$USD Slides Following China Rate Cut, All Eyes On Bernanke Testimony

07 June 2012 13:30 GMT Talking Points
U.S. Dollar: Correction Gathers Pace On China Rate Cut, All Eyes On Bernanke Euro: RSI Carving Upward Trend, Spain Faces Higher Finance Costs British Pound: Testing Former Support, BoE Holds Current Policy U.S. Dollar: Correction Gathers Pace On China Rate Cut, All Eyes On Bernanke
The greenback weakened further on Thursday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) slipping to a fresh weekly low of 10,143, and the rise in risk sentiment may continue to dampen the appeal of the reserve currency as market participants see the international community increasing its effort to tackle the debt crisis. Indeed, the People’s Bank of China lowered its one-year lending rate by 25bp, which will take effect on June 8, and it seems as though the world’s second-largest economy will continue to embark on its easing cycle as the debt crisis continues to dampen the outlook for global growth.
As market participants turn their attention to Fed Chairman Ben Bernanke’s testimony in front of Congress, the fresh batch of central bank rhetoric is likely to heavily impact the USD, and a slew of dovish commentary may further weaken the greenback as market participants increase bets for another round of quantitative easing. However, as Fed officials continue to take note of the more robust recovery, it will be increasingly difficult for the central bank head to justify QE3, and we may see Mr. Bernanke strike a more balanced tone for monetary policy as the recovery gradually gathers pace. In turn, we will pay close attention to his fundamental assessment for the U.S. economy, and we may see the dollar regain its footing should the Fed chairman strike an improved outlook for growth and inflation.
Euro: RSI Carving Upward Trend, Spain Faces Higher Finance Costs
The Euro rallied to 1.2610 amid the rise in risk-taking behavior and the rebound in the EURUSD may turn into a larger correction as the global movement to ease policy helps to prop up market sentiment. Indeed, Spain sold EUR 2.07B in bonds yielding 6.044% versus the EUR 2.0B target, but heightening finance costs across the region continues to raise the threat for contagion as European policy makers look to buy more time. In turn, it seems as though the European Central Bank is getting ready to act in July, but the Governing Council may have little choice but to carry out its easing cycle throughout 2012 as the fundamental outlook for the region turns increasingly bleak. As the EURUSD struggles to push back above the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50, we may see the pair face range-bound price action over the near-term, but we will be keeping a close eye on the relative strength index as it appears to be forming an upward trend.
British Pound: Testing Former Support, BoE Holds Current Policy
The British Pound showed a fairly muted reaction to the Bank of England interest rate decision as the central bank stuck to its current policy in June, but we’re seeing the GBPUSD come up against former support around the 1.5600 as currency traders increase their appetite for risk. As the BoE refrains from releasing a policy statement, market participants will certainly look forward to the meeting minutes due out on June 20, and another 8-1 vote count may instill a bullish outlook for the sterling as it dampens speculation for more quantitative easing. As central bank officials anticipate to see a more robust recovery later this year, we should see the Monetary Policy Committee preserve its wait-and-see approach throughout 2012, and the board may continue to move away from its easing cycle amid the stickiness in underlying price growth. If the GBPUSD fails to clear 1.5600, we should see the pair track sideways ahead of the BoE Minutes, and the pound-dollar may build a short-term base in June as it continues to hold above the 50.0% Fib from the 2009 low to high around 1.5270.

Asian Market Update: China trade data misses expectations, Australia records 1-yr low for "unemployment Have Market Intel?

CHINA APR TRADE BALANCE: $18.42B V $9.9BE >- (AU) AUSTRALIA APR UNEMPLOYMENT RATE: 4.9% V 5.3%E (1-yr low); EMPLOYMENT CHANGE: 15.5K V -5.0KE (2nd consecutive increase); PARTICIPATION RATE: 65.2% V 65.4%E
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.25%; AS EXPECTED
- (JP) JAPAN MAR CURRENT ACCOUNT TOTAL: ¥1.59T V ¥1.4TE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥785.5B V ¥647BE; CURRENT ACCOUNT BALANCE Y/Y: -8.6% V -17.1%E; TRADE BALANCE: ¥4.2B V -¥43BE
- (NZ) NEW ZEALAND APR BUSINESS NZ PMI: 48.0 V 53.8 PRIOR
- (PH) PHILIPPINES MAR TOTAL EXPORTS: -1.2% V 11.0%E; TOTAL MONTHLY EXPORTS: $4.3B V $4.4B PRIOR
- (NZ) NEW ZEALAND APR QV HOUSE PRICES Y/Y: 3.1% V 3.0% PRIOR
- (JP) JAPAN APR BANK LENDING INCLUDING TRUSTS Y/Y: 0.3% V 0.8% PRIOR; BANK LENDING EX-TRUSTS Y/Y: 0.4% V 0.9% PRIOR
- (JP) JAPAN APR BANKRUPTCIES Y/Y: -7.5% V -1.9% PRIOR
- (JP) JAPAN APR ECO WATCHERS CURRENT SURVEY: 50.9 V 51.8 PRIOR; OUTLOOK: 50.9 V 49.7 PRIOR
- (MA) MALAYSIA MAR INDUSTRIAL PRODUCTION Y/Y: 0.6% V 3.3%E; MANUFACTURING SALES VALUE Y/Y: 3.1% V 12.1% PRIOR
- (JP) JAPAN APR TOKYO AVERAGE OFFICE VACANCIES Y/Y: 9.2% V 9.0% PRIOR
- (JP) Japan investors bought ¥56B in foreign bonds last week v ¥1.2T sold in prior week
- (CO) Colombia Mar Exports: $5.69B v $4.8B prior
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -0.1%
- S&P/ASX +0.1%
- Kospi -0.1%
- Taiwan Taiex +0.2%
- Singapore Straits Times Index -0.2%
- Shanghai Composite -0.2%
- Hang Seng -0.9%
- Jun S&P Futures +0.2% at 1,353
- June gold unchanged at $1,594/oz
- June Crude -0.2% at $96.57
***Overview/Top Headlines***
- Focus remains on European uncertainty. Bank of Korea after leaving rates unchanged mentioned it remains one of the top risks, noting that it thinks the EU is in a mild recession but not expected to get worse. China remained cautious with its yuan setting and it expected to continue to do so until the latest storm blows over. According to China Investment Corp President Gao, China sovereign wealth fund has stopped buying European government sovereign debt. Late in the US session, the Fed gave Chinese banks ICBC, Bank of China and Agricultural Bank of China approval to expand into the US market. Crude was weaker, Brent crude rose to $113.20, corn gained over 1% while wheat fell nearly 3% to $5.91 ahead of U.S. Department of Agriculture supply-demand report.
- Australia recorded a lower than expected unemployment rate at 4.9% in April, a 1-year low. Employment change rose for the second consecutive month. The news drove the AUD/USD higher above $1.0115, but will make an argument not to cut rates at the next RBA meeting. Full time jobs lost 10,500, however part time jobs added 26,000 close to March levels. Strength in the jobs market is mostly attributed to the mining boom and the huge investments from the major miners into expanding capacity to meet demand from India and China. Australia 10-year yields around 3.321% after the data.
- China April trade balance came in at a surplus of $18.4B, much higher than expected, exports at 4.9% were weaker than expected, imports rose only 0.3%. Some of the export weakness is attributed to the lack of recovery from European demand. China has increased its calls for the US to ease restriction on high tech exports in recent weeks in order to help imbalances. The yuan fell for a fifth consecutive day after a weaker setting by the PBoC. Shanghai Composite and Hang Seng both declined, iron ore imports say a huge fall off to 57.7M tons, -8% m/m, copper imports also fell 8% m/m, this sent the S&P ASX back towards unchanged territory after rebounding from employment data. Miners in Australia pared back some of their earlier gains as well. Surprisingly copper futures held on to their gains.
***Speakers/Geopolitical/In the press***
- (JP) BoJ's Shirai: Japan economic activity is more or less flat though there are indications of improvement
- (HK) Hong Kong govt may increase public housing rent by 10% - HK press
- (KS) South Korea Finance Min Bahk: Recent Won's moves not a concern, as the currency has been moving in a limited range
***Equities***
- Hynix, 000660.KR: Creditors planning to sell half of their 6.4% stake in the company, worth KRW576B - Korean press
- CHU: Expects 3G users to reach 90M by the end of 2012; Sees 3G rev at CNY70B v CNY40B in 2011
- RIO: CEO: Affirms it is more confident out its outlook than 6-months ago; Tackling rising costs, especially in Queensland is challenging - AGM
- STEL.SG: Reports FY12 Net S$3.99B v S$3.8B y/y; Rev S$18.8B v S$18.07B y/y
- ORG.AU: In talks with the United States' Export-Import Bank to acquire A$2.93 B in financing to help fund $6.0B expansion of Australia Liquefied natural gas facility in Gladstone - The Australian
***Fixed Income/Commodities/Forex***
- USD/INR: India Central Bank (RBI) fixes intra-day open position limit in forex at 5-times available limit; Only applies to rupee trades
- (CN) PBoC sells CNY24B in 7-day reverse repos at 3.30% v 3.53% on May 2nd

~~~ Commodities Drop on China Growth Fears, ECB and US Data Key Ahead

Crude Oil, Copper Sold on China Growth Fears – ECB and US Data Set Eyed Ahead Gold and Silver Look to Dollar’s Response to Risk Trends, QE3 Bets for Direction Commodity prices are extending Asia-session losses in early European trade, weighed down by a drop in China’s Non-manufacturing PMI index on fears that one the world’s top-two consumers of raw materials is slowing. Looking ahead, all eyes are on the European Central Bank interest rate decision. Traders are looking for guidance on steps policymakers are prepared to take to alleviate what appears to be deepening recession after yesterday’s sharp slump in final PMI readings and another record-high unemployment print.
