Markets Cautious Ahead Of Greek ElectionsEconomic Data
(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE RANGE UNCHANGED BETWEEN 0.0% TO 0.10% (AS EXPECTED); KEEPS ASSET PURCHASE PROGRAM UNCHANGED AT ¥70.0T; UPGRADES ECONOMIC ASSESSMENT
(KR) SOUTH KOREA MAY EXPORT PRICE INDEX M/M: -0.3% V 0.6% PRIOR; Y/Y: 3.2% V 2.0% PRIOR; IMPORT PRICE INDEX M/M: -1.9% V -1.0% PRIOR; Y/Y: 2.1% V 1.7% PRIOR
(NZ) NEW ZEALAND MAY BUSINESS NZ PMI: 55.7 V 48.2 PRIOR (3-month high)
(CL) CHILE CENTRAL BANK LEAVES OVERNIGHT RATE UNCHANGED AT 5.00%; AS EXPECTED
(SG) SINGAPORE APR RETAIL SALES M/M: -0.9% V +1.6%E; Y/Y: 2.2% V 6.9%E; RETAIL SALES EX AUTO Y/Y: 2.9% V 4.2%E
(NZ) NEW ZEALAND MAY NON RESIDENT BOND HOLDINGS: 61.7% V 62.1% PRIOR
(SG) SINGAPORE Q1 FINAL UNEMPLOYMENT RATE: 2.1% V 2.1% PRELIM
(NZ) NEW ZEALAND JUN ANZ CONSUMER CONFIDENCE INDEX: 105.8 V 113.9 PRIOR (14-month low)
(PH) PHILIPPINES APR UNEMPLOYMENT RATE: 6.9% V 7.2% PRIOR
Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.2%
S&P/ASX +0.4%
Kospi -0.5%
Taiwan's Taiex +1.0%
Singapore Straits Times Index +0.5%
Shanghai Composite +0.2%
Hang Seng +1.3%
Sept S&P Futures +0.1% at 1,328
Aug gold +0.4% at $1,626/oz
July Crude oil +0.9% at $84.68/brl
Overview/Top Headlines
Markets were taken higher, though overall trading remained thin on event risk heading into the weekend. Egan Jones cuts France sovereign rating two notches to BBB+ from A. The G20 said to indicate that central banks are preparing for coordinated action to provide liquidity if necessary after the Greece elections on Sunday. There is also a possibility of an emergency meeting for G7 finance ministers on Monday or Tuesday. If there is market turmoil, a likely first line of defense would be a statement that officials were ready to take whatever steps were necessary to stabilize markets.
EUR/USD rose above $1.2645, this also took AUD/USD back above parity testing to a session high above $1.0030, NZD reached a 1-month high. Markets were also boosted when UK officials indicated fresh programs to support the economy. Fin Min Osborne said the government and BOE will attempt to counter any tightening in financial conditions or higher funding costs, the size of the scheme is said to be £80B over 4-years. UK BoE Governor King said the case for more easing is growing. Conditions have deteriorated since May.
China Academy of Social Sciences (CASS) said the PBoC could cut the RRR to increase liquidity. Called on China to increase imports and yuan flexibility, and offset the need to maintain high bank reserves to counteract pressure from vast foreign reserves. USD/JPY fell to ¥78.80 as the Bank of Japan left rates on hold and announced no new easing measures, however the BoJ did raise its economic assessment. Japan Finance Minister Azumi called the recent yen moves one-sided and declined to comment on G20 coordinated activity. Former MoF official Sakakibara ("Mr Yen") now sees UDS/JPY in 75 - 80 range, may rise above 75 is euro crisis flares up.
With some return of risk appetite copper and silver rose in the session over 0.5% to $3.37 and $28.62, corn and wheat were weaker. Markets expected to remain cautious heading into Greece's elections. The most recent polls show neither party in Greece is likely to gain enough votes to secure a parliamentary majority.
Speakers/Geopolitical/In The Press
(KR) South Korea Finance Min Bahk: Domestic inflation is easing, policy will focus on boosting growth in H2.
(CN) PBoC denies press speculation that it allowed commercial banks to discount up to 30% on lending rates for first-time buyers. - Chinese press
(NZ) New Zealand Fin Min English: Does not want to see central banks overdo buying; sees the NZD going above $0.80
(CN) Commerce Ministry (MOFCOM) researcher Wei Jianguo: May foreign direct investment (FDI) likely to be weak due to slowdown in global economic growth and eurozone uncertainty. - China press
(VN) Vietnam Deputy PM Nguyen: H1 GDP at 4.3% v 5.6% y/y; Targeting 2012 credit growth of +12-13% y/y v +15-17% guided prior.
(JP) Japan ruling DPJ and opposition LDP reach consensus on revisions to tax and social security reform bills. - Nikkei News
Equities
Sharp, 6753.JP: Considering setting up a holding company with Hon Hai Precision Industry to oversee its LCD TV business operations. - Japan press
China Steel , 2002.TW: Chairman: Guides Q2 net loss v loss NTD 712M in Q1; Expects to make a profit in Q3.
000660.KR: Woori has sold its entire 1.4% stake in Hynix for KRW 220B.
CWK.AU: Offer from Whitehaven was increased to AUD 145.6M from AUD 142M, new offer added value of AUD 0.025/shr
EGP.AU: Selling shares at AUD 3.30/shr under entitlement offer; Looking to raise AUD 54M (15% of market cap); Shareholder Crown to take up full offer.
MYR.AU: CEO Brookes: Affirms FY Net profit -15% y/y; Current economic conditions are a "tale of woe" and the worst I've ever seen. - SMH