Focus Returns To Spain, Mixed Data Out Of Australia

(JP) JAPAN APR HOUSING STARTS Y/Y: 10.3% V 3.2%E; CONSTRUCTION ORDERS Y/Y: 16.2% V -0.3% PRIOR

(JP) JAPAN APR VEHICLE PRODUCTION Y/Y: 173.8% V 244.0% PRIOR

(NZ) NEW ZEALAND APR MONEY SUPPLY M3 Y/Y: 5.5% V 5.0% PRIOR

(PH) PHILIPPINES Q1 GDP Q/Q: 2.5% V 2.4%E; Y/Y: 6.4% V 4.3%E

(SG) SINGAPORE APR MONEY SUPPLY M1 Y/Y: 7.8% V 10.2% PRIOR; M2 Y/Y: 6.4% V 9.7% PRIOR

(SG) SINGAPORE APR CREDIT CARD BAD DEBTS (SGD): 18.0M V 17.7M PRIOR; CREDIT CARD BILLINGS: 2.97B V 3.2B PRIOR; BANK LOANS & ADVANCES Y/Y: 24.0% V 26.0% PRIOR

(AU) AUSTRALIA APR PRIVATE SECTOR CREDIT M/M: 0.4% V 0.3%E; Y/Y: 3.8% V 3.6%E

(AU) AUSTRALIA APR BUILDING APPROVALS M/M: -8.7% V +0.3%E; Y/Y: -24.1% V -13.8%E

(AU) AUSTRALIA Q1 PRIVATE CAPITAL EXPENDITURE Q/Q: 6.1% V 4.0%E

(JP) JAPAN APR LABOR CASH EARNINGS Y/Y: 0.8% V 1.1%E

(NZ) NEW ZEALAND MAY NBNZ CONFIDENCE: 27.1 V 35.8 PRIOR (4 month low and 1st m/m decline in 4 months); ACTIVITY OUTLOOK: 34.9 V 36.1 PRIOR

(JP) JAPAN APR PRELIMINARY INDUSTRIAL PRODUCTION M/M: 0.2% V 0.5%E; Y/Y: 13.4% V 13.7%E

(BR) BRAZIL CENTRAL BANK (COPOM) CUTS SELIC TARGET RATE BY 50BPS TO 8.50% (RECORD LOW); AS EXPECTED

(UK) UK MAY GFK CONSUMER CONFIDENCE SURVEY: -29 V -32E (3-month high)

(KR) SOUTH KOREA APR INDUSTRIAL PRODUCTION M/M: +0.9% V -0.4%E (3-month high); Y/Y: 0.0% V 0.7%E

(JP) Japan investors sell ¥411B in foreign bonds last week v ¥244B bought in prior week

Markets Snapshot (as of 05:00GMT)

Nikkei225 -1.6%

S&P/ASX -1.0%

Kospi -1.3%

Singapore Straits Times Index -0.6%

Shanghai Composite -0.5%

Hang Seng -1.2%

June S&P Futures -0.1% at 1,307

Aug gold -0.3% $1,561/oz

July Crude -0.3% at $87.55

Overview/Top Headlines

Asian markets again opened significantly lower as concerns continue to flare up over the health of Spain's banking system. Key 10-yr bond yields in Spain tested 6.65%, nearing the all-important 7.0% level that drove its' fellow EU countries into bailout requests. Spain did reiterate it would sell debt to bailout Bankia. EUR/USD hit a 1-year low towards the end of the NY session, however heading into the European open it was up 0.2% to $1.2385. USD/JPY fell 0.5% as the yen was subject to safe haven flows. Japan Finance Minister Azumi reiterated his concerns over excessive moves and that the decline in equities and sudden strength of the currency did not reflect economic fundamentals. EUR/JPY fell 0.3% to ¥97.53. Japan government debt also benefitted from the risk aversion with futures rising to their highest level since October 2010.

In Hong Kong the Hang Seng fell into negative territory YTD, for the first time in 2012. Australian insurance named were under pressure after Moody's announced a review for possible downgrade. Miners also fell after an Australia Treasury member warned that he expected investment into the mining sector to decline. Crude futures fell to a nearly a 7-month low, while copper lost 0.6% to $3.37. China State Council announced plans to support 7 new strategic industries including construction, nuclear, wind, and solar power, energy efficiency and environmental protection, next-generation information technology, biotechnology, high-end manufacturing and new materials. This sector focused stimulus for China will come through preferential policies, the Council also confirmed the start of subsidies which will have an impact on the auto industry. It should be noted that these areas were identified as key strategic priorities under 12th five-year plan from 2011 to 2015. This move shows that China is trying to use short-term stimulus efforts to serve its long-term development objectives, including efforts to restructure the economy and growth model.

Speakers/Geopolitical/In The Press

(AU) Westpac Expects that Australia's RBA will cut rates to 2.75% in the current cycle with a rate cut to 3.5% at June 5th meeting

(AU) Australia Treasury Sec Parkinson: Australia does not have much direct exposure to EU crisis; Still lots of scope for monetary policy

(EU) World Bank chief Zoellick: Need to see bigger response out of the euro zone such as the launch of euro bonds

(US) Fed's Rosengren: Monetary policy needs to focus on stimulating growth; Some accommodation is appropriate and necessary; Fed needs to lower unemployment faster

Equities

ICBC, 1398.HK: Exec: Credit risk is under control, non-performing loan risk is manageable

AGO.AU: Chairman: Sees iron ore floor price at $120/metric ton; Open to takeover bids, though no serious talks have happened

Graff Diamonds, 1306.HK: Will not go ahead with IPO due to market conditions

DJS.AU: Reports Q3 Rev A$399.8M, -2.9% y/y; SSS -3.1%; Affirms FY12 guidance for net profit -35-40%

China Overseas Land, 688.HK: Chairman Kong: The worst has yet to come for the property sector; Liquidity will remain tight for developers in H2 - HK press

US Equities

PRXL: Affirms Q4 $0.28-0.30 v $0.29e, R$376-381M v $378Me; Guides initial FY13 $1.31-1.47 v $1.38e, R$1.625-1.655B v $1.63Be

TIVO: Reports Q1 -$0.17 v -$0.15e, R$67.8M v $64Me; -1.8% after hours

LGF: Reports Q4 -$0.17 (incl items) v $0.18e, R$645M v $616Me; -6.6% after hours