Economic Data
(AU) AUSTRALIA OCT AIG PERFORMANCE OF CONSTRUCTION INDEX: 35.8 V 30.9 PRIOR (7-month high; 29th month of contraction)
(JP) JAPAN OCT OFFICIAL RESERVE ASSETS: $1.274T V $1.277T PRIOR
Markets Snapshot (as of 05:00GMT)
Nikkei225 flat
S&P/ASX +0.7%
Kospi flat
Shanghai Composite -0.3%
Hang Seng -0.4%
Dec S&P500 -0.6% at 1,417
Dec gold +0.5% at $1,724/oz
Dec Crude Oil -0.2% at $88.55/brl
Notes/Observations
Asian equity markets traded mixed while much of the focus fell on the US presidential elections. President Obama scored a resounding victory over the Republican challenger Mitt Romney, surprising pundits anticipating a much tighter race. Instead, the incumbent built early momentum with a victory in Pennsylvania, followed by swing-state victories in Wisconsin, New Hampshire, and Iowa.
At about 23:15 ET, financial press projected Ohio to turn for the President as well, pushing the incumbent above the 270 electoral college vote threshold. Governor Romney's camp was said to be critical of the perceived early call by the major networks, but conceded just before 1am ET, after Virginia was reported to fall for Obama as well. In terms of Congressional elections, Democrats retained control of the US Senate with projected net gain of 1 seat, while the House of Representatives remained in the hands of the Republicans who intend to bring John Boehner as its Speaker.
Reaction in the financial markets was somewhat predictable and appeared to price in the victory by the incumbent early in the session. December S&P500 contract traded down by as much as 14 handles before paring much of those losses. Likewise, USD was down across the board on expectation of easy Fed policy continuing unencumbered from a shift in administration.
Note that Governor Romney has been vocal about more sound money policy, implying a potential road-block to ultra-accommodative Fed stance. USD/JPY briefly tested below ¥80 handle and EUR/USD hit session highs above $1.2470 after formal Obama victory projections, while December gold spiked up about $20/oz from session lows in electronic trade to reach $1,725.
Fixed Income/Currencies/Commodities
(US) API PETROLEUM INVENTORIES CRUDE: -27K V +1.5ME; GASOLINE: +1.38M V -1.5ME; DISTILLATE: +175K V -1.5ME; UTILIZATION: 86.4% V 87.6% W/W
EUR/USD: Extending gains to session-high $1.2470 following formal projections of Obama reelection; Up over 80 pips from session lows
GLD: SPDR Gold Trust ETF daily holdings rise by 2.1 tons to 1,334.1 tons
SLV: iShares Silver Trust ETF daily holdings rise to 9,982 tons from 9,970 tons (highest since Sept 27th)
USD/HKD: (HK) Hong Kong Financial Sec Tsang: Only interfering when markets fail; Hong Kong treasures economic freedom - financial press
Speakers/Political/In the Papers
(JP) Japan LDP (opposition) leader Abe will not block passage of deficit financing bill - Japanese press
(AU) Australia Foreign Min Carr: Seeking to deepen ties with China; Slowdown in China has impacted Australia revenues
(NZ) Reserve Bank of New Zealand (RBNZ) Financial Stability Report: Improving global sentiment contributes to stronger NZD; Financial system is stronger despite global uncertainty
(NZ) New Zealand Fin Min English: New Zealand economy performing at moderate levels
(NZ) RBNZ Gov Wheeler: Global growth has slowed; market sentiments have improved; Exchange rate is a matter for concern.
(CN) China Academy of Social Sciences (CASS) researcher: Should widen Yuan trading band - Chinese press
(CN) According to Nielsen, China consumer confidence has stabilized due to lower inflation - China Daily
(KR) Construction Association of Korea (CAK): Domestic orders for South Korea builders in Sept fell 16% y/y to KRW7.26T - Korean press
(KR) According to one poll, all analysts expect BOK to keep policy rates unchanged on Nov 9th; Narrow majority see a rate cut by the end of Q1 2013 - financial press
(GR) EU's Juncker: Confident austerity vote on Greece will be yes; some European economies may enter technical recession
(GR) Greece austerity legislation has now passed through the committee level; full parliament vote due tomorrow
Asia Equities
CBA.AU: Reports Q3 net profit A$1.85B v A$1.75B y/y
BHP: Succession plan for CEO Kloppers is continuing; no set schedule - financial press
Toray 3402.JP: Reports H1 Net ¥20B v ¥40B y/y, Op Profit ¥36.7B v ¥63.4B y/y, Rev ¥754B v ¥799.8B y/y
Chiyoda 6366.JP: Reports H1 Net ¥6.1B v ¥3.2B y/y, Op Profit ¥10.0B v ¥6.5B y/y, Rev ¥160.7B v ¥110.0B y/y
US Equities
URS: Reports Q3 $1.28 v $1.17e, R$2.95B v $2.97Be
NWSA: Reports Q3 $0.43 v $0.37e, R$8.14B v $8.18Be
RAX: Reports Q3 $0.19 v $0.19e, R$336M v $335Me