Australia lowers surplus forecast
Economic Data
(JP) JAPAN SEPT MERCHANDISE TRADE BALANCE TOTAL: -¥558.6B V -¥547.9BE; ADJ TRADE BALANCE: -¥980.3B V -¥760.3BE (multi-year high deficit)
(TW) TAIWAN SEPT UNEMPLOYMENT RATE: 4.3% V 4.3%E
Markets Snapshot (as of 03:30GMT)
Nikkei225 -0.6%
S&P/ASX -0.6%
Kospi -0.8%
Shanghai Composite -0.5%
Hang Seng +0.1%
Dec S&P500 +0.1 at 1,425
Dec gold +0.1% at 1,725/oz
Dec Crude Oil +0.2% at $90.65/brl
Notes/Observations
Asian equity markets are in the red across the board, tracking broad-based declines in US indices on Friday. Tech sector weakness in the opening week of the earnings season continues to weigh on tech-heavy bourses of South Korea and Taiwan, while Nikkei225 appears to be increasingly immune to the recent declines in the yen. Latest economic data out of Japan saw trade deficit come in higher than expected as exports fell at the fastest rate since the post-earthquake slump seen in early 2011.
Tensions with China are also reflected in the disappointing numbers, with China shipments falling 14.1% - the biggest decline on record for September. Tokyo markets are increasingly pricing in the likelihood of disappointing first half corporate results going into the start of Japan's earnings season this week.
Economy Minister Maehara said Japan needs more policy support and monetary easing to boost growth while also attempting to clarify that PM Noda still intends to dissolve parliament by the end of the year.Separately, BOJ Gov Shirakawa said economic growth is leveling off and CPI will likely remain flat for the time being. JPY continues to weaken into the tail end of the session, with USD/JPY rising some 15pips toward ¥79.40.
In Australia, Treasurer Swan released the Mid-year Economic and Fiscal Outlook (MYEFO) that continues to target budget surplus in the current fiscal year albeit at a lower level and at the expense of more public services. Australia Treasury lowered its surplus target to AUD 1.08B in FY12/13 vs AUD 1.54B projected in May, and also announced it would reduce spending on health care and family support.
Analysts suggested the fiscal restraint should put more pressure on the RBA to continue lowering interest rates, just as AUD/USD dipped to session low $1.03 handle. Separately, Australia govt also lowered its FY12/13 GDP target from 3.25% to 3.0% and also forecasted a bigger decline in exports to fall by 8% this year vs 5.75% prior target.
Fixed Income/Currencies/Commodities
USD/HKD: (HK) Hong Kong Monetary Authority (HKMA) bought $603M in its first defense of the currency peg since 2009 after it touched the upper limit of target range - financial press
Speakers/Political/In the Papers
(CN) China Press Op ed: Meeting 2012 trade growth target (10%) is "hopeless" as various Eastern provinces are expected to miss their targets
(CN) PBoC: Money supply growth is already above target; Data suggests economy is bottoming - financial press
(CN) China's top four banks' Oct 1-19th new loans seen at CNY80-100B - financial press
(JP) BoJ Gov Shirakawa: Economic growth is leveling off; likely to resume recovery following period of flat growth
(AU) Analysts see Australia annual CPI slowing to 1.6% y/y, justifying additional policy easing - SMH
(AU) RBA Dep Gov Lowe: Increase in construction activity could offset decline of investments in resources sector - The Australian
(ES) Spain People's Party (ruling) said to have won regional Galicia elections - financial press
(GR) Greece Fin Min Stournaras: Will redouble efforts to secure a deal with inspectors so as to receive the next tranche of loans - Greek press
(DE) German Finance Ministry: Sees momentum in economy returning in 2013; Q4 still expected to be weak; No risk of inflation in Germany at this time - financial press
(EU) ECB's Knot supports German Fin Min Schaeuble's call for stronger debt controls - Welt am Sonntag interview
(IT) Italy PM Monti: Just a few months to go until we see clear signs of recovery - financial press
(IR) Iran and US both deny earlier press speculation that they scheduled bilateral negotiations on Iran's nuclear program - financial press
(US) According to a report from US intelligence agencies, there is no evidence that last month's attack on US consulate in Benghazi, Libya was ordered by Al-Qaeda - LA Times
(IS) Israeli and US troops holding the largest ever joint military operation this weekend - financial press
Asia Equities
Mitsubishi Heavy 7011.JP: Awarded ¥13.5B order in Japan for waste incineration plant - financial press
Nissan NSANY: Plans to lower prices on Leaf electric vehicle - FT
Sony SNE: Plans to cut additional 2k jobs, close facility in Japan - Asahi News
JFE Holdings 5411.JP: May report H1 pretax profit down 90% y/y to below ¥5B - Nikkei News
Samsung Electronics 005930.KR: Tokyo high courts rejects injuction request regarding iPhone - Asahi News
Hynix 660.KR: Filed new trial with a US court related to prior patent-infringement case that Rambus won 6 years ago - Korean press
GrainCorp GNC.AU: Receives conditional proposal from ADM which is said to be prepared to acquire outstanding shares at A$11.75/shr
WPL.AU: Bids for Leviathan gas rights - financial press
US Equities
OPEN: Yahoo CEO Mayer said to be interested in potential acquisition of Open Table and other tech firms - financial press
BP: Board approves $27B deal to sell its TNK-BP stake - Times
Economic Data
(JP) JAPAN SEPT MERCHANDISE TRADE BALANCE TOTAL: -¥558.6B V -¥547.9BE; ADJ TRADE BALANCE: -¥980.3B V -¥760.3BE (multi-year high deficit)
(TW) TAIWAN SEPT UNEMPLOYMENT RATE: 4.3% V 4.3%E
Markets Snapshot (as of 03:30GMT)
Nikkei225 -0.6%
S&P/ASX -0.6%
Kospi -0.8%
Shanghai Composite -0.5%
Hang Seng +0.1%
Dec S&P500 +0.1 at 1,425
Dec gold +0.1% at 1,725/oz
Dec Crude Oil +0.2% at $90.65/brl
Notes/Observations
Asian equity markets are in the red across the board, tracking broad-based declines in US indices on Friday. Tech sector weakness in the opening week of the earnings season continues to weigh on tech-heavy bourses of South Korea and Taiwan, while Nikkei225 appears to be increasingly immune to the recent declines in the yen. Latest economic data out of Japan saw trade deficit come in higher than expected as exports fell at the fastest rate since the post-earthquake slump seen in early 2011.
