Ranges (Up till 11.35am HKT) CurrencyCurrency

EURUSD1.0966-86EURJPY136.025-23

USDJPY123.87-124.12EURGBP0.7016-29

GBPUSD1.5616-42USDSGD1.3715-40

USDCHF0.9652-75USDTHB35.03-095

AUDUSD0.7290-0.7319USDKRW1062.0-1068.2

NZDUSD0.6574-0.6610USDTWD31.54-70

USDCAD1.3081-1.3133USDCNH6.2181-6.2209

AUDNZD1.1068-1.1100XAU1093.0-1097.5

Key Headlines

Canadian Prime Minister Stephen Harper triggered an election campaign Sunday and set the vote for Oct 19. According to Globe & Mail, a poll by Nanos Research showed that Conservatives hold an insignificant lead over NDP at 31.5% versus 30.1%. Since the polls margin of error is 3.1%, the three parties are in essence tied going into the campaign, which is again unprecedented. Athens stock exchange will reopen today and most people are expecting a carnage. China Caixin July Final Manufacturing PMI slipped to 47.8 from 48.2 official Manufacturing PMI released on Saturday was weak too. At 50.0 in July from 50.2 in June. Sub-indexes showed weakness across a broad front, including output as well as new orders and new export orders along with employment and prices for materials.FX FlowsCanada takes the centre stage as Prime Minister and leader of the Conservatives, Stephen Harper launches federal elections. According to Globe & Mail, a poll by Nanos Research showed that Conservatives hold an insignificant lead over NDP at 31.5% versus 30.1%. Since the polls margin of error is 3.1%, the three parties are in essence tied going into the campaign, which is again unprecedented.UsdCad opened at 1.3099 then higher on back of negative gamma and stop loss buying. We got to 1.3133 and started paring gains. Offers are light and hearsay, stops through 1.3150. China Caixin July Final Manufacturing PMI slipped to 47.8 from 48.2; market was expected slight improvement to 48.3. Small kneejerk reaction in Aud; moved from 0.7311 to 0.7290; then back up to 0.7305. UsdJpy tried to follow UsdCad path but failed. Opened at 124.00 gained 12 pips and returned to 123.95. Some said sales were linked to exporters while foreign players linked it to weak Nikkei. Offers are mentioned from 124.25 to 124.60 while buy orders are mostly under 123.45. Nikkei Asian Review said the weak Japanese index is a result of the Trans-Pacific Partnership trade pact negotiations, which ended without agreement Friday. Major decliners were linked to oil and coal products, steel products and mining. FYI, shares of Sumitomo Chemical fell near 6.4% by end of morning. No news is good news, only when it comes to Greece. Athens stock exchange will reopen today and most analysts are expecting Greek banks to fall by more than 20% over the uncertainty over timing and amount needed for recapitalization. Greek MOF on Sunday banned Greeks from transferring money from their local bank accounts to buy shares; locals will be allowed to invest cash taken from safe deposit boxes or stored at home for buying shares. Believe it or not, Euro traded 1.0966-86 since the official open. Following Fridays move, most positions have been closed out. I hear bids are at 1.0895 and there is a 1.0925-option strike Friday expiry NY cut. Interesting piece in WSJ that people buy gold when they are afraid of the future. They buy stocks at the opposite time, when they are hopeful. Today, despite worries about China, Greece, a likely Federal Reserve interest-rate increase and an uncertain corporate-earnings outlook, the gold market is giving a clear signal: Investors, on the whole, arent very frightened. Spot gold ranged 1093-1097.5. Selling has lightened up; most of them are scattered above 1103 while I hear bids from Asia below 1090. AsiansKrw is probably best performing currency this morning following a stronger than expected current account surplus and the manufacturing PMI rising to 47.6 in July from 46.1. Korea Composite Index was weak at the open, but hardly hindered the Krw. I heard partial sales were linked to exporters and most of them are profit taking by onshore funds. Market is fearful of stops in the onshore at 1062.0 but more fearful of authorities as the Krw has strengthened fair bit. Not a lot I can pen on Malaysia. The onshore spot has been 3.8250 to 3.8310. Am sure agent banks are in but rather hush about it. June trade numbers out on Aug 5 but the main attention will be Aug 7, release of the foreign reserves. Bank of Thailand MPC meets on Wed Aug 5 and interest rates are widely expected to stay at 1.5%. Back on July 18, Thai deputy PM, MR Pridiyathorn Devakula said weaker baht will help the country's exports and provide more of a boost to the struggling economy than a rate cut. He said he would rather play with the exchange rate to correct the economy. Spot UsdThb has been steady; move below 34.95 cleared some long Usd positions. China July Final Caixin Manufacturing PMI 47.8 from 48.2 and China bashing continues. Shanghai Composite opened in red no sign of recovery yet. CNY fixed at 6.1169 and all dull. Who said what

NZ Treasury: Data shows growth slowing faster than forecast

NZ Treasury: Still see growth around trend in 2015

Japan Suga: Mutual understanding that next TPP meeting to be held by end Aug News & Data

