Asian Market Update: May 9, 2012

(JP) JAPAN APR OFFICIAL RESERVE ASSETS: $1.29T V $1.28T PRIOR (first increase in 3-months)

(UK) UK APR BRC SALES LIKE-FOR-LIKE Y/Y: -3.3% V 0.6%E

(KR) SOUTH KOREA APR BANK LENDING TO HOUSEHOLDS (KRW): 453.6T V 452.3T PRIOR

(KR) SOUTH KOREA MAR MONEY SUPPLY L Y/Y: 1.8% V 0.3% PRIOR; M2 Y/Y: 0.0% V 0.7% PRIOR

(CO) Colombia Apr Producer Price Index M/M: +0.2% v -0.2% prior; Y/Y: +1.6% v +1.6% prior

Markets Snapshot (as of 04:30GMT)

Nikkei225 -1.6%

S&P/ASX -1.1%

Kospi -1.0%

Taiwan Taiex -0.8%

Singapore Straits Times Index -0.7%

Shanghai Composite -1.3%

Hang Seng -1.0%

Jun S&P Futures -0.1% at 1,352

June gold -0.8% at $1,591/oz

June Crude -0.5% at $96.53

Overview/Top Headlines

Concerns over Greece backing out of its bailout package continue to weigh on the markets, as a coalition has yet to be formed after Sunday elections. EUR/USD traded around $1.2970, rising as high as $1.3006. Financial press was reporting that Spain government is planning to require banks to set aside additional €25-40B in provisions; with the announcement expected on Friday. AUD/USD fell to December 2010 lows around $1.0094 after Australia's government said it would cut spending and return the budget to surplus.

Analysts were calling for a weaker day in the markets as most expected the Fed govt to announce a 1% cut in the corporate tax rate. BHP and Rio Tinto both lost well over 1.5% each. Australia Opposition Lawmaker Barnaby Joyce said he is worried about Australia's debt ceiling and that the Government should not raise it further. Reminder in early April the country was close to breaching its AUD 250B debt ceiling less than a year after raising it to the new cap due to a larger than expected deficit. Aussie 10-yr yields fell to record lows. The US dollar benefitted from risk aversion gaining against the won, Singapore dollar and Taiwanese dollar in addition to the majors. USD/JPY however was down most of the session testing ¥79.73. Silver and copper again fell in the Asian trading session while corn and wheat gained.

Looking ahead to the rest of the week we have a Bank of Korea rate decision as well as monthly China data starting with the trade balance. Japan should also wrap up the bulk of its earnings this week.

Speakers/Geopolitical/In The Press

(NZ) New Zealand RBNZ Financial Stability Report: Falling prices are curbing primary sector earnings; High NZD making it hard to rebalance.

(CN) China regulator deputy chief Xinyi: Will loosen control over the stock market as much as possible and continue to push to open the sector. - Chinese press

(AU) Australia PM Gillard: AUD is a safe haven currency, economy is returning to trend growth.

(CN) China Fin Min Xie: The external environment is still complex in 2012; China is still facing challenges.

Equities

Softbank, 9984.JP: Entered 50/50 JV with PayPal, both parties investing ¥1.0B.

CRF.AU: Agrees to A$200M settlement in class action lawsuit.

China Construction Bank, 939.HK: Exec: Expecting double digit profit growth this year but slower than last year. - HK press

Nippon Meat Packers, 2282.JP: Look to increase capital outlays to ¥100B under a 3-yr business plan starting FY12/13 (+40% from last 3-year plan). - Nikkei

CBA.AU: Cutting variable rate on one and 3 year mortgage loans by 34bps. - Australian press

US Equities

DIS: Reports Q2 $0.58 (adj) v $0.55e, R$9.63B v $9.6Be, +1.7% after hours

KGC: Reports Q1 $0.18 (adj) v $0.20e, R$1.04B v $1.1Be; +0.3% after hours

EOG: Reports Q1 $1.20 v $1.16e, R$2.81B v $2.4Be; -1.6% after hours

CQB: Reports Q1 $0.04 (unclear if comparable) v $0.32e, R$793M v $768Me; -10.2% after hours