From: Richard Kahn To: "jeffrey E." <[email protected]> Subject: Fwd: Update in USDCNH Date: Tue, 11 Aug 2015 14:51:44 +0000 Inline-Images: Mail_Attachment.gif; Mail_Attachment(1).gif; Mail_Attachment(2).gif; Mail_Attachment(3).gif; Mail_Attachment(4).gif; Mail_Attachment(5).gif; Mail Attachment(6).gif; Mail_Attachment(7).gif; Mail Attachment(8).gif; Mail_Attachment(9).gif not sure daniel understood trade when we were finally at breakeven and he recommended we keep trade on books.. Richard Kahn HBRK Associates Inc. Begin forwarded message: From: Daniel SI Sub'ect: Update in USDCNH D To: jeevacation@ mail.com Cc: Paul Morris < . Vahe Ste anian >, Stewart Oldfield < >, :17:38 PM EST Classification: Public Jeffrey, Rich and I spoke last week on USDCNH, and I wanted to send a recent piece from our research team on this topic. For full disclosure, I personally don't share our research team's recommendation, as USDCNH vol still extremely low and it represents a very cheap out-of-consensus expression of CNH out-performance vs. USD, so don't see the value of crossing bid offer on the transaction. Having said that, our research team advocates closing their USDCNH put spreads as they view "the next phase of FX depreciation will be driven more by China's own worsening fundamentals, namely: 1) slower growth and disinflation, (2) a pick-up in outflows, (3) de-leveraging that increases short-term risks and (4) valuations approaching expensive extremes" You could unwind you $75mm USDCNH put struck at 6.16 expiring on 12-Aug-2015 for $270k bid (Spot ref 6.1310 - the mid would be $315k - pricing as of noon 11/03/2014) You paid $273k for it. More details on the research piece below. Best regards, Daniel EFTA01197426