Asian Market Update: South Korea to hold more artillery drills; Energy sector gains on price increase by China
Economic Data
- (JP) JAPAN NOV MERCHANDISE TRADE BALANCE TOTAL: ¥163B V ¥482BE (15-month low); ADJUSTED: ¥426B V ¥626BE; Exports y/y: 9.1% v 10.3%e; Imports y/y: 14.2% v 9.0%e
- (JP) BANK OF JAPAN (BOJ) DECEMBER MONTHLY REPORT: KEEPS ECONOMIC ASSESSMENT UNCHANGED; EXPECTS PACE OF CPI DECLINE TO MODERATE
- (AU) AUSTRALIA OCT WESTPAC LEADING INDEX M/M: 0.3% V 0.0% PRIOR
- (JP) JAPAN NOV SUPERMARKET SALES Y/Y: -0.5% V -0.3% PRIOR
- (NZ) NEW ZEALAND Q3 CURRENT ACCOUNT BALANCE (NZ$): -1.8B V -2.3BE (biggest deficit since Q4 of 2009); ACCOUNT DEFICIT-GDP RATIO: -3.1% V -3.4%E
(US) Weekly ABC Consumer Confidence: -41 v -43 prior (highest since June 29th)
Markets Snapshot (as of 12:00amET)
- Nikkei225 +0.1%
- S&P/ASX +0.2%
- Kospi +0.2%
- Taiex +0.1%
- Shanghai Composite -0.4%
- Hang Seng +0.6%
- Dec S&P Futures -0.1% at 1,250
- Feb Gold +0.1% $1,390/oz
- Feb Crude oil +0.2% $89.97/brl
- Mar Copper +0.1% at $4.28
Overview/Top Headlines
- Asian equity markets are marginally higher late in the day, tracking a 4th consecutive winning session for S&P500 in the US. The Hang Seng is leading the regional indices with a 0.6%, helped by strong gains in the energy space following yet another increase in energy prices by the NDRC overnight.
Shanghai Composite is the weakest performer amid ongoing concerns the PBoC would continue to restrain liquidity. According to an economist at China Industrial Bank, banks' reserve requirement ratio (RRR) could rise as high as 23% from the current 18.50%. In currencies, the dollar was a touch softer on European and commodity majors, as EUR/USD rose 40pips to $1.3140, GBP/USD approached $1.55, and AUD/USD continued to eye parity. USD/JPY fell slightly to ¥83.70 despite the US 10-yr yield holding well above 3.30%.
Shanghai Composite is the weakest performer amid ongoing concerns the PBoC would continue to restrain liquidity. According to an economist at China Industrial Bank, banks' reserve requirement ratio (RRR) could rise as high as 23% from the current 18.50%. In currencies, the dollar was a touch softer on European and commodity majors, as EUR/USD rose 40pips to $1.3140, GBP/USD approached $1.55, and AUD/USD continued to eye parity. USD/JPY fell slightly to ¥83.70 despite the US 10-yr yield holding well above 3.30%.
- Geopolitical concerns on the Korean peninsula resurfaced after the South announced it would hold its "largest ever" live fire drill about 100km away from the border with the North. Korean press also speculated the artillery line set up by the North during its most recent drill was most likely fake.
Recall Pyongyang denounced the artillery exercise two days ago, but also stated it does not merit a response.
Recall Pyongyang denounced the artillery exercise two days ago, but also stated it does not merit a response.
Speakers/Geopolitical/In the press
- (CH) China Commerce Min Chen Deming: 2010 FDI to rise 11% y/y to $100B - Chinese press
- (CH) China Industrial Bank Co economist Lu Zhengwei: Govt may raise banks' reserve requirement ratio (RRR) to 23% in 2011 to contain inflationary credit growth - China Daily
- (JP) Japan's govt to budget ¥7T in non-tax revenue in FY11/12 to help address the anticipated ¥23T budget deficit - Nikkei News
Equities
- Hynix Semiconductor: CEO: PC memory chip prices to impact Q4 and continue falling in early 2011 - US financial press
- MQG.AU: According to internal documents, Macquarie Bank's procedural errors resulted in steeper losses for investors in failed financial advisor Storm Financial - Sydney Morning Herald
- QAN.AU: May have to lease additional A330s; Now expects to take delivery of Dreamliner in 2013 - The Australian
- ACH: Chairman: Company to show a double-digit profit in 2010 after two years of losses - China Daily
- NKE: Reports Q2 $0.94 v $0.88e, R$4.84B v $4.8Be; -5.7% after hours
- XLNX: Guides Q3 revenue lower, to down 7-9% sequentially (implies $564M-577M v $605Me); Affirms gross margins of 65%; -3.6% after hours
- RHT: Reports Q3 $0.20 v $0.20e, R$236M v $227Me; -2.7% after hours
- TIBX: Reports Q4 $0.31 (adj) v $0.28e, R$241.2M v $228Me; +5.0% after hours
FX/Fixed Income/Commodities
- API PETROLEUM INVENTORIES: CRUDE: -5.8M V -1ME; GASOLINE: -2.9MV +500KE; DISTILLATE: +16K V -1M; UTILIZATION: 85.4% V 87.8%E
- XAU/USD: IMF said it has completed its program of gold sales - FT
- JGB: Japan's MoF sells ¥2.4T in 0.2% (0.2% prior) 2-yr JGBs; bid-to-cover 3.50x v 3.19x prior
- (CH) China top planning agency National Development and Reform Commission (NDRC): November oil consumption in China rose 15.2% y/y to 20.1M tons on colder than usual weather - China Daily