An outright rate cut seems unlikely this time around with inflation stubbornly high at 2.6 percent. However, if Mario Draghi and company invoke the ECB’s singular mandate of price stability to justify inaction and fail to reassure markets with the prospect of forthcoming easing in the months ahead, worries about Eurozone-bornheadwinds facing global output threaten to weigh on risk appetite. This bodes ill for cycle-sensitive commodities including crude oil and copper, while gold and silver may follow lower as haven-seeking capital flows boost the US Dollar.
Later in the day, the spotlight turns to US Jobless Claims and the ISM Non-manufacturing Composite figures. These are likely to be interpreted in terms of their implications for the likelihood of Fed QE3, which means softer outcomes could counter-intuitively support risk appetite and weigh on the Dollar (both via sentiment trend and dilution fears) to the benefit of precious metals. With that in mind, significant follow-through on this front may be lackingas traders reserve judgment until after Friday’s all-important Nonfarm Payrolls data point crosses the wires. This means any negative carry-over from the ECB’s outing may have scope to hold sway over price action.
WTI Crude Oil (NY Close): $105.22 // -0.94 // -0.89%
Prices put in a Harami candlestick pattern below resistance at a falling trend line set from late February, hinting a pullback may be ahead. Initial support lines up in the 104.90-105.15 area, marked by a horizontal barrier and the 50% Fibonacci retracement level. A break below here exposes rising trend line support at 102.42. Resistance is now at 106.03 and bolstered by the 61.8% Fib at 106.27.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1653.50 // -8.93 // -0.54%
Prices followed a Spinning Top candle below trend line resistance capping gains since late March with a push lower. Sellers face initial support at 1637.95, the 23.6% Fibonacci expansion, with a break lower exposing the 38.2% level at 1611.77. Trend line resistance is now at 1664.48.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $30.64 // -0.34 // -1.08%
Prices are recoiling from resistance at 31.36, a former support reinforced by a downward-sloping trend line set from the April 3 high. Sellers face initial barriers at 29.96, the April 25 low, followed by the bottom of a falling channel set from early March now at 29.50. Near-term resistance is at 31.08.

 Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.788 // -0.056 // -1.46%
Prices turned lower as expected after putting in a Hammer candlestick below support-turned-resistance at a rising trend line set from mid-February. Initial support lines up at 3.713. Trend line resistance is now at 3.855.

 Daily Chart - Created Using FXCM Marketscope 2.0

>>> Weekend: Early Markets Drifting, Looking to Earnings, Spain, China for Cues

15 April 2012 21: 43 GMT Weekend DevelopmentsECB Asmussen: Europe has done enough on firewall, IMF members should increase contributions ECB Asmussen: Spain is repairing market confidence Spanish PM Rajoy seen supported by regional leaders for more austerity PBoC/Chinese government increases CNY trading band to 1% per day US 1 Q earnings start next week, major financials reporting throughout week Concerns stemming from the European sovereign debt crisis extending into Spain continued to affect markets in early trading. As Spanish 5 year CDS, a measure of insurance costs against Spanish default, traded near its all-time high again, Spanish leaders are continuing to push through additional budget cuts to bring its debt down from 68.2% currently. Although market reaction is relatively muted due to the safeguard provided by the ECB's LTRO lending earlier this year, traders will continue to actively monitor the situation in Spain to gauge possible contagion effects. Spain is scheduled to sell 2014 and 2022 bonds on April 19th at 0830GMT.

-Data Bloomberg/Markit
The Australian and New Zealand dollars led gainers higher against the dollar this morning on the heels of the People's Bank of China and State Bureau of Foreign Exchange's decision this weekend to increase the trading band for USDCNY from 0.5% to 1.0% per day. As the Chinese government continues to fine-tune its economic policy to keep inflation low and stable growth, it has been more willing to use exchange rate policies to reach its goal.
Following recent commentary from first Wen Jiabao that the USDCNY exchange rate may be nearing "equilibrium," USDCNY's tight range in 2012 and this weekend's move, markets may see China as less willing to only let the Yuan appreciate, choosing instead a more liberalized policy. The lack of expected continued gains combined with capital current RMB controls may start a shift of capital into higher yielding, more liquid assets denominated in Australian and New Zealand dollars, supporting this morning's move.

-Data Bloomberg
At the time of writing, the Euro is leading losers, followed closely by the Swiss Franc. The New Zealand dollar is leading gainers were higher expected data.

-By David Liu, DailyFX Research

~ shares weaker, Yen strengthens; China posts trade surplus of surprise

-(JP), the BANK OF JAPAN (YOU 'RE) LEAVES RATE UNCHANGED TARGET RANGE BETWEEN 0.0% TO 0.10%, AS EXPECTED >-(CN) CHINA MAR TRADE BALANCE: + $ 5.4 (B) (V)-$ 3.2 BE; Q1 $ 670M v-$ 1.0 B y/y
-(AU) AUSTRALIA MAR NAB BUSINESS CONFIDENCE: 3 V 1 PRIOR; BUSINESS CONDITIONS: 4 V 3 PRIOR
-(AU) AUSTRALIA MAR ANZ JOB ADVERTISEMENTS (M/M): 1.0% V 3.3% PRIOR (3-month low; 3rd consecutive m/m increase) >-(AU) AUSTRALIA AIG PERFORMANCE OF CONSTRUCTION INDEX: 36.2 V 35.6 PRIOR (first rise in 3 months; 22nd month of contraction)
-(ID) INDONESIA FEB M2 MONEY SUPPLY Y/Y: 17.7% V 17.2% PRIOR
-(A) MALAYSIA FEB INDUSTRIAL PRODUCTION Y/Y: 7.5% V 5.0% E; MANUFACTURING SALES VALUE Y/Y: 10.5% V 4.1% PRIOR
-(A) MALAYSIA FEB TRADE BALANCE (MYR): 10.6 B V 10.2 BE
-(UK) UK MAR LLOYDS EMPLOYMENT CONFIDENCE INDEX:-58 V-69 PRIOR
-(UK) UK MAR RICS HOUSE PRICE BALANCE:-10% V-13% (E)
-(CO) Colombia Mar Producer Price Index M/M:-0.2% v, 0.1% of the prior; Y/Y: 1.6% v 2.7% prior
-(CO) Colombia Feb Exports: $ 4.8 (B) v $ 4.7 (B) prior

*** Markets Snapshot (as of 04: 30GMT) ***
-Nikkei225 + 0.2%
-& P/ASX-0.7%
-Kospi was 0.4%
-Taiwan Taiex + 0.1%
-The Singapore Straits Times + 0.2%
Shanghai Composite-1.0%
-Hang Seng-1.1%
-& P Futures + 0.1% at 1,376
-June gold + 0.6% at $ 1,653/oz
-May Crude-0.4% at $ 102.33

*** Overview/Top Headlines ***
Asian markets were mixed with currencies little changed in the session. Most notable was the USD/JPY down 0.3% or about 30 pips to ¥ 81.28 after the Bank of Japan in a unanimous vote left rates unchanged and agreed to not announce any new monetary easing measures. The're also kept their economic assessment unchanged. You're reiterated that the y/y, rate of change in the CPI is unchanged and that they will pursue powerful monetary easing to combat deflation. EUR/JPY dipped to ¥ 106.56. China recorded a surprise trade surplus series in March of $ 5.35 (B) against a forecast for a deficit of $ 3.2 (B). Exports came in above expectations while imports were much lower than the 9.0% expected at 5.3%. While positive overall the lower imports indicate that demand may be weaker than initially thought, though the behavior should ease some fears of a hard landing. China Customs Bureau head Zheng said that the March trade data shows that the global situation remains "grim" and that the 2012 trade behavior likely to shrink vs. 2011. The AUD/USD jumped higher on the news to session highs of $ 1.0358 before falling back to $ 1.03. Markets will now look to Friday's release of China Q1 GDP data. Fed Chairman Bernanke said that financial stability mission is as important as monetary policy; The Fed no longer has the same tools to counter money fund problems. Economy is still far from recovering from the financial crisis. Fed's emergency lending power has not been seriously weakened.

