Asian Market Update: Asia treads water on mixed sentiment for PBoC action; USD consolidates gains with focus on Spain debt auction
Economic Data
- (NZ) NEW ZEALAND DEC NBNZ BUSINESS CONFIDENCE: 29.5 V 33.2 PRIOR (first decline in 3 months); NBNZ ACTIVITY OUTLOOK: 34.5 V 35.3 PRIOR
- (AU) AUSTRALIA DEC CONSUMER INFLATION EXPECTATION: 2.8% V 3.1% PRIOR (5-month low)
- (NZ) NEW ZEALAND NOV BUSINESS NZ PMI: 52.7 V 50.0 PRIOR (5-month high)
- (NZ) NEW ZEALAND Q4 WESTPAC CONSUMER CONFIDENCE: 108.3 V 114.1 PRIOR (6-month low)
- (KS) SOUTH KOREA NOV DEPT STORE SALES Y/Y: 10.1% V 13.3% PRIOR; DISCOUNT STORE SALES Y/Y: 1.7% V 0.0% PRIOR
Markets Snapshot (as of 12:30amET)
- Nikkei225 +0.2%
- S&P/ASX +0.3%
- Kospi -0.6%
- Taiex +0.2%
- Shanghai Composite +0.1%
- Hang Seng -0.4%
- Dec S&P Futures flat at 1,231
- Feb Gold flat $1,380/oz
- Jan Crude oil -0.3% $88.32/brl
- Mar Copper -0.4% at $4.11
Overview/Top Headlines
- Asian equity markets are trading mixed amid some modest caution on yet another final-hour retreat in US indices. Since the start of the week, US markets reversed early gains in the final hours of trading and today was no exception, though today's selloff marked the biggest peak-to-trough retreat. Late in the Asian session, Dec S&P futures are flat, supported at US session lows of 1,234. In commodities, Feb gold briefly fell below $1,380, copper traded sideways above $4.11, and crude ranged around $88.20-70.
- In regional indices, Nikkei225 is near-flat despite the 10-week highs in USD/JPY, while Shanghai Composite was contained by renewed concerns over an impending PBoC action. The chairman of a state-run China Construction Bank called for the central bank to raise interest rates, warning negative real interest rates will negatively impact China's economy. PBoC Gov Zhou still appears to be unyielding, justifying the weekend hold by stating China's economic recovery is not on solid ground and also noting he is more concerned with the core CPI as a major indicator for money supply. PBoC auction of 3-month paper has also not tipped a tightening, keeping the coupon unchanged for 5th consecutive week at 1.8131%.
Speakers/Geopolitical/In the press
- (CH) Banks in Shanghai have been ordered to not issue fixed-asset related loans for the rest of Dec - US financial press
- (CH) China citizens' price satisfaction at 11-yr low 13.8% amid rising inflation pressure - China Daily
- (AU) Former RBA member Paul Bloxham: RBA is likely to raise interest rates by 100 bps over the next 15-months; Next hike seen in Q2 2011 - The Australian
- (TT) Taiwan Central Bank has asked banks to report any large foreign controlled fund movements in a timely manner - US Financial Press
Equities
- KND: Guides initial FY11 EPS $1.45-1.60 v $1.45e, Rev $4.8B v $4.5Be; +4.2% afterhours
- AIR: Reports Q2 $0.42 v $0.35e, R$447M v $409Me; +6.0% afterhours
- TTMT.IN: Will raise vehicle prices in January due to increased input costs - spokesperson
- VBA.AU: Hired Deutsche Bank to examine strategic options including tie ups, joint marketing and stake sale - Telegraph
- AXA.AU: AMP completes due diligence on AXA; Next steps will be for shareholder, court and other regulatory approvals - The Australian
- Woori Finance: South Korea Govt may suspend sale of 57% stake in Woori after 2 groups pulled out of the bidding - US Press
- ASX.AU: Australian Competition and Consumer Commission (ACCC) gave approval for the ASX/SGX merger; Next hurdle to clear will be the Parliament - Sydney Morning Herald
- VBA.AU: ACCC has approved Virgin Blue alliance with Air New Zealand with conditions - NZ Herald
FX/Fixed Income/Commodities
- GLD: SPDR Gold Trust daily holdings fall by 0.6 tons to 1,286.2 tons
- (JP) Bank of Japan (BOJ) bought ¥14.2B in ETFs as part of ¥5T asset-purchase program on Wednesday - Nikkei News
- (US) PIMCO's Bill Gross last month increased his position in US govt debt from 28% to 30% in his Total Return Fund; This was the first time that the fund raised its holdings of US debt since June - Telegraph
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