South Korea June BOP Current Account Balance at $12.186bn from $8.653bn South Korea June BOP Goods Balance at $13.216bn from $9.191bn Australia July AiG Performance of Manufacturing Index rose to 50.4 from 44.2 Australia July TD Sec Inflation M/M up 0.2% from 0.1% Australia July TD Sec Inflation Y/Y up 1.6% from 1.5% Australia June HIA New Home Sales M/M rose 0.5% from -2.3% Australia July ANZ Job Ads M/M fell 0.4% from +1.3% Japan July Final Nikkei Manufacturing PMI at 51.2 from 51.4 South Korea July Nikkei Manufacturing PMI 47.6 from 46.1 China July Final Caixin Manufacturing PMI 47.8 from 48.2 Globe & Mail: Harper launches federal election campaignStephen Harper has launched the longest election campaign since the days of John A. Macdonald, as he seeks to become the first prime minister to win four consecutive mandates since Wilfrid Laurier. But other precedents could be set instead. A new poll shows the NDP tied with the Conservatives, meaning Thomas Mulcair could become Canadas first New Democratic Prime Minister. And the poll show Justin Trudeaus Liberals also essentially tied, as he seeks to vault his party from third place to first, which again would be unprecedented. The poll conducted by Nanos Research and released Sunday, shows the Conservatives holding a statistically insignificant lead over the NDP, at 31.5 per cent to 30.1 per cent, with the Liberals close behind, at 29.3 per cent. Since the polls margin of error is 3.1 per cent, the three parties are in essence tied going into the campaign, which is again unprecedented.http://www.theglobeandmail.com/news/politics/harper-launches-federal-election-campaign/article25812039/Guardian UK Interest rates: economists and homeowners brace for Super ThursdayBritains mortgage borrowers will be warned this week to brace themselves for higher interest rates on what City of London traders have dubbed Super Thursday. At least two, perhaps three, of the nine members of the Bank of Englands interest rate-setting committee are expected to cast their votes for a rate rise. Confirmed hawks Martin Weale and Ian McCafferty, who voted for rate rises throughout the second half of 2014 before changing their minds as inflation plunged to zero earlier this year, have signalled they could soon be ready to see borrowing costs rise.http://www.theguardian.com/business/2015/aug/02/interest-rates-economists-homeowners-brace-super-thursdayAFR: House values surge 2.8pc in July - but Melbourne growth outstrips Sydney

Australian housing values across capital cities have climbed 2.8 per cent for July and 11.1 per cent over the last year, Corelogic RP Data Home Value Index results for July have shown. The two-tiered growth in Sydney and Melbourne continued to drive the property market to a record $6 trillion despite the Australian Prudential Regulation Authority imposing limits on bank lending to property investors.http://www.afr.com/real-estate/house-values-surge-28pc-in-july--but-melbourne-growth-outstrips-sydney-20150802-giq12xFT: Investors braced for reopening of Athens stock exchangeThe Athens stock exchange was set to reopen on Monday after a five-week shutdown due to the imposition of capital controls as local investors complained of discrimination over new restrictions on buying shares. The finance ministry banned Greeks from transferring money from their local bank accounts to buy shares over the weekend. Local investors would, however, be allowed to invest cash taken from safe deposit boxes or stored at home for buying shares, the ministry said.http://www.ft.com/intl/cms/s/0/5d09e706-392c-11e5-bbd1-b37bc06f590c.html#axzz3hhvdC9RnBBC: The eurozone's nagging problemsThe eurozone's crisis has passed, at least for now. Greece is not heading for the exit just yet. But there are plenty of other festering sores around. They are not immediate existential threats to the currency union, but serious problems nonetheless. Unemployment is painfully high in several countries, economic growth is patchy and unconvincing in some nations and there are eurozone governments with precarious financial positions, though none as bad as Greece. Government debt burdens are fairly high. It's more than 130% of annual national income or GDP in Italy and Portugal and in excess of 100% in Ireland, Belgium and Cyprus.http://www.bbc.com/news/business-33720980MNI ANALYSIS: RBA Could Discuss Rate Cut; Likely to Hold SteadyThe Reserve Bank of Australia is likely to meet expectations and keep the cash rate on hold at the board meeting on Tuesday but the central bank may have reason to mull a cut. Twice in two months, Governor Glenn Stevens has said the RBA remains open to the possibility of lowering the cash rate further. "We remain open to the possibility of further policy easing, if that is, on balance, beneficial for sustainable growth," Stevens said in a speech in June.https://mninews.marketnews.com/FT: Scandinavian housing bubbles spark financial stability fearsFears of housing bubbles in the three Scandinavian capitals are rising, fuelled by unprecedented negative and record low interest rates in Denmark, Norway and Sweden. Stories of frenzied bidding rounds and record-high prices are causing concern among policymakers and economists, as central banks in all three Scandinavian countries appear set to keep interest rates at historically low levels for several more years. Few expect the bubble to burst soon, with official interest rates well into negative territory in Sweden and Denmark and at a historic low in Norway. Many fear that the damage could be great when rates do rise or the economies slow.http://www.ft.com/intl/cms/s/0/3fbb0eee-268c-11e5-9c4e-a775d2b173ca.html#axzz3hhvdC9RnWSJ: Investors Are Far From Sold on GoldPeople buy gold when they are afraid of the future. They buy stocks at the opposite time, when they are hopeful. Today, despite worries about China, Greece, a likely Federal Reserve interest-rate increase and an uncertain corporate-earnings outlook, the gold market is giving a clear signal: Investors, on the whole, arent very frightened.http://www.wsj.com/articles/investors-are-far-from-sold-on-gold-1438552858?mod=wsj_nview_latestThese 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.