*** Speakers/Geopolitical/In the press ***
-(CN) China State Administration of Foreign Exchange (SAFE): China Reiterates will ", then" promote convertibility of the yuan-Chinese press
-(BR) Brazil Central Bank Tombini: Expects stronger growth in H2 v H1; SELIC rate target likely to drop this slightly above the record low
-(JP) Japan Fin Min Azumi: Welcomes opposition LDP's policy goal is to double the sales tax; LDP's plan shows 10% hike in sales tax is unavoidable >-(AU) Australia is close to breaching its A $ 250B debt ceiling less than a year after raising it to the new cap due to a larger than expected deficit-The Australian
-(CN), According to the China Securities Journal March new yuan loans may be CNY900B v CNY798Be with Q1 loans totaling CNY 2.35 T v CNY 2.4 T target

** * Equities * **
-THE DAP.AU: Has received offers for JV on non-producing uranium assets
-WPL.AU: Will delay final Browse decision; Was given approval to amendments to the Browse Basin retention leases
-SMI, 981. HK: Raises Q1 Rev guidance + 14-15% q/q (implies $ 330.1-333.0 M) from + 7-9% y/y, prior
-AUN.AU: ACCC approves deal with Foxtel; Deal unlikely to substantially lessen competition

*** US Equities ***
-VVUS: Receives Notification of Qnexa (R) PDUFA Date Extension, delaying the new drug application (NDA) review by three months; -8.5% after hours
-HLIT: Reports prelim Q1 $-0.02.tar.bz2-$ 0.09, 0.03 v e $ 125-128 m v $ 137Me ($ 132-142M prior guidance); -4.0% after hours

*** FX/Fixed Income/Commodities ***
-(TW) Taiwan sells TWD40B vs. TWD40B indicated in 5-Year Bonds; Programmable Yield%
-Various container shipping firms plan to raise rates for routes between the US and Asia to $ 50-100/TEU-US financial press
-(AU) Newcastle Coal Exports in the week ended April 9th w/in: + 4.0
-(AU) Export from Australia's larger bulk commodity ports show a huge improvement y/y in Q1 despite heavy industrial action impacting the iron ore and coal sectors-the Australian Financial Review

TradeTheNews.com Asian Market Update: China Blitz PMI bleibt unter 50; Japan zeichnet einen Handelsüberschuss Überraschung waren

-CHINA (CN) MAR HSBC FLASH MANUFACTURING PMI: 48.1 v 49,7 before (5 consecutive contraction, 4-month low fall first in 4 months) >-(JP) JAPAN FEB MERCHANDISE TRADE BALANCE total: + ¥ 32 be V ¥ 120BE (first surplus in 5 months); BEREINIGTE trade balance:-313 b ¥ V ¥ 343BE (5-month high)
-(NZ) NEW ZEALAND Q4 GDP Q/F: 0.3% V 0.6%E; Y/Y: 1.8% V 2.2%E; 2011 GDP: 1.4% V 1.6%e
-(JP) JAPAN FEB NATIONWIDE SUPERMARKET SALES Y/Y: 0.3% V 1.2% BEFORE
-(CO) COLOMBIA JAN INDUSTRIAL PRODUCTION Y/Y: 2.4% V 4.0%E; RETAIL SALES Y/Y: 4.9% V 7.0%E
B. market snapshot (04: 30GMT).
-Nikkei225 0.1%
-S & P/ASX + 0.5%
-Kospi 0.2%
-Taiwan TAIEX + 0.8%
-Singapur Straits Times 0.3%
-Shanghai composite - 0.4%
-Hang Seng unchanged
S & P futures 0.1% at 1.396
-April gold 0.1% to $1.649 / oz
-Can raw 0.6% to $106.63
B. Overview/top headlines.
Markets were mixed today, with the weakness of the dollar against major currencies. Opening gains after HSBC Flash manufacturing PMI for China came back compared to 48,1 were, this was the 5th consecutive contraction and a 4-month low. There was some chatter ahead of time which could be the reading of 50. New exports was also from the last reading at 46.2 in February. First of all, the AUD/USD fell over 60 pips to $1.0415 (2-month low). The fell also Shanghai composite, but three hours later it returned to positive territory wins more than 0.3%. Over night the PBoC cut off the required reserve ratio (RRR) for other branches of the agricultural Bank of China to promote credit in the rural areas, March 25. The preferred policy, which now covers originally 563 county-level outlets in 8 provinces covers a further 379 outlet type in 4 provinces. Qualified so far 565 outlets have the lower ratio of RRR, a move that could share about CNY23B, when granting credit for these areas. Yen surprise in Japan for February has the a trade surplus a boost after. USD/JPY dropped below ¥ 83.20 in the news. This was the first surplus in 5 months, a high deficit of ¥ 313 b 5 month came the trade balance Japan adapted. Exports to China went for the sixth month in a row, while their biggest increase in exports in the United States since Dec 2010. The NZ$ 40 pips after Q4 fell GDP data, private expenditure increases expect tightening of the directive in December despite the soft Q4 GDP data 0.8%, while government spending start 0.7%, which was Q/q analysts at ANZ for the RBNZ, but must pick up economic growth in H2. Silver and copper reversed yesterday's profits fall 0.4% and 0.9% or. Wheat and maize on their profits up 0.3% and 0.4% respectively and.
** Speaker/geopolitical/in the press.
-(AU) Reserve Bank of Australia (RBA) signed CNY200B bilateral currency swap line with China the PBoC worth up to a$ 30 (b) first 3-year period
-(JP) Japan Govt Official: preliminary talks with China and South Korea by 3-way finished investment pact
-(KR) South Korea fin min Bahk: economy could his bottom in the first quarter reached
-(JP) boJ Morimoto: liquidity concerns in Europe declined, although debt crisis also risks of Japan and the world economy
-(EU) ECB Pres Draghi: LTRO will not fuel pump inflation; Will take preventative measures if deteriorating inflation Outlook
-(AU) RBA assist gov Ferrari: competition for deposits is the main driver of higher funding costs for banks
-(CN) China State Council Development Center bin researchers Yu: GDP by 8.5%, expected 2012 Narrow trade surplus expected in this year
B. shares.
-Wharf, 4.HK: FY11 reports underlying HK$ 8.1 benefit b V HK$ 7. 9be, Rev HK$ 24B, + 24% y/y
-VAH.AU: Australian competition and Consumer Commission expected to announce that it agrees with Australian Press Alliance between Virgin and SkyWest-
-BSL.AU: will the company into two units, which separated on global prefabricated building market and products market
-SIP.AU: Reports FY11 net a$ 49.2 M-V a$ 51Me; Special dividend declared by $0.015
** US stocks.
-GM: Australia Govt give has, an A is $ 275 M aid package to ensure GM Aussie unit will continue to cars in the country - Australian press; + 0.1% after hours
-DFS: Reports Q4 $1.18 V $0. 94, R$ 1.84 b V $1. 8be; 0.8% after hours
-DMND: Indulgence with lenders; unites itself $0.045 Dividend payment breaks; -1.6% after hours
B. FX/fixed income / commodities.
-(Uns), there are concerns that the United States is running, the space for natural gas, record production and weak demand - push us financial
-(CN) China NDRC planning to improve the coal price system and look in coal futures trading
-(JP) Japan Finance Ministry official: Japan of one of the 20-year EFSF bonds do not buy
-(CN) China Ministry of industry and information technology: Jan gold Edition + 3.7% y/y 24.13 tons - Chinese press
-GLD: SPDR gold trust ETF daily operations fall 3.1 tonnes to 1,290.2 tonnes as Mar 20th (lowest since 1,284.6 on Feb 28 h)

GLOBAL MARKETS-Shares inch up; China, euro zone PMI eyed

B. MSCI Asia ex-Japan up to 0.1 PCT, Nikkei opens down 0.3 pct

B. Yen rises against dollar after Japan from the trade surplus in February ekes

By Chikako Mogi

(Tokyo, March 22 Reuters) - Asian shares ranging from inched on Thursday but remained as investors waited for manufacturing data from China and the eurozone by this meeting for more clues about the State of their economies.

The MSCI Asia Pacific ex Japan index was up 0.1 percent, while Japan's Nikkei average 0.3 per cent opened.

Data from Japan, in a trade surplus of 32.9 billion yen in February - which raise first surplus 120 billion yen, the yen against the dollar to about 83.15 yen from 83.44 Yen in five months - against a forecast for a deficit, before the data was released, showed the country logged.

"While the business hours of Asian important market factors are trading data from Japan and China PMI," Yuji Saito, Director of the Division of Crédit Agricole Bank said in Tokyo foreign exchange.

"Otherwise markets is likely to continue to consolidate and tend to demand the end of the quarter and news flows as headlines to be affected" he said, adding, that markets overbought come sell under pressure, while oversold will see assets for bargain hunting.

