Published at 00:43 (GMT) 03 Sep

EUR/USD, USD INDEX Flows - China reserves : 65% USD, 26% EUR, 5% GBP, 3% JPY (GYWC2601)

Clearer picture on allocation of China's mammoth $2.4543trillion reserves, the world's largest. According to China Securities Journal, allocation is roughly : USD 65% ($1.595trln), EUR 26% ($638bln), GBP 5% ($123bln), JPY 3% ($74bln) = giving a total of 99%, with 1% for "others" = possibly AUD, NZD. On FX, good to watch for reports of China, Asian sovereign interest in FX, with talks of 2-way interest in EUR around 1.2750/1.2850, good bids at 1.2700/1.2600 lows. Talks of Asian bids around 1.5300 lows, USD/JPY Asian offers around 84.50/85.00, possibly demand into JGBs, and AUD bids around 0.8800/0.8900 lows. Should USD INDEX rise more on risk aversion, now 82.459 toward 83.50/84.00 again, will not be surprised to hear huge Asian, China sellers in EUR, GBP, AUD on reserves management. EUR/USD could test Asian bids around 1.2750-80 again, on risk aversion. WL