Economic Data
(CN) CHINA AUGUST TRADE BALANCE: $26.7B v $19.5BE; Imports y/y: -2.6% v +3.5%e (first contraction since January); Exports y/y: 2.7% v 2.9%e
(CN) CHINA AUGUST PRODUCER PRICE INDEX (PPI) Y/Y: -3.5% V -3.2%E (BIGGEST DECLINE SINCE OCT 2009)
(CN) CHINA AUGUST CONSUMER PRICE INDEX (CPI) Y/Y: 2.0% V 2.0%E (first YoY rise in 5 months)
(CN) CHINA AUGUST RETAIL SALES Y/Y: 13.2% V 13.2%E (FIRST RISE IN 5 MONTHS)
(CN) CHINA AUGUST INDUSTRIAL PRODUCTION Y/Y: 8.9% V 9.0%E (39-MONTH LOW)
(CN) CHINA AUGUST YTD URBAN FIXED ASSETS Y/Y: 20.2%V 20.4%E (3-month low)
(AU) AUSTRALIA JULY HOME LOANS M/M: -1.0% V 0.0%E (biggest decline in 5 months); INVESTMENT LENDING: -2.7% V +4.9% PRIOR; OWNER-OCCUPIED HOME LOAN VALUE: -1.4% V +1.2% PRIOR
(JP) JAPAN Q2 FINAL GDP Q/Q: 0.2% V 0.3%E; ANNUALIZED: 0.7% V 1.0%E; NOMINAL GDP: Q/Q -0.3% V -0.2%E; GDP DEFLATOR: % V -1.1%E
(JP) JAPAN JULY CURRENT ACCOUNT TOTAL: ¥625B V ¥486BE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥335B V ¥389BE; TRADE BALANCE - BOP BASIS: -¥374B V -¥439BE
(JP) JAPAN AUGUST BANK LENDING EX-TRUSTS: 1.1% V 1.1%E; BANK LENDING INCLUDING TRUSTS: 0.9% V 0.7% PRIOR
(NZ) NEW ZEALAND Q2 MANUFACTURING ACTIVITY VOLUME Q/Q: 0.3% V 1.2% PRIOR; MANUFACTURING ACTIVITY Q/Q: -1.1% V -1.5% PRIOR (2nd consecutive quarter of contraction)
(KR) SOUTH KOREA AUGUST PRODUCER PRICE INDEX (PPI) Y/Y: +0.3% V -0.1% PRIOR
(UK) UK AUGUST LLOYDS EMPLOYMENT CONFIDENCE INDEX: -43 V -51 PRIOR
Markets Snapshot (as of 04:00GMT)
Nikkei225 -0.3%
S&P/ASX +0.4%
Kospi flat
Shanghai Composite +0.4%
Hang Seng +0.2%
Septmber S&P500 -0.4% at 1,433
December gold flat at $1,741/oz
October crude oil -0.2% at $96.27/brl
Overview/Top Headlines
China
China released the bulk of its monthly economic data for August over the weekend, sending investors on a chase to extrapolate and update mainland growth projections and expectations for the PBoC. CPI bounced from its two and a half year lows to 2.0% from 1.8% in July. This also marked the first y/y increase in 5 months, and although much of the increase may have been the result of higher food costs, analysts indicated the apparent bottom in consumer prices would push back the timing on any future policy easing.
On the flip side, slowing industrial production and deteriorating imports component of the trade data reminded markets that the overall slowdown is not over, potentially demanding fresh fiscal support. Nomura lowered China 2012 GDP target from 8.2% to 8.1%, JPMorgan also cut 2012 GDP by a decimal to 7.6%, while IHS Global Insight suggested the data pushes back any easing. Separately, PBoC Deputy Director Guo was quoted in the local press noting the central bank will widen CNY trading ban again in the future.
Japan
Japan released its final Q2 GDP data that showed a slightly lower expansion. Annualized GDP came in at just 0.7% vs 1.0% consensus and 1.4% preliminary estimate. Private consumption component remained unchanged with a minimal growth of 0.1%, while exports were up 1.2%. Nikkei225 index underperformed, hurt the by stronger JPY against the dollar following worse than expected nonfarm payrolls data on Friday.
PM Noda unveiled DPJ Policy Plan pledging to end deflation and achieve 1% CPI target within a year. On the other side of the aisle, current LDP leader said he would stand down in the party elections, presumably paving the way to the party favorite Secy Gen Ishihara.
South Korea
South Korea Finance Minister Bahk announced a new front-loaded fiscal stimulus package of KRW5.9T ($5.2B) for 2012-13. The measures were said to include tax cuts to generate more domestic consumption as well as specific incentives for auto purchases.
Equities
TM: Exec: Deliveries in China may double to 1.8M vehicles by 2015; China sales may reach 15% of global volume - China Daily
BHP: Will cease all operations at Gregory Open cut metallurgical coal mine, effective Oct 10th because it was no longer profitable
BP: Said to be close to selling some of the offshore Gulf assets to Plains Exploration in a deal estimated at $7B
TSM: Targets $10B capex for 2013, +25% y/y - Taiwan press
MT: United Steelworkers union and ArcelorMittal reach a tentative 3-year deal - US financial press
AIG: AIG Announces U.S. Department of the Treasury Launch of Offering to Sell $18B in AIG Common Stock (about 30% of market cap)
Europe
(FR) France President Hollande: 2012 GDP to be barely above 0%; Lowers 2013 GDP target to around 0.8% from 1.2%; Pledges about €30B in new taxes and savings to shore up France budget.
(GR) Over 12K protesters marched in Greece this weekend on expectation the government will agree to more austerity measures to secure the next bailout tranche
(GR) Greece government official: Talks between Greek govt and troika inspectors have a long way to go; Troika said to object to about €2B in proposed Greek cuts
(GR) Greece Democratic Left's Kouvelis: Greeks cannot meet any more austerity, there is no final agreement on budget cuts; Coalition leaders to meet again on Wednesday
(GR) Greece PM Samaras: Top priority in Greece is to win a favorable assessment from troika inspectors to assure release of €31.5B loan tranche - financial press
(EU) European Commission said to be anticipating an ESM bailout request from Spain in the coming weeks - German press
(EU) ECB may spend about €70-100B on bond purchases this year if interest rates on Spain and Italy govt bonds rise "sharply"
(EU) Germany CSU party member Peter Gauweiler has submitted a complaint with Germany's high court in opposition to recent ECB action
(EU) IMF chief Lagarde: IMF wants a role in design and monitoring of ECB's OMT; Sees Spain and Italy on the right track, their fiscal trajectories are "adequate in and of themselves" - financial press