Security prefers pressed, and in the light of the recent correlation between U.S. debt gives US Treasury yields on Wednesday and the dollar, the US currency be undermined can, when Treasury yields fall to keep, Saito said.

HSBC Flash report on China's factory activity is due at 0230 GMT and weak reading could further undermine sentiment on the market slows down is been weighted growth and demand from the world's second largest economy concerns.

Asian credit markets were early on Thursday with the spread on the iTraxx Asia ex-Japan investment hardly changed subjugated index grade.

EUROPE PROVISIONS RESURFACES

While some expect the debt crisis in the eurozone anytime soon be resolved, bearing in mind that structural reforms crucial need for the recruitment of their finances healthy several years, were investors nor even reminds to the way long before.

Portugal's core public deficit in the 2012 almost tripled first two months of the year, show a deepening economic slump dents is tax collection and stirs up concern of the country can miss their budget targets and Greece in require more rescue funds follow.

Italian and Spanish debt prices took a spanking spanking on Wednesday on concerns about Spain the slow progress in improving their finances, sending Spanish 10-year bond yields to a one-month high of 5.40 percent and pull up to a benchmark-Italian returns a weeks up of 5.0 per cent.

Italy faces stiff opposition to his severe austerity measures with the country's largest trade union call a general strike over labour market reforms on Wednesday.

The euro was achieved stable, but from a two-week high of $1.3286 on Wednesday with $1.3219.

On the positive side of Germany's RWI economic Institute its forecast for growth in the biggest European economy almost doubled to 1.0 percent generated as a result of the global Outlook and stabilise financial markets 2012.

Is over the worst of the crisis in the euro zone and the European Central Bank when inflation risks grow, said ECB Chairman Mario Draghi in a newspaper interview on Thursday published.

Investors sees to manufacturing data in Europe on Thursday, now with Flash are published, the PMI on eurozone forecast a general improvement over February, show estimates, according to a Reuters poll.

Wednesday of the data from the United States was also promising. U.S. home sales fell in February, but upward revisions of previous month pace and the first annual rise in prices in 15 months pointed to steady improvement in the housing market.

Brent oil rose to settle 8 cents to $124.20 a barrel on Wednesday. U.S. crude oil futures eased 0.3 per cent to $106.99 a barrel on Thursday after settling $1.20.

Asian Market Update: China home prices dip further in Feb;

CN) CHINA FEB HOME PRICES FELL M/M IN 45 OF 70 CITIES V 47 PRIOR; NEW HOME PRICES FELL M/M 27 OF 70 CITIES - update
- (UK) UK MAR RIGHTMOVE HOUSE PRICES M/M: 1.6% v 4.1% PRIOR (3rd consecutive m/m increase); Y/Y: 2.2% v 1.4% PRIOR (highest since Oct 2010)
- (NZ) NEW ZEALAND FEB PERFORMANCE SERVICES INDEX: 55.5 V 53.8 PRIOR
- (NZ) NEW ZEALAND Q1 WESTPAC NZ CONSUMER CONFIDENCE: 102.4 V 101.3 PRIOR
- (KR) SOUTH KOREA FEB DEPARTMENT STORE SALES Y/Y: 2.9% V -4.1% PRIOR; DISCOUNT STORE SALES Y/Y: -6.4% V 2.7% PRIOR
***Markets Snapshot (as of 04:3ahh
]0GMT)***
- Nikkei225 +0.3%
- S&P/ASX +0.5%
- Kospi +0.4%
- Taiwan Taiex -0.1%
- Singapore Straits Times +0.4%
- Shanghai Composite -0.3%
- Hang Seng +0.3%
- S&P Futures +0.2% at 1,402
- Spot gold +0.1% at $1,661/oz
- May Crude +0.1% at $107.36
***Overview/Top Headlines***
- Markets continued to cautiously ride the wave of global economic recovery. US Treasuries fell for the 9th day, 10-year Aussie govt bonds tipped 4.29%, above the benchmark rate of 4.25%. AUD/USD bounced higher from Friday to $1.0585 level, NZD also shifted higher on stronger consumer confidence data. The majors all continued to see strength against the yen, moves were modest but persistent with the return of the carry trade. China's major property names like Vanke, led the Shanghai Composite lower after China recorded new home prices falling in 27 out of 70 cities, total home prices fell in 45 out of 70 cities. Prices of new and existing homes in Shanghai and Beijing fell moderately, marking several consecutive months of decline. IMF's Zhu's said that Japan has very high debt and it will be unsustainable and they need to come up with a fiscal plan to address debt. Zhu also said that global growth rates slowing and risks are still to the downside despite some improvement. Zhu emphasized that it is very important for China to rebalance it's economy. The Korean Won gained against its cross after an improvement in department store sales. Oil prices continued to gain with Saudi crude production nearing record high levels at 9.87M bps in January.
***Speakers/Geopolitical/In the press***
- (AU) Reserve Bank of Australia (RBA) Gov Stevens: Monetary policy can play a role in stimulating demand if inflation will allow >- (CN) PBoC Deputy Gov Du Jinfu: China needs to further cut RRR
- (AU) Australia's Jobs Minister Shorten: Rate cut would help jobs; Strong A$ is challenging for policy and hurting employment
- (CN) China National Bureau of Statistics Head Ma Jiantang: China must strengthen reforms to ensure economic growth continues - Chinese press
- (JP) Ruling DPJ still struggling to win enough support to raise consumption tax; PM Noda may have to dissolve Diet and call snap elections - Nikkei News
- (CN) China March new yuan loans may be CNY800B v CNY711B in Feb - Chinese press
- (JP) Japan and 12 other Asian nations may double regional currency swap from the current $120B - Nikkei News
- IMF's Lagarde: High levels of debt and rising oil prices still present risks to global economy despite signs of stabilization in the eurozone; Possible for Yuan to become reserve currency in the future
***Equities***
- GNS.AU: Has completed the first stage of a sale of the Gunns Green Triangle forest estate, with funds managed by New Forests Pty Ltd taking a controlling interest - The Australian
- Rusal, 486.HK: Reports FY11 Net $237M v $1.9Be; Rev $12.3B v $11.0B y/y
- DJS.AU: Trading halted pending vote by the board on new "strategic plan" to be unveiled on Wednesday
- CHU: Reports Feb subscribers 205.9M v 202.9M prior
- TEN.AU: Exec: Currently starting a strategic review of unit, Eye Corp
- AAPL: CEO Cook schedules conference call for Mar 19th to discuss company's cash balance at 09:00ET (06:00PT)
- FP.FR: CEO: Reached agreement with Sinopec for shale gas exploration rights; Sinopec and China's SAFE said to have taken 2% stake in Total (terms not disclosed) - US financial press
***FX/Fixed Income/Commodities***
- (IN) India Jewelers continue strike action over gold tax hike
- Tokyo Steel, 5423.JP: Raising April prices for h-beams from ¥71K/ton to ¥73K/ton; Hot rolled coil prices raised from ¥58K/ton to ¥60K/ton
- (AU) Newcastle Coal Exports in week ended Mar 19th w/w: -43 v -5.4% prior
- (CN) China fuel prices may be increased by CNY700/ton - Chinese press
- (IQ) Iraq has diversified its crude shipment options by moving some export capacity away from Strait of Hormuz

Asian Market Update: Risk returns to the markets and fears ease over China slowdown

(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE RANGE UNCHANGED BETWEEN 0.0% TO 0.10%, AS EXPECTED; NO NEW MONETARY EASING ANNOUNCED >- (AU) AUSTRALIA JAN HOME LOANS M/M: -1.2% V -0.6%E (first decline in 10 months); INVESTMENT LENDING: -7.1% V 7.5% PRIOR; OWNER-OCCUPIED HOME LOAN VALUE: 0.1% V 2.0% PRIOR
- (AU) AUSTRALIA FEB NAB BUSINESS CONDITIONS: 3 V 2 PRIOR; NAB BUSINESS CONFIDENCE: 1 V 4 PRIOR (5-month low)
- (UK) UK FEB RICS HOUSE PRICE BALANCE: -13% V -14%E (19-month high)
- (JP) JAPAN JAN TERTIARY INDUSTRY INDEX M/M: -1.7% V +0.2%E (10-month low)
- (NZ) NEW ZEALAND FEB QV HOUSE PRICES Y/Y: 2.9% V 2.7% PRIOR (17-month high) >- (NZ) NEW ZEALAND FEB FOOD PRICES M/M: 0.6% V 0.0% PRIOR (7-month high)
- (PH) PHILIPPINES JAN TOTAL EXPORTS Y/Y: 3.0% V -18.5%E; TOTAL MONTHLY EXPORTS: $4.1B V $3.3B PRIOR
- (PH) Philippines Dec Foreign Direct Investment (FDI); $43M v $366M prior
- (AR) Argentina Feb Trade Balance: $1.3B v $550M prior
- (NZ) New Zealand Feb REINZ house Price Index m/m: +0.8% v -1.4% prior (3-month high); House Sales y/y: 37.0% v 25.2% prior
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 +0.9%
- S&P/ASX +1.1%
- Kospi +1.3%
- Taiwan Taiex +1.4%
- Singapore Straits Times +0.8%
- Shanghai Composite +0.3%
- Hang Seng +1.3%
- S&P Futures +0.5% at 1,379
- April gold +0.3% at $1,704/oz
- April Crude +0.6% at $106.99
***Overview/Top Headlines***
- Markets saw a return of risk appetite today, ahead of US Fed policy meeting and key ZEW data from Germany. One of the major investment banks raised its 2012 GDP estimate on China, despite China itself lower its own estimate last week. Commodities were all stronger with silver and copper contracts both up over 0.8% to $33.69 and $3.86 respectively. In a Greece debt analysis report it saw debt-GDP ratio falling well below 120% by 2020 target if debt swap participation rose above 96%. EU's Juncker said he does not expect Greece to require a third bailout; A successful debt exchange will cut Greece debt to 117% of GDP in 2020. He also noted that the budget plan for Belgium could be evaluated in the coming days. It was also announced that Spain has agreed to an additional deficit cut of 0.5% of GDP beyond what has been announced. Reminder on March 2nd following the EU Leader Summit Spain PM Rajoy announced that Spain revised its 2012 deficit-to-GDP ratio higher to 5.8% from 4.4% prior target but did maintain 2013 deficit-to-GDP target of 3.0%. Rajoy stated at the time of the declaration: "This was a sovereign decision made by Spain.." EUR/USD held some mild strength in the session gaining about 0.1% which was similar for the pound and Swiss franc.
