No signs of turmoil in N. Korea gives the markets a boost; RBA says Australia's rate cut was a pre-emptive move
Economic Data
(AU) AUSTRALIA DEC MONETARY POLICY RBA MEETING MINUTES: SOME FACTORS SUGGESTED THAT THERE WAS NO STRONG NEED FOR A RATE CUT
(AU) AUSTRALIA OCT CONFERENCE BOARD LEADING INDEX: 0.6% V 0.6% PRIOR (second consecutive increase)
(JP) JAPAN OCT FINAL LEADING INDEX CI: 91.5 V 91.5 PRELIM; COINCIDENT INDEX CI: 90.3 V 90.3 PRELIM
(JP) JAPAN OCT ALL INDUSTRY ACTIVITY INDEX Y/Y: +0.8% V 1.0%E
(UK) UK NOV NATIONWIDE CONSUMER CONFIDENCE: 40 V 36E (first increase in 6-months)
(CO) COLOMBIA OCT INDUSTRIAL PRODUCTION Y/Y: 5.0% V 4.1%E; RETAIL SALES Y/Y: 6.1% V 7.6%E
Markets Snapshot (as of 05:15GMT)
Nikkei225 +0.5%
S&P/ASX -0.2%
Kospi +0.9%
Taiwan Taiex +0.2%
Singapore Straits Times flat
Shanghai Composite +0.1%
Hang Seng +0.5%
S&P Futures +0.5% at 1,203
Feb Gold +0.2% at $1,599/oz
March Crude +0.5% at $94.53
Overview/Top Headlines
Asian markets had a more positive day with no signs of turmoil in North Korea showing yet. Markets were cautious, staying in small ranges and ASX, Shanghai and Straits Times all swung between profit and loss. In the US session EU govts said they would lend €150B to IMF. Heading into the US close a report came out that EU Fin Mins had failed to agree on raising ESM/EFSF €500B joint ceiling.
Shares of Taiwan's HTC rose over 5% on a partial win in the Apple patent dispute and the announced share buyback program. Shares of Gloucester and Yanzhou were placed into a trading halt. Australian press reported that China's Yancoal Australia has proposed an A$8.0B merger with Gloucester.
Japan Cabinet approved ¥2.53T 4th extra budget which will not rely on bond issuance to fund. Part of budget provisions to boost Japan's capacity for currency market intervention to ¥195T. According to the Japan Auto Lobby head the Govt tax incentives in the 4th extra budget will increase auto sales by 900K which were expected to slump due to all the natural disasters.
Japan Fin Min Azumi announced that Japan and China are in talks about the purchase of yuan debt; both sides would benefit from the deal. Did say talks were early and no decisions have been made on debt purchase, would help to strengthen ties between the two countries. Affirmed Japan's trust in US Treasuries is unchanged.
Australia Treasurer Swan noted that Australia's tight budget settings give the RBA scope to cut rates if needed. In the RBA December meeting minutes the RBA said some factors suggested that there was not a strong need for a rate cut but the mining boom, domestic economic growth levels and solid growth in trading partners meant no strong need to cut interests rates. AUD/USD gained 10 pips on the minutes above $0.9920.
Speakers/Geopolitical/In the press
(CH) China Wukan local govt will compensate for land seizures that sparked large riots - China Daily
(US) US Sec of State Clinton has urged the EU to drop plans to charge airlines flying into the EU with a carbon tax or the US will be "compelled to take appropriate action" - FT
USD/KRW: (KS) South Korea Fin Min Bahk: To take measures against excessive KRW volatility
(CH) China may set its 2012 CPI target at 4.0%, in line with 2011 level - Chinese press
Equities
SNE: PlayStation Vita device said to have sold about 321K units in the first two days since debut - financial press
CHL: Reports NOV mobile subscribers 644.2M v 638.9M prior
448.HK: Li & Fung offers HK$2.7B for Hang Ten, HK$2.70/shr
JFE, 5411.JP: Guides Q3 crude steel output at 6.7M tons; Q4 output expected to be flat to slightly down
LMT: Japan Govt selects LMT's F-35 Lightning as its new fighter jet; implied value of the 42 jets is approx $4.8B
RHT: Reports Q3 $0.28 (adj) v $0.26e, R$290M v $290Me; Guides Q4 $0.26-0.27 v $0.26e, R$289-292M v $293Me; Raises FY12 (current FY) guidance - conf call; -8.9% after hours