China Manufacturing PMI Contracts, Markets Rally On PBoC Action

(CN) CHINA AUG PMI MANUFACTURING: 49.2 V 50.0E

(NZ) NEW ZEALAND Q2 TERMS OF TRADE INDEX Q/Q: -2.6% V -2.0%E

(KR) SOUTH KOREA AUG CONSUMER PRICE INDEX M/M: 0.4% V 0.5%E; Y/Y: 1.2% V 1.4%E; CORE CONSUMER PRICE INDEX Y/Y: 1.3% V 1.2% PRIOR

(UK) UK AUG LLOYD'S BUSINESS BAROMETER: +10 V -8 PRIOR

(AU) AUSTRALIA AUG AIG PERFORMANCE OF MANUFACTURING INDEX: 45.3 V 40.3 PRIOR

(JP) JAPAN Q2 CAPITAL SPENDING: 7.7% V 8.9%E (5-year high); CAPITAL SPENDING EXCLUDING SOFTWARE: 6.6% V 7.8%E

(KR) SOUTH KOREA AUG HSBC MANUFACTURING PMI: 47.5 V 47.2 PRIOR

(AU) Australia Aug RPData Rismark House PX Actual y/y: 0.0% v 0.6% prior

(AU) AUSTRALIA AUG TD SECURITIES INFLATION M/M: 0.6% V 0.2% PRIOR (17-month high); Y/Y: 2.2% V 1.5% PRIOR

(CN) CHINA AUG NON-MANUFACTURING PMI: 56.3 V 55.6 PRIOR

(AU) AUSTRALIA Q2 COMPANY OPERATING PROFIT Q/Q: -0.7% V +1.0%E; INVENTORIES Q/Q: 0.6% V 0.2%E

(AU) AUSTRALIA JUL RETAIL SALES M/M: -0.8% V +0.2%E

(AU) AUSTRALIA Q2 COMPANY OPERATING PROFIT Q/Q: -0.7% V +1.0%E (3rd consecutive quarter of contraction); INVENTORIES Q/Q: 0.6% V 0.2%E

(AU) AUSTRALIA AUG ANZ JOB ADVERTISEMENTS M/M: -2.3% V -0.8% PRIOR

(TW) TAIWAN AUG HSBC MANUFACTURING PMI: 46.1 V 47.5 PRIOR

(CN) CHINA AUG FINAL HSBC MANUFACTURING PMI: 47.6 V 49.3 PRIOR

(ID) INDONESIA AUG MARKIT MANUFACTURING PMI: 51.6 V 51.4 PRIOR

(ID) INDONESIA AUG INFLATION M/M: 1.0% V 0.8%E; Y/Y: 4.6% V 4.4%E; CORE INFLATION M/M: 4.2% V 4.0%E

(ID) INDONESIA JUL TOTAL TRADE BALANCE: -$180M V -$1.5BE

Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.2%

S&P/ASX +0.1%

Kospi +0.5%

Shanghai Composite +0.8%

Hang Seng +0.5%

Taiwan Taiex +0.8%

Straits Times Index +0.1%

Sept S&P500 -0.2% at 1,402

Dec gold +0.3% at $1,693/oz

Oct Crude oil -0.2% at $96.33/brl

Overview/Top Headlines
Asian markets turned positive on fresh hopes for easing after China Final HSBC Manufacturing PMI came in at 47.6, the lowest level since March 2009. This also supports the official manufacturing PMI reading for August that came out over the weekend, which saw the first contraction reading since November 2011 at 49.2, this was also a 9-month low. Brent crude lost a few cents after the data, though held above $114.50/bbl.

AUD/USD fell over 50 pips to $1.0240. Australia's miners were mostly weaker after the data as some large expansion projects continue to hang in limbo as China, Australia's largest trade partner and one of the largest investors into the resource sector, continues show signs of a slowdown. Moody's in a sovereign report on China saw that small net increase in local Govt debt in 2011 signals containment and that improvements strengthen credit worthiness. Moody's also noted that the GDP target of 7.5% shows China's commitment to a soft landing.

South Korea manufacturing PMI also remained in contraction territory, as exports continue to be heavily impacted by weaker overseas demand, in Taiwan manufacturing PMI contracted at a faster pace in August at 46.1. EUR/USD traded in a 20 pip range testing $1.2587, USD/JPY fell to ¥78.20, though also remained in a 20 pips range. Corn and wheat contracts fell over 1% after hurricane Isaac brought much needed rain. Copper and silver gained, with silver rising 1.4% to $31.86. The greenback was weaker against the won, peso, and Singapore dollar.

Speakers/Geopolitical/In The Press
(CN) China Premier Wen: The Eurasian continent is one of the most promising regions in the world in terms of consumption and investment - Shanghai Daily

(NZ) New Zealand Treasury: 2012 GDP will probably exceed the 2.2% forecast, sees Q2 GDP at 0.6%; economy has benefited from increased consumption and incomes

(HK) Hong Kong Financial Sec Tsang: Hong Kong is faced with higher risk of recession; economy appears to be slowing

Europe News
(IT) Moody's comments on Italy banks: Asset quality deteriorating due to rise in loan loss provisions

(FR) France Labour Min Sapin: French unemployment exceeds 3M; expects further rise - French press

(ES) Spain PM Rajoy: Spain cannot finance itself at current rates; needs higher taxes to restore standing - financial press

Equities
TTMT.IN: Reports Aug vehicle sales at 71.8k units +12% y/y

7269.JP: Maruti Suzuki unit reports Aug vehicle sales 54.1K units, -41% y/y

GLEN.UK: To be sticking to terms of the Xstrata offer - financial press

US Equities
GM: To halt production at two UK facilities for one week due to weak demand - British press

X: Reached a tentative agreement with union USW on 3-yr contract - financial press

(US) New York to investigate private equity firms regarding tax strategy - financial press

BLK: China Investment Corp (CIC) has sold most of its stake in BlackRock - FT