- Nikkei225 -0.3%
- S&P/ASX +0.8%
- Kospi +0.2%
- Taiex flat
- Shanghai Composite -0.4%
- Hang Seng +0.6%
- Dec S&P Futures +0.2% at 1,224
- Feb Gold -0.1% $1,421/oz
- Jan Crude oil -0.3% $89.11/brl
- Mar Copper +0.8% at $4.04
Overview/Top Headlines
- Asian market session saw rollercoaster-like volatility across the landscape of political compromises in the US, renewed fears of a tightening in China, a dovish monetary policy stance from the central bank in Australia, and an upgrade for emerging Asia from Asian Development Bank. Blended together, the mixed developments resulted in diverging market performance, with Nikkei225 underperforming on weak dollar (strong Yen), S&P/ASX rising the most on implications of lower borrowing costs, and Shanghai Composite paring opening losses toward late session gains. In currencies, European and commodity majors extended US session gains:
EUR/USD rose as high as 1.3350, GBP/USD reached 1.5760, and AUD/USD topped 0.9920 in spite of the dovish RBA following initial post-decision losses. Japanese Yen tracked weakness in the dollar, as USD/JPY fell to 3-week lows of ¥82.35. Ahead of BOC rate decision, USD/CAD traded in a 25-pip range of 1.0045-70.
- US: President Obama announced a compromise containing temporary 2-yr extension of all tax cuts (including those for the wealthy) in return for Republicans' concession to renew federal jobless benefits for 13-months as part of the deal.
- China: Local press speculated PBoC could put the State Council shift to "prudent" policy announced late last week into action with a rate hike as early as this weekend. Overall risk aversion/dollar gains following the report proved to be fleeting, as traders reported the central bank's 1-yr bill auction was priced at an unchanged yield of 2.3437% for the 4th consecutive session.
- Asia Development Bank (ADP): Also helping regional sentiment, ADB raised ex-Japan Asia 2010 GDP forecast to 8.6% from 8.2%, affirming 2011 at 7.3%. ADB also raised China 2010 GDP outlook to 10.1% from 9.6%, and also affirmed 2011 at 9.1%.
- Reserve Bank of Australia rate decision sounded off toward the more dovish side, leaving rates unchanged at 4.75% as expected. Most notably, RBA said lending rates in the economy are now a little above average and the pace of employment growth would be more moderate in months ahead, suggesting policymakers could stay on hold well into 2011.
Speakers/Geopolitical/In the press
- (CH) China Nov New Yuan Loans (CNY) estimated at CNY600B v CNY587.7B prior; YTD Figure now exceeds official CNY7.5B 2010 target - Chinese press
- (JP) Japan Fin Min Noda: Will not issue bonds to cover revenue lost from lower corporate tax rate; Difficult to lower taxes by 5% without replacing that revenue from somewhere else
- (KS) Financial Supervisory Services of South Korea: China's holdings of Korea government bonds have tripled to KRW6.2T at end of Nov v KRW1.9T end of 2009
- (CH) China top planning agency National Development and Reform Commission (NDRC): Q4 GDP may reach 9% and 2010 GDP seen at 10.2%
- (VN) Vietnam Govt: Prices are "not yet under enough control"; Growth rate has negatively impacted economic stability
Equities
- CSL.AU: Will continue to grow R&D investment by 5%-7% y/y - Australian Press
- Hong Kong Exchanges & Clearing Limited: CEO Charles Li Xiaojia: Has been making many changes to the infrastructure in order to facilitate yuan priced stocks; no applications have been submitted for listing - HK Standard
- BEN.AU: Planning to issue A$775M in mortgage backed bonds (approx 21% of market cap)
- NCM.AU: Planning to boost gold output by 2014 to 3.75M ozs v 2.74M ozs in 2010
- Hon Hai Precision Industries: Expanding retail presence on China mainland through investing in employees who want to return home and open their own retail store offering the company's products - HK Standard
FX/Fixed Income/Commodities
- (AU) Australia Newcastle coal exports +16.7% for week ending Dec. 6th
- (CH) China Qinhuangdao port reported that coal prices fell 0.6% w/w to CNY795-810 per ton (first fall in 3 months) - China Daily
Economic Data Asian stock market
- (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH TARGET RATE AT 4.75%, AS EXPECTED
- (JP) JAPAN NOV OFFICIAL RESERVE ASSETS: $1.1T V $1.1T PRIOR
- (NZ) NEW ZEALAND NOV QV HOUSE PRICES Y/Y: 0.3% V 1.1% PRIOR (13-month low)
- (AU) AUSTRALIA NOV AIG PERF OF CONSTRUCTION INDEX: 42.2 V 44 PRIOR (6 consecutive months of contraction)
- (JP) JAPAN OCT PRELIMINARY LEADING INDEX: 97.2 V 97.3E (9-month low; COINCIDENT INDEX: 100.7 V 100.8E
- (PH) PHILIPPINES NOV CPI M/M: 0.8% V 0.3%E; Y/Y: 3.0% V 2.5%E
- (UK) BRC NOV RETAIL SALES MONITOR SSS Y/Y: 0.7% V 0.8% PRIOR; TOTAL SALES Y/Y: 2.8% V 2.4% PRIOR For the latest updates PRESS CTR + D or visit Stock Market news Today
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