- The Bank of Japan leaves the target rate unchanged between 0.0 to 0.1%, as expected. However the BoJ did increase the size of loan scheme targeting growth sectors by ¥2T to ¥5.5T. Announces dollar denominated growth loans worth ¥1T and also said they would introduce loans worth ¥500B for small lot investments. Board member Miyao proposed increasing asset buying and loan scheme by ¥5T, proposal was rejected 8 to 1. As expected the volume of asset purchases unchanged at ¥65T. USD/JPY fell over 0.3% to around the ¥81 level. EUR/JPY also fell 0.3% to ¥107.95. In New Zealand economic data showed that both housing and food prices are rising, the NZD/USD gained half a percent $0.8221.
***Speakers/Geopolitical/In the press***
- (KR) Korea govt may issue credit cards offering oil tax rebates if global oil prices rise above $130/brl - Korean press
- (CN) S&P: China banks should be able to overcome any slump, performance will moderate in 2012 but stay healthy
- (KR) South Korea Fin Min Bahk: Reiterates rising oil prices and a possible slowdown in China are risks to South Korea
- (JP) Japan cabinet expected to approve consumption tax increase plans on Mar 23rd before submitting to Diet - Japan press
- (US) Fed criteria for latest round of stress tests to include unemployment rate as high as 13%, equity price decline of 50%, and housing price decline of 21%; Results will be released on Thur, Mar 15th at 16:30ET - financial press
***Equities***
- China Overseas Land, 688.HK: Reports Feb property sales HK$13.1B, +209% y/y
- Mongolian Mining Corp, 975.HK: China coking coal demand will increase 2-3% in 2012
- CHT: Reports Feb net NT$2.9B v NT$3.3B m/m; Rev NT$15.5B v $16.8B y/y
- MF: Customers reportedly have received offers for claims and will receive nearly all of the missing $1.6B in funds back - NYT Dealbook
- NEC, 6701.JP: Aims to raise its infrastructure business sales by 50% to ¥500B in the next 4-5 years - Nikkei News
- Cathay Financial, 2882.TW: In talks with larger Chinese banks of a cross stake agreement - Taiwan press
- HBC: Will focus on six core and 2 strategic markets in Asia outside of Hong Kong and sell or close retail operations in another 7 countries - FT
***FX/Fixed Income/Commodities***
- (TW) Taiwan sells 20-Year Bonds; Yield 1.708% v 1.733% prior
- (CN) PBoC offers CNY66B 28-day repos at 2.8% v 2.8% prior; does not sell bills
- (CN) China may raise fuel prices this week - Chinese press

FOREX NEWS - euro up on Greek relief; China, U.S. data next

* Greece optimism underpins euro, high-beta currencies
* Athens secures strong support for debt swap deal
* China inflation, U.S. jobs data next in focus
By Ian Chua
SYDNEY, March 9 (Reuters) - The euro and commodity currencies held on to overnight gains in Asia on Friday after Greece moved closer to securing fresh funds needed to avoid a messy debt default.
But further gains will depend on China's consumer inflation data due around 0130 GMT and industrial output at 0530 GMT, which could either support or undermine the improving risk sentiment.
The single currency stood at $1.3274, having risen some 1 percent on Thursday after Greece looked close to getting 95 percent agreement on its bond swap offer to private creditors to lighten its debt burden.
This saw the greenback fall to its lowest level this week against a basket of major currencies. The greenback though, managed to rise against the safe-haven yen, climbing to 81.55 from Thursday's low of 81.06.
Preliminary results of Greece's bond swap offer are expected to be announced officially at 0600 GMT, before a conference call with euro zone finance ministers in the afternoon.
It was not yet clear whether Greece could avoid enforcing the exchange on recalcitrant holdouts, which would mean the outcome would not trigger payouts on credit default swaps.
The euro was on track to end the week in positive territory, having recouped all its mid-week losses, when doubts of a Greek swap deal had sapped risk appetite.
Support for the single currency is seen at the 55-day moving average at $1.3081, with resistance pegged around $1.3335, the 61.8 percent retracement of the Feb 29 to March 7 fall.
Also helping the euro were comments from the European Central Bank, which gave a surprise warning on inflation, suggesting further policy easing was unlikely.
Along with the euro, commodity currencies also gained ground. The Australian dollar fetched $1.0641, well off the previous session's low of $1.0531. Data on Thursday showing a surprise fall in employment is now firmly in the rear-view mirror.
U.S. jobs data due late on Friday will also be closely watched, especially after the Wall Street Journal reported earlier in the week that Federal Reserve officials were considering sterilised quantitative easing to further help the economic recovery.
An outcome that bolsters such expectations could be the dollar's undoing.
"Our long-term view is still that the EUR/USD will be higher and the relative hawkishness of comments from ECB President Mario Draghi is a reminder that at its heart, the ECB 'wants' to normalise policy while Ben Bernanke 'wants' to buy more protection against disaster," said Kit Juckes, strategist at Societe Generale.
© Thomson Reuters 2011. All rights reserved.
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TradeTheNews.com Asian Market Update: Australia trade plummets to deficit; China CPI, manufacturing softer; Optimism on Greece PSI, US NFP boost sentiment

(AU) AUSTRALIA JAN TRADE BALANCE (A$): -673M V +1.50BE (first deficit since Feb 2011; widest deficit since Mar 2010) - (CN) CHINA FEB PRODUCER PRICE INDEX (PPI): Y/Y: 0.0% V 0.1%E (7th consecutive decline and a 27-month low)

- (CN) CHINA FEB CONSUMER PRICE INDEX (CPI) Y/Y: 3.2% V 3.4%E (20-month low); M/M: -0.1% v +1.5% prior
- (CN) CHINA JAN/FEB INDUSTRIAL PRODUCTION Y/Y: 11.4% V 12.5%E (lowest since Jul 2009)
- (CN) CHINA JAN/FEB RETAIL SALES Y/Y: 14.7% V 17.4%E (matches 33-month low)
- (CN) CHINA JAN/FEB FIXED URBAN ASSETS Y/Y: 21.5% V 20.5%E; (multi-year low)
- (JP) JAPAN FEB MONEY SUPPLY M2 Y/Y: 2.9% V 3.0%E (4-month low); M3 Y/Y: 2.5% v 2.6%E
- (NZ) NEW ZEALAND FEB NZ CARD SPENDING RETAIL M/M: -0.7% V 0.1%E; TOTAL M/M: -0.3% V 0.1%E
- (KR) South Korea Feb Producer Price Index (PPI): 3.5% v 3.4% prior
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE LEFT UNCHANGED AT 4.25%, AS EXPECTED
- NPD: Feb video Games sales $1.06BM v $1.33B y/y
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +2.2%
- S&P/ASX +1.0%
- Kospi +0.9%
- Taiwan Taiex +0.4%
- Shanghai Composite +0.4%
- Hang Seng +1.1%
- S&P Futures +0.1% at 1,368
- April gold +0.4% at $1,705/oz
- April Crude +0.4% at $106.98
***Overview/Top Headlines***
- Asian equity markets are all in positive territory as investors shrug disappointing economic data out of China and Australia. Instead, the focus is squarely on expectations for (yet another) resolution in Athens. Financial press has been abuzz with speculation of a strong participation by the private sector in the bond swap, forecasting that PSI could be in the mid-90s if collective action clause (CAC) is invoked on holdouts. Nikkei225 is biggest gainer at nearly 2% boosted by further Yen weakness, as USD/JPY hit a new 9-month high around ¥81.90. Japan's main index topped 10K for the first time since August. Ahead of the Greece PSI announcement, IMF chief Lagarde appeared optimistic that the swap would go through.
