Reports » Asia

Asian stock market, economy and companies update (September 12, 2012)

Contributed by Trade The News

***Markets Snapshot (as of 03:30GMT)***
- Nikkei225 -0.7%
- S&P/ASX -0.2%
- Kospi -0.2%
- Shanghai Composite -0.7%
- Hang Seng +0.2%
- Sept S&P500 +0.1% at 1,432
- Dec gold +0.2% at $1,738/oz
- Oct Crude oil -0.1% at $97.07/brl

***Notes/Observations***
- Asian equity markets are trading mixed ahead of the critical risk event on tap for the early European session. German high court is set to unveil its initial ruling dealing with the constitutionality of the permanent bailout mechanism ESM and the extent to which euro fin mins would oversee disbursements to the troubled peripheral states. As indicated in our preview published in the US hours (15:00ET), markets will be particularly mindful of the conditions that will in all likelihood be attached to the compact, namely the type and maximum amount of securities that can be purchased by the ECB, any compliance-related thresholds for states to maintain support of the euro zone, as well as potential (but unlikely) inquiry into the German opinion regarding the ESM impact on the state in a way of a referendum.

**Fixed Income/Currencies**
- Major USD pairs are contained to narrow ranges going into the German court ruling. EUR/USD traded up about 20 pips above $1.2865, unable to breach US session high of $1.2870 but maintaining gains above that key 200-day MA around $1.2830. USD/JPY remains under pressure below the ¥78 handle as expectations rise for FOMC-induced rally in US treasuries that would pressure yields and weigh on the greenback. AUD is the top performer among high-beta majors, rising to 2-week highs above $1.0460 following stronger than expected Q2 dwelling starts data that marked a 9-month high. Kiwi dollar rallied about 30 pips to $0.82 handle despite more commentary from New Zealand fin min in opposition to strong currency rates. Looking ahead, RBNZ is expected to keep rates unchanged for the 12th consecutive time at 2.50% at its decision in early Asia session tomorrow.

- (AU) Australia MoF (AOFM) sells A$500M in 5.25% 7-yr bonds, avg yield 2.791%; bid-to-cover 4.62x
- (CN) China FX regulator SAFE: CNY rate is at reasonable level
- (US) Egan Jones: Affirms US sovereign rating at AA; Outlook negative

***Speakers/Political/ In the Papers***
- (EU) ECB's Assmussen: ECB should be aware not to undermine primary mandate with its measures; MT program is no substitute for structural reforms or fiscal consolidation in the EMU
- (CN) China VP Xi Jinping absence attributed to a recent ailment - SCMP
- JGB: Barclays chief JGB strategist: If China slowdown fails to suppress share prices, it is hard to expect accelerated decline in JGB yields from current levels - Nikkei News
- (NZ) New Zealand Fin Min English: Reiterates the Govt prefers lower level of NZD - comments to parliament
- (CN) Morgan Stanley cuts China 2012 GDP 7.5% from 8.0% prior

**Asia Equities**
- Fast Retailing 9983.JP: To open its largest global flagship in Shanghai in 2013 - Shanghai Daily
- Kia Motors 000270.KR: Announces tentative wage agreement with union - financial press

**US Equities**
- TXN: Mid-quarter update: Narrows Q3 EPS HIGHER to $0.38-0.42 v $0.45e, Narrows Rev to $3.27-3.41B v $3.35Be; -0.1% afterhours
- STLD: Guides Q3 EPS $0.09-0.14 (ex items) v $0.19e; -4.8% afterhours
- FB: CEO Zuckerberg: Performance of the stock has been disappointing; Co cares about shareholders; Next three to five years the question is how well we do with mobile - TechCrunch Disrupt conf; +3.5% afterhours
- DE: Commentary on Aug retail sales; Industry Utility tractors sales +8%; Deere sales in line with the industry; Flat afterhours

***Economic Data***
- (AU) AUSTRALIA Q2 DWELLING STARTS Q/Q: 4.6% V 3.0%E (9-quarter high)
- (AU) AUSTRALIA SEPT WESTPAC CONSUMER CONFIDENCE: 98.2 V 96.6 PRIOR; M/M: +1.6% V -2.5%E
- (JP) JAPAN JUL TERTIARY INDUSTRY INDEX M/M: -0.8% V -0.5%E (biggest decline in 16 months)
- (JP) JAPAN AUG DOMESTIC CGPI M/M: 0.3% V 0.1%E; Y/Y: -1.8% V -1.9%E (first m/m rise in 6 months)
- (JP) JAPAN JUL MACHINE ORDERS M/M: 4.6% V 2.0%E; Y/Y: +1.7% V -3.6%E
- (KR) SOUTH KOREA AUG UNEMPLOYMENT RATE (SA): 3.1% V 3.2%E
- (US) API PETROLEUM INVENTORIES CRUDE: +221K V -1.5ME; GASOLINE: -4.16M V -1.5ME; DISTILLATE: +2.55M V -1ME; UTILIZATION: 84.3% V 87.1% W/W