Asian Market Update: Equities Broadly Down

(SP) Spain Sept YTD Budget Balance: No est v -€30.9B prior

(IR) Ireland Sept Property Prices M/M: -1.5% v -1.6% prior; Y/Y: -14.3% v -13.9% prior

(US) ICSC/GS weekly chain store sales w/e Oct 22nd: -0.8 % w/w; +2.4% y/y

(HU) Hungary Central Bank leaves the Base Rate unchanged at 6.00%; as expected

(BR) Brazil Sept Current Account: -$2.2B v-$3.3Be; Foreign Direct Investment (FDI): $6.3B v $5.0Be

(CA) Canada Aug Retail Sales M/M: 0.5% v 0.3%e; Retail Sales Less Autos M/M: 0.4% v 0.3%e

(US) Redbook Retail Sales w/e Oct 22nd: +4.1% y/y; Oct MTD: -0.8% v Sept - 9:00 (BR) Brazil Sept Supermarket Sales

(CA) Bank of Canada (BOC) leaves rates unchanged at 1.00%; as expected

(US) S&P/CS 20 City M/M: -0.05% v +0.10%e; Y/Y: -3.80% v -3.50%e; Home Price Index: 142.84 v 142.62 prior

(MX) Mexico Sept Preliminary Trade Balance: -$1.8B v -$1.0Be

(BE) Belgium Oct Business Confidence:-10.4 v -10.0e

(US) Oct Consumer Confidence: 39.8 v 46.0e

(US) Aug House Price Index M/M: -0.1% v +0.2%e

(US) Oct Richmond Fed Manufacturing Index: -6 v 0e Flat)

(EU) ECB drained €169.5B vs €169.5B targeted in 6-day Term Deposit Facility

(UK) BOE purchased £1.7B in 2038-2060 Gilts in reverse auction; Bid-to-cover: 1.06x vs. 1.39x prior

More downplaying of the potential for results emerging from the European leaders' summit scheduled for tomorrow is dragging European indices lower and depressing US equities this morning. In addition, traders are struggling to digest several key earnings reports. There was some confusion earlier in the session, after the cancellation of a Ecofin meeting frightened many traders, who thought that the main summit had been cancelled. On the data front, the Richmond Fed manufacturing data for October was much weaker than expected, although like other regional Fed surveys out last week, the new orders component showed a big improvement over Sept. The October Consumer Confidence index was also much weaker than expected, officially putting the index back at levels seen during the 2008-09 recession. Gold spiked just after the US data dropped, gaining approx $30 to test just below $1,690. Crude is sustaining the big gains seen on yesterday's session, hovering just above the $93 handle. Bond prices are rallying with risk averse flows sending Bund, Gilt, Oat and Treasury prices higher.

Quarterly results from UPS met expectations. Note that US volumes and revenues showed little growth, and the only bright spot in the firm's outlook was Asia. Office Depot's results were also in line, and US comps were negative. Delta's results were poor and the firm said it would further reduce both domestic and international capacity to bring down operating expenses. UPS is down 2%, DAL is down 3.5% and off its worst levels and ODP is down 8%.

The collapse in shares of Netflix is a major focus this morning. NFLX is down more than 36% this morning and showing no sign of recovery following the company's admission last night that 800K customers had fled the service in its Q2 and that a second wave of cancellations was taking place in September and October, coupled with higher content costs. Multiple analysts cut the name overnight. In the semi space, Texas Instruments warned that the demand outlook was bleak and that revenues could fall further, even as it modestly exceeded expectations in its Q3. Competitor STMicro's performance was subpar its Q3, and said revenue would fall further in its Q4. Taiwan semi name AUO widely missed expectations. TXN is down 1%, but off its worst levels, while the ADRs of STM are down more than 6%.

Novartis and Lilly are dragging down other pharma stocks this morning with bad news. Lilly withdrew its Xigris drug following failure of a clinical study and said it would take charges, although it also reiterated its FY11 guidance. Swiss giant Novartis missed expectations and warned that it would speed up its restructuring efforts. Shares of Amgen are down 2% despite crushing earnings expectations, boosting its buyback and hiking its FY11 guidance.

Among industrial names, DuPont's very strong profit in Q3 and higher guidance reflect economic strength in a traditional slow period for the chemicals industry. The company said unexpected demand growth in Latin America and among agricultural segments helped quarterly results. Manufacturer 3M offered disappointing results and cut its FY11 guidance thanks to weakness among tech sector clients, while other industrial businesses saw very strong revenue growth. DD is flat and MMM is down nearly 5%. Steel names AK Steel and US Steel had mixed results: AKS's quarterly loss was due to one-time charges, while ex charges it was right in line, while US Steel widely missed expectations due to FX losses (ex losses it widely beat expectations). Nevertheless both firms warned that economic headwinds were a major challenge for their outlook. Shares of X are down 6% while AKS is down 13%.

The price action during the New York session was choppy, reflecting the paltry outlook for the EU leader summit scheduled for tomorrow. EUR/USD bounced wildly within a 100 pip range and tested the 1.3850 level on confusion over the timing of the various European meetings on Wednesday.

Markets calmed down after officials confirmed that the leaders' summit was on; note that a short technical Ecofin meeting had been penciled in for Wednesday as well, and has now been cancelled.

USD/JPY continued to hover just under the 76 handle, a hair above the all-time lows of 75.78 seen last Friday. Tough words between the US and China on trade are punishing the yen - the US Treasury warned that China's access to US markets depended on fixing discriminatory practices. Note that the yen is being "held hostage" between China and the US. CAD was weaker after the Bank of Canada slashed its 2011 and 2012 GDP growth prospects. The USD/CAD pair tested above 1.02 after probing below parity ahead of the BOC rate decision.