Economic Data
(JP) JAPAN JUNE PRELIMINARY INDUSTRIAL PRODUCTION M/M: -0.1% V +1.5%E (3rd consecutive decline); Y/Y: -2.0% V -0.1%E
(JP) JAPAN JULY VEHICLE PRODUCTION Y/Y: 20.3% V 59.5% PRIOR
(NZ) NEW ZEALAND JUN BUILDING PERMITS M/M: 5.7% V 7.3%E (3-month high)
(AU) AUSTRALIA JUNE HIA NEW HOME SALES M/M: 2.8% V 0.7% PRIOR (3rd consecutive increase)
(KR) SOUTH KOREA AUG BUSINESS SURVEY MANUFACTURING: 70 V 81 PRIOR; NON MANUFACTURING: 69 V 76 PRIOR
(UK) UK JULY HOMETRACK HOUSING SURVEY M/M: -0.1% V 0.0% PRIOR; Y/Y: -0.5% V -0.5% PRIOR
(UK) UK JULY LLOYDS BUSINESS BAROMETER: -8 V -12 PRIOR
(CN) Shanghai new home sales -0.73% w/w; New home prices +2.42% w/w - UWIN
Markets Snapshot (as of 04:00GMT)
Nikkei225 +0.7%
S&P/ASX +0.9%
Kospi +0.9%
Shanghai Composite -0.1%
Hang Seng +1.6%
Sept S&P500 -0.2%
Aug gold +0.2% at $1,622/oz
Sept Crude oil +0.6% at $90.70/brl
Overview/Top Headlines
Asian equity markets are in rally mode to start the week, tracking two consecutive sessions of outsized gains on Wall Street. Risk on sentiment follows another press report on Friday suggesting Mario Draghi will meet with Bundesbank head Weidmann about the policy options available to the ECB, as traders see little reason to doubt European policymakers' resolve to employ larger artillery. German Fin Min Schaeuble warned that EMU bailout funds are not likely to be used towards purchases of Spanish debt over the weekend, but that sentiment was overshadowed by comments from German Chancellor Merkel suggesting that nothing is off the table following talks with Italy PM Monti. EU's Juncker also indicated he is prepared to work with the ECB to help lower sovereign borrowing costs. More details are still needed to determine to what extent German authorities have shifted their cautious stance, particularly as Germany still awaits the decision of its high court on the constitutionality of an ESM-like instrument. Meanwhile, the latest polls suggest a small majority of Germans now see themselves as better off outside the euro zone. EUR/USD fell back below $1.23 after peaking just below $1.24 on Friday, August gold retreated to $1,620, while S&P500 futures were down by around 0.3% for the duration of the Asian hours
Over in Japan, June preliminary industrial production surprisingly registered a third consecutive m/m decline, prompting Ministry of Economy, Trade and Industry (METI) to downgrade its assessment of industrial output to "flat" from "in recovering trend". Despite the weak data JPY remained bid, as USD/JPY fell over 20 pips to ¥78.35. In Australia, BHP is looking to postpone its decision on the expansion of A$30B Olympic Dam project by two years. Earlier this weekend, a BHP official said non essential spending may need to be reduced due to China slowdown that may be faster than expected. AUD came under slight pressure to start the week but found support at $1.0450. Sept Copper pared its gains after rising above $3.45.
Speakers/Geopolitical/In the press
China:
(CN) China Industrial Bank chief economist Lu Zhengwei: PBoC may further cut RRR in August to soften the decline in inflation; Inflation may fall to 1.7% from 2.2% - Chinese press
(CN) According to data from China Index Academy, July home sales across the mainland reached 6.5M sqm in 10 major cities, a 3-year high - SCMP
Japan:
(JP) According to Nikkei Inc poll, support for PM Noda fell to 28% in July vs 33% in June; Matches all-time low - Nikkei News
Greece:
(GR) German Economy Min Roesler: Still see significant doubts that Greece is measuring up to reform promises - German press
(GR) Greece Finance Ministry: Troika inspectors to remain in Greece until a credible fiscal reform program is established; Govt leaders agree on most of the measures demanded by creditors - financial press
Europe:
(DE) As many as 51% of Germans see domestic economy as better off outside EMU vs 29% who said it would be worse off - German press
(EU) EU's Juncker: Prepared to reactivate the bailout fund; EFSF will work with the ECB to lower borrowing costs - financial press
(EU) According to a Morgan Stanley study, cross border lending by German banks to euro zone periphery states fell by nearly 20% since Jan to lowest level since 2005 - FT
Equities
Hyundai Motor 005380.KR: To recall about 220K vehicles in US markets due to airbag flaws - Korean press
Fixed Income/Commodities/Forex
(AU) Newcastle Coal Exports in week ended July 30th, +10.9% v -0.4% prior (first rise in 4 weeks)
(NZ) New Zealand govt looking to accelerate approval of large mining projects - NZ press