- Economic data out of China was soft across the board, with multi-month lows in CPI, industrial production, and retail sales. Analysts appear to be quick to dismiss the data to seasonality of the Lunar New Year, deferring to March results for clearer evidence of a slowdown. There is also persistent chatter that the latest data could spur more easing by the PBoC. Trade results out of Australia cast a similarly long shadow over China economic activity. Jan Trade balance fell into a deficit for the first time since Feb of last year as exports fell 8% m/m. Macquarie economists acknowledge that weak exports "raise questions about our over-reliance on the mining sector and high commodity prices", while JPMorgan research also points to Lunar New Year seasonality distorting China demand. Note that the China exports component of the Australia trade data fell by double digits to A$5.16B v A$6.90B prior.
***Speakers/Geopolitical/In the press***
- (JP) Japan Econ Min Furukawa: BOJ will continue to support economy with easy policy; Need to remain cautious on Greece following debt swap
- (JP) Japan Fin Min Azumi: Recent BOJ easing has had a positive impact on equities and JPY; Expects BOJ to continue to take appropriate measures
- (CN) PBoC Advisor Liu Guisheng: Debt accrued by China's local govts is controllable
- (KR) According to Korea International Trade Association (KITA), South Korea growth will be affected by China's reduction of its official GDP target - Korean press
***Equities***
- Mitsubishi Corp: EVP: Expects to meet FY12/13 net profit target of ¥500B despite slowing demand from China - Nikkei News interview
- Honda, Suzuki, and Mitsubishi Motors' Jan-Feb sales in China saw y/y declines - Nikkei News
- RENN: Reports Q4 $0.04 v $0.02e, R$32.8M v $32Me
- GNS.AU: Trading halted; In talks with investors regarding an equity raise
- DB: Took about €5-10B in loans as part of ECB lending program last week - US financial press
US equities:
- ARO: Reports Q4 $0.44 (adj) v $0.38e, R$808.4M v $804Me; Guides Q1 $0.08-0.10 v $0.12e; -3.4% afterhours - TXN: Mid-quarter update: Guides Q4 $0.15-0.19 (incl $0.10 in charges) v $0.31e, R$2.99-3.11B v $3.2Be; -1.0% afterhours
- SBUX: Unveils Verismo, a new at-home single cup offering system, to be available in fall 2012; +3.6% afterhours (GMCR: -15% afterhours)
***FX/Fixed Income/Commodities***
- USD/JPY: Extends gains above ¥81.87; New 9-month high; Nikkei225 rises above 10,000 for the first time since Aug 2011
- US Treasury Sec Geithner: A gradual appreciation of the Chinese Yuan assists competitiveness; US can afford to extend middle class tax cut beyond 2012
- (NZ) HSBC FX analysts see significant downside risks due to "extreme valuation" in NZD - financial press
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(AU) AUSTRALIA JAN TRADE BALANCE (A$): -673M V +1.50BE (first deficit since Feb 2011; widest deficit since Mar 2010) >- (CN) CHINA FEB PRODUCER PRICE INDEX (PPI): Y/Y: 0.0% V 0.1%E (7th consecutive decline and a 27-month low)
- (CN) CHINA FEB CONSUMER PRICE INDEX (CPI) Y/Y: 3.2% V 3.4%E (20-month low); M/M: -0.1% v +1.5% prior
- (CN) CHINA JAN/FEB INDUSTRIAL PRODUCTION Y/Y: 11.4% V 12.5%E (lowest since Jul 2009)
- (CN) CHINA JAN/FEB RETAIL SALES Y/Y: 14.7% V 17.4%E (matches 33-month low)
- (CN) CHINA JAN/FEB FIXED URBAN ASSETS Y/Y: 21.5% V 20.5%E; (multi-year low)
- (JP) JAPAN FEB MONEY SUPPLY M2 Y/Y: 2.9% V 3.0%E (4-month low); M3 Y/Y: 2.5% v 2.6%E
- (NZ) NEW ZEALAND FEB NZ CARD SPENDING RETAIL M/M: -0.7% V 0.1%E; TOTAL M/M: -0.3% V 0.1%E
- (KR) South Korea Feb Producer Price Index (PPI): 3.5% v 3.4% prior
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE LEFT UNCHANGED AT 4.25%, AS EXPECTED
- NPD: Feb video Games sales $1.06BM v $1.33B y/y
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +2.2%
- S&P/ASX +1.0%
- Kospi +0.9%
- Taiwan Taiex +0.4%
- Shanghai Composite +0.4%
- Hang Seng +1.1%
- S&P Futures +0.1% at 1,368
- April gold +0.4% at $1,705/oz
- April Crude +0.4% at $106.98
***Overview/Top Headlines***
- Asian equity markets are all in positive territory as investors shrug disappointing economic data out of China and Australia. Instead, the focus is squarely on expectations for (yet another) resolution in Athens. Financial press has been abuzz with speculation of a strong participation by the private sector in the bond swap, forecasting that PSI could be in the mid-90s if collective action clause (CAC) is invoked on holdouts. Nikkei225 is biggest gainer at nearly 2% boosted by further Yen weakness, as USD/JPY hit a new 9-month high around ¥81.90. Japan's main index topped 10K for the first time since August. Ahead of the Greece PSI announcement, IMF chief Lagarde appeared optimistic that the swap would go through.
- Economic data out of China was soft across the board, with multi-month lows in CPI, industrial production, and retail sales. Analysts appear to be quick to dismiss the data to seasonality of the Lunar New Year, deferring to March results for clearer evidence of a slowdown. There is also persistent chatter that the latest data could spur more easing by the PBoC. Trade results out of Australia cast a similarly long shadow over China economic activity. Jan Trade balance fell into a deficit for the first time since Feb of last year as exports fell 8% m/m. Macquarie economists acknowledge that weak exports "raise questions about our over-reliance on the mining sector and high commodity prices", while JPMorgan research also points to Lunar New Year seasonality distorting China demand. Note that the China exports component of the Australia trade data fell by double digits to A$5.16B v A$6.90B prior.

***Speakers/Geopolitical/In the press***
- (JP) Japan Econ Min Furukawa: BOJ will continue to support economy with easy policy; Need to remain cautious on Greece following debt swap
- (JP) Japan Fin Min Azumi: Recent BOJ easing has had a positive impact on equities and JPY; Expects BOJ to continue to take appropriate measures
- (CN) PBoC Advisor Liu Guisheng: Debt accrued by China's local govts is controllable
- (KR) According to Korea International Trade Association (KITA), South Korea growth will be affected by China's reduction of its official GDP target - Korean press

***Equities***
- Mitsubishi Corp: EVP: Expects to meet FY12/13 net profit target of ¥500B despite slowing demand from China - Nikkei News interview
- Honda, Suzuki, and Mitsubishi Motors' Jan-Feb sales in China saw y/y declines - Nikkei News
- RENN: Reports Q4 $0.04 v $0.02e, R$32.8M v $32Me
- GNS.AU: Trading halted; In talks with investors regarding an equity raise
- DB: Took about €5-10B in loans as part of ECB lending program last week - US financial press
US equities:
- ARO: Reports Q4 $0.44 (adj) v $0.38e, R$808.4M v $804Me; Guides Q1 $0.08-0.10 v $0.12e; -3.4% afterhours >- TXN: Mid-quarter update: Guides Q4 $0.15-0.19 (incl $0.10 in charges) v $0.31e, R$2.99-3.11B v $3.2Be; -1.0% afterhours
- SBUX: Unveils Verismo, a new at-home single cup offering system, to be available in fall 2012; +3.6% afterhours (GMCR: -15% afterhours)

***FX/Fixed Income/Commodities***
- USD/JPY: Extends gains above ¥81.87; New 9-month high; Nikkei225 rises above 10,000 for the first time since Aug 2011
- US Treasury Sec Geithner: A gradual appreciation of the Chinese Yuan assists competitiveness; US can afford to extend middle class tax cut beyond 2012
- (NZ) HSBC FX analysts see significant downside risks due to "extreme valuation" in NZD - financial press

FOREX NEWS - euro to Greek relief; China, US data next

B. Greece optimism supports euro, high beta currencies
B. Athens assures strong support for debt-swap deal
China inflation, jobs U.S. data to continue in focus
(SYDNEY, March 9, Reuters) - the euro and commodity currencies are stopped on overnight gains in Asia on Friday after Greece closer advanced, to avoid messy debt default to secure the fresh funds.
But further gains depends on China's consumer inflation data due around 0130 GMT and industrial output at 0530 GMT, which could either support or undermine risk improve mood.
