Economic Data
(CN) CHINA AUG HSBC FLASH MANUFACTURING PMI: 47.8 V 49.3 FINAL (9-month low, 10th consecutive month of contraction)
(SG) SINGAPORE JULY CPI M/M: 0.2% V 0.6%E; Y/Y: 4.0% V 4.5%E
(KR) SOUTH KOREA Q2 HOUSEHOLD CREDIT Y/Y: 5.6% V +7.0% PRIOR (slowest growth since Q2 2009)
(CN) CHINA JULY CONFERENCE BOARD LEADING ECONOMIC INDEX M/M: 0.7% V 0.0% PRIOR
(PH) PHILIPPINES JULY BUDGET BALANCE (PHP): -39.2B V -11.7B PRIOR
(AU) Australia Q2 CBAHIA House Affordability q/q: 62.5 v 61.8 prior
(JP) Japan investors sold ¥835.8B in foreign bonds last week vs ¥170B bought in prior week; Foreign investors bought ¥89.5B in Japan stocks last week vs ¥68.1B sold prior
(CO) Colombia Jun Industrial Production y/y: 2.8% v 0.1%e; Retail Sales y/y: 4.0% v 1.5%e
Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.2%
S&P/ASX +0.2%
Kospi +0.2%
Shanghai Composite -0.2%
Hang Seng +0.9%
Taiwan Taiex -0.1%
Straits Times Index +0.6%
Sept S&P500 +0.3% at 1,416
Dec gold +1.4% at $1,664/oz
Oct Crude oil +0.8% at $98.03/brl
Overview/Top Headlines
Worse than expected China HSBC flash PMI for August sparked fresh chatter that the PBoC would have to cut the RRR. The sub-50 reading came in at a 9-month low of 47.8, this was also the 10th consecutive month of contraction. New export orders were also disappointing at 44.7, this was the lowest level since March 2009. Up until today heavy reverse repo operations have quelled most hopes of any sort of rate cut.
Markets across the region gain on the hope after a weaker start to the day despite hints from the FOMC of future easing, saying: "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial strengthening in the pace of the recovery." Crude was also higher and Brent contract tested $115.13 and USD/CAD fell 0.2% to C$0.9885 tracking oil
In Australia the earnings season marches onward, Fairfax Media fell over 9% after reporting a Net loss of A$2.7B, shares of Qantas rose over 3.5% despite reporting a net loss for FY12 due to plans to cut its fleet purchases with savings of billions of dollars. In Vietnam one of its major banks, ACB, has requested a fresh round of funding as depositors rush to take funds out.
The central bank has stepped in to assure it will cover its liabilities. Vietnam Communist Party vice Chair Hua warned of an impending housing bubble in the country as well, comparing the situation to the crisis in Thailand in 1997.
Fortescue Metals CEO directly addressed the recent focus on iron ore prices falling below $120/ton saying that he expects prices to rise back up to $120-160/ton in the near term. He also noted that Chinese domestic iron ore production is falling, seaborne imports are increasing. Australia Resource Min Ferguson said the resource boom is over, conditions have been getting more difficult for the last 6-12 months.
Corn prices continued to climb, as they continue to hover around 3 day highs, wheat was a bit softer to $8.94. Copper gained in the session while silver rose over 2%. Spot gold gained 0.9% to $1,663, front month contract also rose to $1,665, up over 1.5%, a 16-week high.
Speakers/Geopolitical/In The Press
(US) Fed Evans (FOMC alternate, dove): Payrolls data being better than expected is not enough; Reiterates QE3 would give confidence to the markets
(TW) Taiwan Govt: Sees 2013 budget NT$214.4B deficit, Spending NT$1.94T
(AU) Australia PM Gillard: BHP's decision to delay Olympic Dam project has nothing to do with carbon tax; will make prudent budget decisions
(CN) China Vice Premier Li Keqiang: China must guarantee fair distribution, effective supply and sustainable functioning of its affordable housing program, maintain property regulation policies, and continue to crack down on speculative property investment - Chinese press
(JP) Japan PM Noda has indicated he may dissolve the lower house in October - Japan press
(CN) PBoC denies reports that it has lost 80 tons of gold from reserves (estimated value about $4.2B) - Chinese press
(CN) China's ICBC and Agricultural banks have cut interest rates paid on USD and EUR denominated deposits effective today - financial press
Equities
FMG.AU: Reports FY12 Net profit $1.56B v $1.55Be; Rev $6.68B v $5.44B y/y
QAN.AU: Reports FY12 Net underlying pretax profit A$95M v A$66Me, Rev A$15.7B v A$14.9B y/y
ORG.AU: Reports FY12 Net A$980M v A$673M y/y, Rev A$12.94B v A$10.34B y/y
IAG.AU: Reports FY12 Net Profit A$207M v A$250M y/y, Rev A$11.5B v A$12.2B y/y
Sinopharm, 1099.HK: Reports H1 Net CNY959M v CNY165M y/y; Rev CNY66.6B v CNY7.2B y/y
US Equities
BBY: Talks between the Board and founder Schulze are still going on; Duration of due diligence said to be the primary area of disagreement - US press; +2.7% after hours
HAIN: Reports Q4 $0.47 v $0.45e, R$350.8M v $366Me; +10.6% after hours
HPQ: Reports Q3 $1.00 v $0.98e, R$29.67B v $30.1Be; -4.8% after hours