Alcoa Kicks Off US Earnings Season With A Warning Of China Slowdown

(AU) AUSTRALIA OCT WESTPAC CONSUMER CONFIDENCE: 99.2 V 98.2 PRIOR; M/M: 1.0% V 1.6% PRIOR (2nd month of increase)

(KR) SOUTH KOREA AUG MONEY SUPPLY L Y/Y: 9.2% V 9.0% PRIOR

(KR) SOUTH KOREA SEPT UNEMPLOYMENT RATE (SA): 3.1% V 3.2%E

(KR) South Korea Sept Bank Lending to Households (KRW): 458.5T v 459.3T prior

(PH) PHILIPPINES AUG TOTAL EXPORTS: -9.0% V +5.5%E; TOTAL MONTHLY EXPORTS: $3.8B V $4.7B PRIOR

Markets Snapshot (as of 03:15GMT)
Nikkei225 -1.7%

S&P/ASX -0.4%

Kospi -1.2%

Shanghai Composite -0.2%

Hang Seng -0.5%

Dec S&P500 -0.2% at 1,433

Dec gold +0.1% 1,766/oz

Nov Crude Oil -0.6% at $91.87/brl

Notes/Observations
Asian equity markets are in the red across the board, tracking a third consecutive session of losses in US indices. Europe continues to weigh on investor sentiment, with German Chancellor Merkels trip to Athens marked by scenes of protest against further austerity by Greeks. German Fin Min Schaeuble remained unimpressed with Greek progress on fiscal adjustment, while a Spanish press feature warned that Spain may be unable to achieve the already lowered budget deficit target of 6.3% of GDP in 2012.

EUR/USD briefly tested below $1.2840 - a 1-week low - while NZD fell to a 1-month low against the greenback. USD/JPY pair was largely unchanged, supported by ¥78.20, and AUD found support below $1.02 handle going into tomorrow's critical jobs data from Australia. Crude Oil pared some of the gains seen in US hours attributed to rising Syria-Turkey tensions, pulling back below $92/brl in WTI Dec contract.

Alcoa marked the official start of the earnings season with a beat on top and bottom lines but also moderated its 2012 global aluminum demand forecast to 6% from 7% as a result of a slowdown in China. On a conference call, Alcoa CEO went as far as to point out that China is the major factor in its cut in demand forecast, also calling European building and construction market in Q4 as weak. Despite the better than expected results, shares of AA traded down about 1% in the afterhours session, paring the initial post-earnings pop.

Fixed Income/Currencies/Commodities
CHALCO: To consider reducing copper mining IPO to $400M - financial press

(CN) According to Simon Hunt Strategic Services, copper consumption in China to contract in 2012 for the first time since 2008 before recovering in 2013 - Shanghai Daily

(US) USDA crop progress report for week ended Oct 7th; US corn mature across 18 select states: 97% v 94% last week v 86% y/y

Speakers/Political/In the Papers

(CN) China may expand subsidy for some vehicles to farmers; may end subsidies related to rural purchases of certain appliances - financial press

(CN) Shanghai Index of Consumer Sentiment in Q3 fell 4.4pts to 100.6; First fall since Q2 of 2011 - Shanghai Daily

(AU) RBC senior economist: Australia decline in export earnings will take its toll on wealth, incomes and consumption right across the economy - Shanghai Daily

(KR) Bank of Korea (BOK): GDP gap likely to stay in negative territory until 2013 - Korean press

(JP) JPMorgan projecting auto exports from Japan to China to fall about 70% in Oct-Dec quarter - Shanghai Daily

(ES) Spain may miss 2012 deficit target of 6.3% of GDP; May post 6.7-6.8% deficit - Spanish press

(GR) Greece Fin Min Stournaras: two-yr extension could be funded without additional euro zone money; reiterates deficit target of 120% of GDP by 2020

(US) US Fed's Yellen (Voter, dovish): QE purchases have depressed long-term yields, only one reason for low yields; The expectations of high unemployment explains low yields; Low rates are needed to boost growth.

Asia Equities
Hyundai Motor 005380.KR: HI Investment & Securities Co: Hyundai may miss Q3 profit and Rev targets - Korean p-ress

Hyundai Heavy 009540.KR: Awarded $270M contract for floating LNG unit from Hoegh LNG Holdings Ltd. of Norway

Fortescue FMG.AU: Exec: Confident iron ore prices will firm; Decision to lay off over 1000 staff and contractors was necessary amid volatile market conditions

Softbank 9984.JP: To double data speeds for new smartphones to 76mb/s - Nikkei News

Toshiba and Marubeni awarded rail-car order from Venezuela for about ¥12B combined - Nikkei News

FujiFilm 4901.JP: Releases high-end compact digital camera lineup - Nikkei News

US/Europe Equities
YUM: Reports Q3 $0.99 v $0.97e, R$3.57B v $3.63Be; +4.0% afterhours

AA: Reports Q3 $0.03 v $0.00e, R$5.83B v $5.56Be; -1.0% afterhours

CMI: Lowers FY12 Rev guidance to about $17B v $18.1Be (guided about $18B on Jul 31st); Guides Q3 Rev about $4.1B v $4.4Be; -4.8% afterhours

CVX: Interim Update for Q3: guides Q3 EPS substantially lower q/q; Guides upstream results lower q/q, downstream significantly lower q/q; -1.3% afterhours

FDX: Reaffirms Q2 EPS $1.30-1.45 v $1.42e, FY13 $6.20-6.60 v $6.45e (as guided Sept 18th)