-gdp-means-the-rba-cant-afford-tochill-over-the-aud-20151201-glcnsd
Reuters: Lockheed Martin wins contract for
upgrade of Singapore F-16s
Lockheed Martin Corp has been awarded a contract
worth $914 million to upgrade Singapore's F-16 aircraft,
the Pentagon said on Tuesday. The work is expected to
be complete by the middle of 2023 and was a result of a
sole source acquisition, the U.S. Department of Defense
said in its daily digest of major contract awards. It was
unclear how many aircraft would be upgraded. In 2014,
the Defense Department notified Congress that it had
approved the sale to Singapore of upgrades for 60 F-16
fighter jets.
http://www.reuters.com/article/2015/12/01/uslockheed-f16-singapore-idUSKBN0TK5XM20151201?
feedType=RSS&feedName=businessNews
Bangkok Post: US FAA downgrades Thai aviation
The US Federal Aviation Administration (FAA) has
downgraded Thailands aviation sector, setting the stage
for possible worldwide bans of Thai-registered airlines.
"A reassessment in July 2015 found that Thailand did
not meet international standards," the US regulation
agency said a statement posted on its website on
Tuesday. "Today's announcement follows ongoing
discussions with the government of Thailand which
concluded on Oct 28," it added.
http://www.bangkokpost.com/news/transport/781877/f
aa-downgrades-thai-aviation
Times: We havent got a plan if UK votes for
Brexit, Osborne admits to MPs
The chancellor has not yet asked civil servants to start
contingency planning for the possibility that Britain will
leave the European Union and has admitted that the
referendum could be as far as two years away. Speaking
to the Treasury select committee alongside George
Osborne,
Mark
Bowman,
director-general
for
international affairs at the Treasury, was asked what
preparations the government was making in the event of
an out vote in the referendum on Britains membership
of the EU. He said that the civil service was focused
solely on renegotiations.
http://www.thetimes.co.uk/tto/business/economics/arti
cle4629537.ece

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.