Tensions with China are also reflected in the disappointing numbers, with China shipments falling 14.1% - the biggest decline on record for September. Tokyo markets are increasingly pricing in the likelihood of disappointing first half corporate results going into the start of Japan's earnings season this week.
Economy Minister Maehara said Japan needs more policy support and monetary easing to boost growth while also attempting to clarify that PM Noda still intends to dissolve parliament by the end of the year.Separately, BOJ Gov Shirakawa said economic growth is leveling off and CPI will likely remain flat for the time being. JPY continues to weaken into the tail end of the session, with USD/JPY rising some 15pips toward ¥79.40.
In Australia, Treasurer Swan released the Mid-year Economic and Fiscal Outlook (MYEFO) that continues to target budget surplus in the current fiscal year albeit at a lower level and at the expense of more public services. Australia Treasury lowered its surplus target to AUD 1.08B in FY12/13 vs AUD 1.54B projected in May, and also announced it would reduce spending on health care and family support.
Analysts suggested the fiscal restraint should put more pressure on the RBA to continue lowering interest rates, just as AUD/USD dipped to session low $1.03 handle. Separately, Australia govt also lowered its FY12/13 GDP target from 3.25% to 3.0% and also forecasted a bigger decline in exports to fall by 8% this year vs 5.75% prior target.
Fixed Income/Currencies/Commodities
USD/HKD: (HK) Hong Kong Monetary Authority (HKMA) bought $603M in its first defense of the currency peg since 2009 after it touched the upper limit of target range - financial press
Speakers/Political/In the Papers
(CN) China Press Op ed: Meeting 2012 trade growth target (10%) is "hopeless" as various Eastern provinces are expected to miss their targets
(CN) PBoC: Money supply growth is already above target; Data suggests economy is bottoming - financial press
(CN) China's top four banks' Oct 1-19th new loans seen at CNY80-100B - financial press
(JP) BoJ Gov Shirakawa: Economic growth is leveling off; likely to resume recovery following period of flat growth
(AU) Analysts see Australia annual CPI slowing to 1.6% y/y, justifying additional policy easing - SMH
(AU) RBA Dep Gov Lowe: Increase in construction activity could offset decline of investments in resources sector - The Australian
(ES) Spain People's Party (ruling) said to have won regional Galicia elections - financial press
(GR) Greece Fin Min Stournaras: Will redouble efforts to secure a deal with inspectors so as to receive the next tranche of loans - Greek press
(DE) German Finance Ministry: Sees momentum in economy returning in 2013; Q4 still expected to be weak; No risk of inflation in Germany at this time - financial press
(EU) ECB's Knot supports German Fin Min Schaeuble's call for stronger debt controls - Welt am Sonntag interview
(IT) Italy PM Monti: Just a few months to go until we see clear signs of recovery - financial press
(IR) Iran and US both deny earlier press speculation that they scheduled bilateral negotiations on Iran's nuclear program - financial press
(US) According to a report from US intelligence agencies, there is no evidence that last month's attack on US consulate in Benghazi, Libya was ordered by Al-Qaeda - LA Times
(IS) Israeli and US troops holding the largest ever joint military operation this weekend - financial press
Asia Equities
Mitsubishi Heavy 7011.JP: Awarded ¥13.5B order in Japan for waste incineration plant - financial press
Nissan NSANY: Plans to lower prices on Leaf electric vehicle - FT
Sony SNE: Plans to cut additional 2k jobs, close facility in Japan - Asahi News
JFE Holdings 5411.JP: May report H1 pretax profit down 90% y/y to below ¥5B - Nikkei News
Samsung Electronics 005930.KR: Tokyo high courts rejects injuction request regarding iPhone - Asahi News
Hynix 660.KR: Filed new trial with a US court related to prior patent-infringement case that Rambus won 6 years ago - Korean press
GrainCorp GNC.AU: Receives conditional proposal from ADM which is said to be prepared to acquire outstanding shares at A$11.75/shr
WPL.AU: Bids for Leviathan gas rights - financial press
US Equities
OPEN: Yahoo CEO Mayer said to be interested in potential acquisition of Open Table and other tech firms - financial press
BP: Board approves $27B deal to sell its TNK-BP stake - Times