Economic Data
(AU) AUSTRALIA FEB UNEMPLOYMENT RATE: 5.2% V 5.2%E (1st rise in 3 months); EMPLOYMENT CHANGE: -15.4K V 5.0KE (3rd month of decline out of the past 4); PARTICIPATION RATE: 65.2% V 65.3%E
(BR) BRAZIL CENTRAL BANK (COPOM) CUT THE SELIC TARGET BY 75BPS TO 9.75%; (MORE THAN 50BP CUT EXPECTED)
(JP) JAPAN JAN CURRENT ACCOUNT TOTAL: -¥437.3B V -¥320BE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥115.6B V ¥322BE (multi-year low); TRADE BALANCE: -¥1.38T V -¥1.4TE (largest deficit on record)
(JP) JAPAN Q4 FINAL GDP Q/Q: -0.2% V -0.2%E; NOMINAL GDP Q/Q: -0.5% V -0.3%E ; GDP ANNUALIZED: -0.7% V -0.6%E
(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED 3.25%; AS EXPECTED
(NZ) RESERVE BANK OF NEW ZEALAND (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 2.50% (AS EXPECTED)
(JP) JAPAN FEB ECO WATCHERS CURRENT SURVEY: 45.9 V 44.1 PRIOR; OUTLOOK: 50.1 V 47.1 PRIOR
(JP) JAPAN FEB BANKRUPTCIES Y/Y: +10.4% V -2.6% PRIOR
(JP) JAPAN FEB TOKYO AVERAGE OFFICE VACANCIES: 9.15% V 9.2% PRIOR (1st decline in 5-months)
(JP) JAPAN FEB PRELIMINARY MACHINE TOOL ORDERS Y/Y: -8.6% V -6.9% PRIOR
(JP) JAPAN FEB BANK LENDING EX-TRUSTS Y/Y: 0.8% V 0.7% PRIOR; INCLUDING TRUSTS Y/Y: 0.6% V 0.6% PRIOR
(NZ) NEW ZEALAND Q4 MANUFACTURING ACTIVITY: 1.2% V 0.2% PRIOR; MANUFACTURING ACTIVITY VOLUME: 1.3% V -1.7% PRIOR
(ID) INDONESIA FEB FOREIGN EXCHANGE RESERVES: $112.2B
(JP) Japan investors bought ¥276B in foreign bonds last week v ¥1.4T bought in prior week
Markets Snapshot (as of 05:30GMT)
Nikkei225 +1.6%
S&P/ASX +0.7%
Kospi +1.0%
Taiwan Taiex +1.0%
Singapore Straits Times +1.3%
Shanghai Composite +1.1%
Hang Seng +0.9%
S&P Futures +0.1% at 1,354
April gold +0.2% at $1,687/oz
April Crude +0.2% at $106.42
Overview/Top Headlines
Markets were significantly higher today with Greece moving closer to a debt swap; As of late Wednesday, 52% of €206B of bonds up for restructuring pledged for a swap. Banks in Portugal and UK said to be the latest bondholders to support commitment to a debt swap. Greece pension fund holding €19B also said to be in support of the swap. Was a busy day in Asia starting off the New Zealand rate decision. The RBNZ held rates as expected citing the strong NZ$ reducing the need for future rate hikes. However the RBNZ is worried that the strong currency is stemming growth and is inhibiting rebalancing. NZD/USD fell below $0.8160, about 30 pips on the news. RBNZ Gov Bollard said that a 2.5% OCR could stay in place for much of 2012; Inflation appears to be in a sweet spot; NZD is above fair value under most models. Next was data out of Japan.
Japan Q4 final GDP came in as expected q/q at -0.2%, while nominal and annualized GDP both came in a bit weaker than expected. Private consumption was a tick higher than the preliminary reading at 0.4% and corporate capex came in much higher than its preliminary reading at 4.8% v 1.9% prelim. Japan Govt Official said that negative factors continue for Japan's economy; Remains in a mild recovery overall. Then Japan released its January current account data, adjusted current account hit a multi-year low at ¥115.6B, nearly half of the expected level. Japan trade deficit was the largest on record at -¥1.38T.
USD/JPY rose to ¥81.39 in the session. The key data from Australia was February unemployment numbers. A reading of 5.2% was the first increase in 3-months, but even more of a surprise was the employment change of -15,400, when an increase of 5,000 was expected. This was the 3rd month of decline out of the past 4 months. There was no change in full time employment and part time lost 15,400 jobs. Australia Jobs Min Shorten said that unemployment could rise in the coming months; Australia's economic fundamentals are sound. This certainly adds more fuel to a future rate cut from the RBA. AUD/USD shrugged off the data and rose 0.3% heading into the European open testing $1.0610.
Bank of Korea left interest rates unchanged, the won gained over 0.5% in the session testing KRW1,117. S&P commented on the impact of China slowdown on Australia, saying that the extent of the impacts rests on the severity of the deceleration in China. We envisage China is likely to encounter a soft landing of 8% GDP growth in 2012. But there is also a one-in-four chance of a medium landing with 7% GDP growth occurring, and a one-in-ten chance of a hard landing with 5% GDP growth materializing. Commodities were mixed, silver fell, copper gained both stateside and on the LME.
Speakers/Geopolitical/In the press
(JP) Japan lower house will approve the ¥99.33T draft budget for FY12 today; Opposition parties expected to protest the move, which will make it hard for the Diet to pass before start of new FY12 on April 1st - Nikkei
(CN) China Finance Ministry: A lower budget deficit doesn't mean fiscal policy is less attractive; Projecting a budget deficit of CNY800B this year v CNY850B in 2011
(CN) China's top 4 banks may have seen a fall in lending in early March - Chinese press
(CN) China Development Bank (CDB) is said to be planning to extend CNY-denominated loans to certain BRIC nations - FT
Equities
VAH.AU: Etihad CEO Hogan is still interested in a stake in Virgin Australia - The Australian
Cheung Kong Infrastructure, 1038.HK: Reports FY11 Net HK$7.75B v HK$7.7Be
8411.JP: Mizuho Corporate Bank cut long-term prime lending rate to 1.35% from 1.4% - Japanese Press
TSM: CEO: Market expects capacity utilization to reach 95% in Q2; 20nm and 28nm processes are progressing well - DigiTimes
8031.JP: Mitsui and Sumitomo announce plans to integrate their domestic fertilizer operations
WBC.AU: CEO Kelly: Home owners should prepare for lenders to raise mortgage rates given that funding costs for banks remains high and new regulations are forcing banks to withhold more capital - Australian Financial Review
McDonald's Holdings, 2702.JP: To hire 30K part time workers starting in mid-April due to personnel shortage amid rising sales in Japan - Nikkei News