Economic Data
(AU) AUSTRALIA MAY TRADE BALANCE (A$): -285M V -500ME; Exports y/y: +2.0% v +3.0% prior; Imports y/y: +3.0% v -1.0% prior
(ID) INDONESIA JUN FOREIGN RESERVES: $106.5B V $111.5B PRIOR
(HK) HONG KONG JUN PMI: 49.8 V 49.4 PRIOR
(JP) JAPAN JUN TOKYO AVERAGE OFFICE VACANCIES Y/Y: 9.4% V 9.4% PRIOR
(PH) PHILIPPINES JUN CONSUMER PRICE INDEX (CPI) M/M: 0.5% V 0.4%E; Y/Y: 2.8% V 2.8%E; CORE CPI Y/Y: 3.7% V 3.5%E
(TW) TAIWAN JUN CPI Y/Y: 1.8% V 1.8%E; WPI Y/Y: -1.7% V -0.4%E
(JP) Japan investors bought ¥1.34T in foreign bonds last week vs ¥870B bought in prior week; Foreign investors sold ¥50.0B in Japan stocks last week vs ¥50B bought prior
Markets Snapshot (as of 04:30GMT)
Nikkei225 -0.3%
S&P/ASX -0.3%
Kospi -0.1%
Taiwan's Taiex -0.5%
Singapore Straits Times unchanged
Shanghai Composite -1.2%
Hang Seng -0.3%
Sept S&P -0.3%
Aug gold -0.3% at $1,616/oz
Aug Crude oil -0.6% at $87.10/brl
Overview/Top Headlines
Asian markets were slightly weaker ahead of ECB and BoE interest rate decisions (ECB expected to cut and BoE expected to step up bond purchases) and lack of fresh stimulus from US markets, which were closed for the Independence Day holiday. Markets will also remain cautious ahead of Friday's US nonfarm payrolls report. Chinese press continues to speculate on a RRR cut. New reports today indicate the PBoC may consider removing lending caps in the wake of weaker yuan loans. Australia Treasurer Swan shared his enthusiasm ahead of a meeting with China next week.
Parties to discuss allowing Australia to directly convert its currency to yuan. With China Australia's largest trading partner this could impact trade favorably. Some analysts expect that as much as 10% of trade could take advantage. Australia's May trade deficit came in lower than expected at AUD 285M, exports to China hit a fresh all time high at AUD 7.3B, gold and crude oil exports rose while iron ore and coal fell.
Currencies also went into their holding pattern with EUR/USD holding around $1.2530, after some weakness in its Wednesday session and the yen remained little changed for another session around ¥79.90. The Philippine peso was stronger after the country got its long awaited sovereign rating upgrade from S&P.
Speakers/Geopolitical/In The Press
(CN) Most foreign banks in China have raised deposit rates to the limit at 3.58%. - Chinese press
(NZ) New Zealand PM Keys: Reiterates country will return to budget surplus by 2014-15.
(KR) South Korea Fin Min Bahk: Inflation is showing signs of easing with the exception of oil and agricultural goods.
(PH) Philippine Central Bank Gov Tetangco: June CPI supports a manageable inflation outlook, will take action to meet inflation targets.
(JP) Bank of Japan (BoJ) Gov Shirakawa: Reiterates Japan's economy has started to pick up moderately and will resume moderate recovery path; BoJ pursuing powerful monetary easing.
Equities
8697.JP: Japan FTC approves merger with Tokyo Stock Exchange, merger expected to be completed by Jan 1st.
XTA.UK: Australian Competition and Consumer Commission (ACCC) will not oppose Glencore's merger with Xstrata.
FLT.AU: Guides FY12 Pre-tax profit AUD 285-290M , top end of previous guidance.
China Vanke, 200002.CN: Reports Jun sales +8.5% y/y; Prices lower. - Chinese press
VAH.AU: Carried more domestic passengers than Qantas in the 12-months to end of May for the first time. - Australian press
PAH3.DE: Volkswagen to acquire remaining stake for €4.46B; Consolidation will have a positive impact on profit with noncash effect of €9.0B.