The single currency was at $1.3274, that about 1 percent saw increased, on Thursday after Greece close to 95 percent approval on its bond swap offer to private creditors, to ease its debt burden.
This saw currencies fall to its lowest level of the greenback this week against a basket of the most important. But managed to rise the greenback to the yen safe harbour, rock climbing, 81.55 Thursday deeply of 81.06.
Preliminary results of the Greece bond swap offer are expected to be at 0600 GMT, before a telephone conference with Finance Minister euro zone in the afternoon officially announced.
It was not yet clear whether Greece could avoid the implementation of Exchange on a recalcitrant holdout, which would mean that the result would trigger not payouts on credit default swaps.
The week in positive territory, the euro was on track until the end, recouped losses all its mid of week, if doubts had undermined a Greek swap deal risk-taking.
During the 55-day moving average at $1.3081, with resistance coupled to $1.3335, 61.8% retracement Feb 29 to March 7 fall seen support for the single currency.
Help also the euro were comments from the European Central Bank, gave a surprise warning on inflation, further suggested the political loosening was unlikely.
Together with the euro commodity currencies also ground won. The Australian dollar fetched $1.0641, well from the previous session low of $1.0531. data on Thursday a surprise fall in employment show is now firmly in the rearview mirror.
U.S. jobs will be observed exactly data due late on Friday, especially after the Wall Street Journal already in the week, the Federal Reserve officials thought about sterilized quantitative easing to further help the economic recovery.
A result that strengthens such expectations could become the dollar's undoing.
"Our long-term view is still that EUR/USD will be higher and the relative Hawkishness of comments by ECB Chairman Mario Draghi is a reminder that in his heart, the ECB 'wants' to normalize policy, while Ben Bernanke ' ', wants more protection against disasters, to buy", said Kit Juckes, strategist at Société Générale.

TradeTheNews.com Asian market update: Australia crashes trade deficit; China CPI, producing softer; Optimism on Greece PSI, US NFP boost mood

(AU) AUSTRALIA JAN TRADE BALANCE (A$): -673M V +1.50BE (first deficit since Feb 2011; widest deficit since Mar 2010) - (CN) CHINA FEB PRODUCER PRICE INDEX (PPI): Y/Y: 0.0% V 0.1%E (7th consecutive decline and a 27-month low)

- (CN) CHINA FEB CONSUMER PRICE INDEX (CPI) Y/Y: 3.2% V 3.4%E (20-month low); M/M: -0.1% v +1.5% prior
- (CN) CHINA JAN/FEB INDUSTRIAL PRODUCTION Y/Y: 11.4% V 12.5%E (lowest since Jul 2009)
- (CN) CHINA JAN/FEB RETAIL SALES Y/Y: 14.7% V 17.4%E (matches 33-month low)
- (CN) CHINA JAN/FEB FIXED URBAN ASSETS Y/Y: 21.5% V 20.5%E; (multi-year low)
- (JP) JAPAN FEB MONEY SUPPLY M2 Y/Y: 2.9% V 3.0%E (4-month low); M3 Y/Y: 2.5% v 2.6%E
- (NZ) NEW ZEALAND FEB NZ CARD SPENDING RETAIL M/M: -0.7% V 0.1%E; TOTAL M/M: -0.3% V 0.1%E
- (KR) South Korea Feb Producer Price Index (PPI): 3.5% v 3.4% prior
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE LEFT UNCHANGED AT 4.25%, AS EXPECTED
- NPD: Feb video Games sales $1.06BM v $1.33B y/y
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +2.2%
- S&P/ASX +1.0%
- Kospi +0.9%
- Taiwan Taiex +0.4%
- Shanghai Composite +0.4%
- Hang Seng +1.1%
- S&P Futures +0.1% at 1,368
- April gold +0.4% at $1,705/oz
- April Crude +0.4% at $106.98
***Overview/Top Headlines***
- Asian equity markets are all in positive territory as investors shrug disappointing economic data out of China and Australia. Instead, the focus is squarely on expectations for (yet another) resolution in Athens. Financial press has been abuzz with speculation of a strong participation by the private sector in the bond swap, forecasting that PSI could be in the mid-90s if collective action clause (CAC) is invoked on holdouts. Nikkei225 is biggest gainer at nearly 2% boosted by further Yen weakness, as USD/JPY hit a new 9-month high around ¥81.90. Japan's main index topped 10K for the first time since August. Ahead of the Greece PSI announcement, IMF chief Lagarde appeared optimistic that the swap would go through.
- Economic data out of China was soft across the board, with multi-month lows in CPI, industrial production, and retail sales. Analysts appear to be quick to dismiss the data to seasonality of the Lunar New Year, deferring to March results for clearer evidence of a slowdown. There is also persistent chatter that the latest data could spur more easing by the PBoC. Trade results out of Australia cast a similarly long shadow over China economic activity. Jan Trade balance fell into a deficit for the first time since Feb of last year as exports fell 8% m/m. Macquarie economists acknowledge that weak exports "raise questions about our over-reliance on the mining sector and high commodity prices", while JPMorgan research also points to Lunar New Year seasonality distorting China demand. Note that the China exports component of the Australia trade data fell by double digits to A$5.16B v A$6.90B prior.
***Speakers/Geopolitical/In the press***
- (JP) Japan Econ Min Furukawa: BOJ will continue to support economy with easy policy; Need to remain cautious on Greece following debt swap
- (JP) Japan Fin Min Azumi: Recent BOJ easing has had a positive impact on equities and JPY; Expects BOJ to continue to take appropriate measures
- (CN) PBoC Advisor Liu Guisheng: Debt accrued by China's local govts is controllable
- (KR) According to Korea International Trade Association (KITA), South Korea growth will be affected by China's reduction of its official GDP target - Korean press
***Equities***
- Mitsubishi Corp: EVP: Expects to meet FY12/13 net profit target of ¥500B despite slowing demand from China - Nikkei News interview
- Honda, Suzuki, and Mitsubishi Motors' Jan-Feb sales in China saw y/y declines - Nikkei News
- RENN: Reports Q4 $0.04 v $0.02e, R$32.8M v $32Me
- GNS.AU: Trading halted; In talks with investors regarding an equity raise
- DB: Took about €5-10B in loans as part of ECB lending program last week - US financial press
US equities:
- ARO: Reports Q4 $0.44 (adj) v $0.38e, R$808.4M v $804Me; Guides Q1 $0.08-0.10 v $0.12e; -3.4% afterhours - TXN: Mid-quarter update: Guides Q4 $0.15-0.19 (incl $0.10 in charges) v $0.31e, R$2.99-3.11B v $3.2Be; -1.0% afterhours
- SBUX: Unveils Verismo, a new at-home single cup offering system, to be available in fall 2012; +3.6% afterhours (GMCR: -15% afterhours)
***FX/Fixed Income/Commodities***
- USD/JPY: Extends gains above ¥81.87; New 9-month high; Nikkei225 rises above 10,000 for the first time since Aug 2011
- US Treasury Sec Geithner: A gradual appreciation of the Chinese Yuan assists competitiveness; US can afford to extend middle class tax cut beyond 2012
- (NZ) HSBC FX analysts see significant downside risks due to "extreme valuation" in NZD - financial press


(AU) AUSTRALIA JAN TRADE BALANCE (A$): -673M V +1.50BE (first deficit since Feb 2011; widest deficit since Mar 2010) >- (CN) CHINA FEB PRODUCER PRICE INDEX (PPI): Y/Y: 0.0% V 0.1%E (7th consecutive decline and a 27-month low)
- (CN) CHINA FEB CONSUMER PRICE INDEX (CPI) Y/Y: 3.2% V 3.4%E (20-month low); M/M: -0.1% v +1.5% prior
- (CN) CHINA JAN/FEB INDUSTRIAL PRODUCTION Y/Y: 11.4% V 12.5%E (lowest since Jul 2009)
- (CN) CHINA JAN/FEB RETAIL SALES Y/Y: 14.7% V 17.4%E (matches 33-month low)
- (CN) CHINA JAN/FEB FIXED URBAN ASSETS Y/Y: 21.5% V 20.5%E; (multi-year low)
- (JP) JAPAN FEB MONEY SUPPLY M2 Y/Y: 2.9% V 3.0%E (4-month low); M3 Y/Y: 2.5% v 2.6%E
- (NZ) NEW ZEALAND FEB NZ CARD SPENDING RETAIL M/M: -0.7% V 0.1%E; TOTAL M/M: -0.3% V 0.1%E
- (KR) South Korea Feb Producer Price Index (PPI): 3.5% v 3.4% prior
- (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE LEFT UNCHANGED AT 4.25%, AS EXPECTED
- NPD: Feb video Games sales $1.06BM v $1.33B y/y
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +2.2%
- S&P/ASX +1.0%
- Kospi +0.9%
- Taiwan Taiex +0.4%
- Shanghai Composite +0.4%
- Hang Seng +1.1%
- S&P Futures +0.1% at 1,368
- April gold +0.4% at $1,705/oz
- April Crude +0.4% at $106.98
***Overview/Top Headlines***
- Asian equity markets are all in positive territory as investors shrug disappointing economic data out of China and Australia. Instead, the focus is squarely on expectations for (yet another) resolution in Athens. Financial press has been abuzz with speculation of a strong participation by the private sector in the bond swap, forecasting that PSI could be in the mid-90s if collective action clause (CAC) is invoked on holdouts. Nikkei225 is biggest gainer at nearly 2% boosted by further Yen weakness, as USD/JPY hit a new 9-month high around ¥81.90. Japan's main index topped 10K for the first time since August. Ahead of the Greece PSI announcement, IMF chief Lagarde appeared optimistic that the swap would go through.
