Markets Quiet Ahead Of EU Summit; Japan Posts Strong Retail Sales

(JP) JAPAN MAY RETAIL TRADE M/M: 0.7% V 0.2%E; Y/Y: 3.6% V 2.9%E (3-month low); LARGE RETAILERS' SALES Y/Y: -0.9% V -1.0%E

(KR) SOUTH KOREA MAY CURRENT ACCOUNT: $3.61B V $1.73B PRIOR (6-month high); GOODS BALANCE: $1.75B V $1.75B PRIOR

(AU) AUSTRALIA Q1 JOB VACANCIES Q/Q: -5.3% V +0.7% PRIOR

(NZ) NEW ZEALAND JUN NBNZ ACTIVITY OUTLOOK: 20.8 V 34.9 PRIOR; NBNZ BUSINESS CONFIDENCE: 12.6 V 27.1 PRIOR (14-month low)

(AU) AUSTRALIA MAY HIA NEW HOME SALES Y/Y: 0.7% V 6.9% PRIOR

(TH) THAILAND MAY MANUFACTURING PRODUCTION INDEX Y/Y: 5.5% V 2.5%E

(JP) Japan investors bought ¥870B in foreign bonds last week vs ¥71B bought in prior week; foreign investors bought ¥50B in Japan stocks last week vs ¥59B prior

Markets Snapshot (as of 04:30GMT)
Nikkei225 +0.3%

S&P/ASX +0.6%

Kospi -0.2%

Taiwan's Taiex +0.7%

Singapore Straits Times Index +0.9%

Shanghai Composite +0.3%

Hang Seng +1.1%

September S&P Futures -0.1% at 1,315

August gold -0.1% at $1,573/oz

August crude oil -0.1% at $79.33/brl

Overview/Top Headlines
Markets saw another day of gains after stronger Japan retail sales and an overall more positive view on the global economy. Gains were tempered however as the EU Summit is scheduled to start later in today's European session. The USD weakened across the board with some risk appetite, while commodities rose including crude, copper and aluminum. EUR/USD gained 50 pips to $1.2515, USD/JPY fell to ¥79.40 and AUD/USD was up about 40 pips to $1.0120 and testing as high as $1.0130. USD/KRW well to KRW1,153 after May current account data came in at a 6-month high at $3.61B, Bank of Korea's (BoK) Yang said that June current account may be higher than May, the Kospi saw little gain on the data.

Fed's Lockhart (voting member, dove) commented after the US close, sees the US economy growing around 2%, slower than earlier outlook; conditions do not warrant further action, but QE3 remains an option on the table. Fed has proper tools to deal with any deterioration in European crisis, Fed and ECB will boost coordination if financial contagion spreads. Another round of easing through more asset purchases certainly an option.

Speakers/Geopolitical/In The Press
(CN) According to a Chinese real estate provider Homeline, land auction premiums in top 20 cities have been rising since the start of June to reach as high as 15%. - China Daily

(KR) Korea International Trade Association (KITA): Cuts 2012 export growth target to 2.4% from 8.2% due to impact from euro zone; Cuts imports target to 4.1% from 7.8%.

Equities
NSANY: Reports May global vehicle production 17.9% y/y to 435.1K units.

Asustek, 2357.TW: Cuts Q2 guidance flat to +5% y/y (prior +5-10%); Some Nexus tablet bookings will be in Q3 instead of Q2.

GLEN.UK: Said to be ready to walk away from Xstrata merger if group of shareholders including Qatar do not drop their demands for a higher premium. - FT

COK.AU: Secures 4.2M ton Wiggins Island Expansion 1 port capacity.

Korean Air, 003490.KR: To raise fares for domestic routes by 9.9% on average starting next month; first increase since Jul 2004. - Korean press

STO.AU: Revised estimated capital costs to $18.5B to the end of 2015; will move up $2.5B in capex for GLNG from the post 2015 period.

BHP: CEO of non-ferrous metals Mackenzie: Olympic Dam expansion project in South Australia is not guaranteed to be approved before an indenture agreement with the South Australian government expires later this year. - Australian Financial Review

US Equities
NWSA: Board approves in principal to split the company into publishing and entertainment; official announcement to come Thurs morning - financial press; +0.3% after hours.

MLHR: Reports Q4 $0.28 v $0.30e, R$421M v $427Me; Raises quarterly dividend over 300% to 0.09 from 0.022; -0.6% after hours.

PAYX: Reports Q4 $0.34 v $0.34e, R$551.5M v $558Me; +0.2% after hours.