EU Debt Returns Ahead Of Spain Auctions Later This Week; Markets Weaker After Yuan Trading Band IncreasedEconomic Data
(NZ) NEW ZEALAND MAR PERFORMANCE SERVICES INDEX: 53.9 V 55.8 PRIOR
(KR) SOUTH KOREA MAR EXPORT PRICE INDEX M/M: 0.5% V -0.6% PRIOR; Y/Y: 0.0% V 2.1% PRIOR; IMPORT PRICE INDEX M/M: 1.7% V 0.5% PRIOR; Y/Y: 3.5% V 5.2% PRIOR
(UK) UK APR RIGHTMOVE HOUSE PRICE M/M: 2.9% V 1.6% PRIOR; Y/Y: 3.4% V 2.2% PRIOR
(NZ) NEW ZEALAND MAR FOOD PRICES M/M: -1.0% V 0.6% PRIOR
(IS) Israel Mar Consumer Prices m/m: 0.4% v 0.2%e; y/y: 1.9% v 1.7%e
(NZ) New Zealand Feb REINZ house Price Index m/m: 1.9% v 0.8% prior; House Sales (turnover) y/y: 25.3% v 37.0% prior
Markets Snapshot (as of 04:30GMT)
Nikkei225 -1.3%
S&P/ASX -0.4%
Kospi -0.9%
Taiwan Taiex -0.7%
Singapore Straits Times unchanged
Shanghai Composite -0.2%
Hang Seng -0.7%
S&P Futures -0.2% at 1,362
June gold -0.6% at $1,650/oz
May Crude -0.6% at $102.21
Overview/Top Headlines
Asian markets were weaker after PBoC announced that it was widening the trading band of the yuan from 0.5% to 1.0% on Friday, the first increase since May 2007. USD/CNY climbed to a 3-month high on continued growth concerns about China and fresh European debt anxieties with Spain returning to front and center. This was a prime time to widen the band since there has not been as much pressure to do so recently and speculators are unlikely to flood the currency with growth concerns.
EUR/USD fell to session lows of $1.3009 as Spain prepares for a bill and bond auction later this week. Spain bond yields have continued to widen and over the weekend Spain Deputy Trade Minister Garcia-Legaz said that Spain would be "dead" without ECB funding, restricting ECB policy would be a mistake and called on the ECB to do more. ECB's Nowotny said to the German press that the upcoming Greek elections could result in a majority that will not continue with the current program, putting the debt crisis back in risk.
Additional pressure was put on Asia when the Bank of Korea (BoK) cut 2012 GDP forecast to 3.5% from 3.7% seen in December. Cuts in 2012 CPI forecast to 3.2% from 3.3% in December. Talk continues over increasing IMF funding, Japan Finance Minister Azumi said that Japan had not decided to contribute $60B to the IMF and that talks were ongoing.
ECB's Asmussen indicated he thought that Europe had done enough for the firewall and that non-EU countries should contribute to boost IMF funding. France Presidential candidate Hollande continues extend his lead over current President Sarkozy, over the weekend Sarkozy said that the ECB needs to do more and adopt policies that will support growth.
Speakers/Geopolitical/In the press
(CN) Shanghai new home sales w/w: +42% v -52.3% prior; new home prices -3.7% v +3.9% prior. - UWIN
IMF is hoping to be able to announce firm commitments after meetings in Washington. Some emerging markets are calling for increased voting rights in exchange for more money. - CNBC
(CN) China's National Development and Reform Commission has asked several industries to not raise prices for the next 2-months in order to help keep inflation under control. - Financial Press
(CN) China Securities Regulatory Commission (CSRC): Lowers risk capital reserve requirements for brokerages.
(JP) According to the latest Asahi opinion poll Japan PM Noda's approval rating has fallen to 25%.
(NZ) New Zealand PM Key reiterates that NZ Govt will retain 51% of stake in assets being sold and will not do anything "tricky" over the sale of non-voting shares in the assets. - Dominion Post
Equities
ICBC, 1398.HK: Goldman selling $2.5B stake in the company for HK$5.05/shr (3.1% discount to Friday close). Singapore's Temasek to buy 3.55N shares increasing stake to 5.3%.
LNC.AU: Signs commercial terms deed with China's GCL for commercializing gas. GCL takes a private placement in Linc.
TM: Will start layoffs of 350 workers (approx 12% of workforce) at its Altona, Australia plant today; Blamed on lower exports due to strong AUD. - Australian Press
GXY.AU: Exec: Will keep the option to IPO in Hong Kong open despite poor market conditions - SCMP
TLS.AU: Expected to announce additional layoffs at its Sensis directories business as part of turnaround plan for the unit. No final decision will be made until talks with unions and employees. - Australian Financial Review
BHP: KKR is considering acquiring the diamond unit from BHP and Rio Tinto to form 1 large company from the combined units. - Times
US Equities
CG: Expected to announces offering 30.5M common shares in IPO priced $23-25/shr. - Financial Press