- Economic data out of China was soft across the board, with multi-month lows in CPI, industrial production, and retail sales. Analysts appear to be quick to dismiss the data to seasonality of the Lunar New Year, deferring to March results for clearer evidence of a slowdown. There is also persistent chatter that the latest data could spur more easing by the PBoC. Trade results out of Australia cast a similarly long shadow over China economic activity. Jan Trade balance fell into a deficit for the first time since Feb of last year as exports fell 8% m/m. Macquarie economists acknowledge that weak exports "raise questions about our over-reliance on the mining sector and high commodity prices", while JPMorgan research also points to Lunar New Year seasonality distorting China demand. Note that the China exports component of the Australia trade data fell by double digits to A$5.16B v A$6.90B prior.

***Speakers/Geopolitical/In the press***
- (JP) Japan Econ Min Furukawa: BOJ will continue to support economy with easy policy; Need to remain cautious on Greece following debt swap
- (JP) Japan Fin Min Azumi: Recent BOJ easing has had a positive impact on equities and JPY; Expects BOJ to continue to take appropriate measures
- (CN) PBoC Advisor Liu Guisheng: Debt accrued by China's local govts is controllable
- (KR) According to Korea International Trade Association (KITA), South Korea growth will be affected by China's reduction of its official GDP target - Korean press

***Equities***
- Mitsubishi Corp: EVP: Expects to meet FY12/13 net profit target of ¥500B despite slowing demand from China - Nikkei News interview
- Honda, Suzuki, and Mitsubishi Motors' Jan-Feb sales in China saw y/y declines - Nikkei News
- RENN: Reports Q4 $0.04 v $0.02e, R$32.8M v $32Me
- GNS.AU: Trading halted; In talks with investors regarding an equity raise
- DB: Took about €5-10B in loans as part of ECB lending program last week - US financial press
US equities:
- ARO: Reports Q4 $0.44 (adj) v $0.38e, R$808.4M v $804Me; Guides Q1 $0.08-0.10 v $0.12e; -3.4% afterhours >- TXN: Mid-quarter update: Guides Q4 $0.15-0.19 (incl $0.10 in charges) v $0.31e, R$2.99-3.11B v $3.2Be; -1.0% afterhours
- SBUX: Unveils Verismo, a new at-home single cup offering system, to be available in fall 2012; +3.6% afterhours (GMCR: -15% afterhours)

***FX/Fixed Income/Commodities***
- USD/JPY: Extends gains above ¥81.87; New 9-month high; Nikkei225 rises above 10,000 for the first time since Aug 2011
- US Treasury Sec Geithner: A gradual appreciation of the Chinese Yuan assists competitiveness; US can afford to extend middle class tax cut beyond 2012
- (NZ) HSBC FX analysts see significant downside risks due to "extreme valuation" in NZD - financial press

TradeTheNews.com Asian Market Update: Keine harte Landung in China, während Australiens Zweiklassen-Wirtschaft weiterhin ihr hässliches Haupt hinten

- (CN) CHINA FEB HSBC MANUFACTURING PMI: 49.6 V 48.8 PRIOR (4th consecutive contraction; 4-month high) >- (CN) CHINA FEB PMI MANUFACTURING: 51.0 V 50.9E (5-month high, 3rd consecutive increase)
- (AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE Q/Q: -0.3% V +3.8%E (6-quarter low)
- (AU) AUSTRALIA JAN BUILDING APPROVALS M/M: 0.9% V 2.0%E; Y/Y: -14.6% V -13.7%E
- (NZ) NEW ZEALAND Q4 TERMS OF TRADE INDEX Q/Q: -1.4% V -1.9%E (2-year low)
- (KR) SOUTH KOREA FEB EXTERNAL TRADE BALANCE: $2.2B V $1.3BE
- (JP) JAPAN Q4 CAPITAL SPENDING Q/Q: +7.6% V -6.5%E (biggest rise since Q1 of 2007); EX-SOFTWARE Q/Q: 4.9% V -7.4%E >- (TW) TAIWAN FEB HSBC MANUFACTURING PMI: 52.7 V 48.9 PRIOR (1st increase since May 2011)
- (TH) THAILAND FEB CONSUMER PRICE INDEX (CPI) M/M: 0.4% V 0.5%E; Y/Y: 3.4% V 3.5%E; CORE Y/Y: 2.7% V 2.8%E
- (ID) INDONESIA JAN TRADE BALANCE: $920M V $446ME; Exports y/y: 6.1% v 15.2%e; Imports y/y: 16.0% v 28.8%e
- (ID) INDONESIA FEB INFLATION M/M: 0.1% V 0.3%E; Y/Y: 3.6% V 3.8%E; CORE Y/Y: 4.3% V 4.3%E
- (JP) JAPAN JAN LOANS & DISCOUNTS CORP Y/Y: 0.0% V 0.0% PRIOR
- (AU) AUSTRALIA JAN RPDATA-RISMARK HOUSE PX RAW: 0.8% V -1.0% PRIOR
- (AU) AUSTRALIA FEB AIG PERFORMANCE OF MANUFACTURING INDEX: 51.3 V 51.6 PRIOR
- (IN) INDIA JAN TRADE BALANCE: -$14.8B V -$14.7B PRELIM; Exports y/y: 10.1% v 6.7% prior; Imports y/y: 20.3% v 19.8% prior
- (JP) JAPAN FEB VEHICLE SALES Y/Y: 31.9% V 40.7% PRIOR
- (IN) INDIA FEB MARKIT MANUFACTURING PMI: 56.6 V 57.5 PRIOR
- (RU) RUSSIA FEB HSBC MANUFACTURING PMI: 50.7 V 50.8 PRIOR
- (HK) Hong Kong Jan Govt Monthly Budget (HKD): 43.0B v 38.3B prior
- (JP) Japan investors bought ¥1.4T in foreign bonds last week v ¥100B sold in prior week
***Markets Snapshot (as of 05:30GMT)***
- Nikkei225 -0.4%
- S&P/ASX -1.0%
- Kospi closed
- Taiwan Taiex unchanged
- Singapore Straits Times -0.1%
- Shanghai Composite unchanged
- Hang Seng -0.8%
- S&P Futures -0.2% at 1,362
- April gold +0.7% at $1,723/oz
- April Crude unchanged at $107.05
***Overview/Top Headlines***
- Markets were broadly weaker though fairly stagnant for the session after the US Fed's Bernanke failed to mention another round of QE. China headline manufacturing PMI climbed for the third consecutive month and hit a 5 month high at 51. New export orders rose to 51.1 from 46.9 prior. HSBC manufacturing PMI had a four month high but stayed in contraction. However the news was fresh confirmation that China was continuing its momentum despite European woes, a slow recovery in the US and a two speed economy in Australia. LTRO in Europe topped the first round of funding with €529.5B going to EU banks v €489B in the first offering. Japan capital spending picked up in Q4, one can assume that companies are getting into the core of rebuilding after last year's disasters in the country. Terms of trade for New Zealand dipped to a two year low, NZ$ had a little strength. AUD/USD was also slightly stronger though today's weaker private capital expenditures and building approvals highlighted the two-speed economy after yesterday's more robust data. Financial press reporting on Greece indicated that a "secret panel" comprised of representatives from 15 large banks and hedge funds said to be key to Greece CDS being triggered. The group will Thursday morning to rule on whether debt restructuring will trigger CDS payments. In Shanghai the government affirmed that it would no be easing housing rules and would stick to the wider policies of the country. Shanghai Gold Exchange announced that it would increase silver margin requirements to 18% and widen the daily trading limit to 15%. Silver in the states traded up to $35.23, while its golden counterpart continued to extended its gains testing $1,725.
***Speakers/Geopolitical/In the press***
- (NZ) NZIER chief economist Eaqub: Estimates 2012 New Zealand GDP at 1.5% and 2013 at 2.4% - NZ Herald
- (CN) Shanghai Feb home prices -0.06% m/m; Beijing home prices -0.6% m/m - Soufun
- (US) Fed's Plosser: Bad outcomes occur when central banks lose independence; have seen "fairly substantial firming of growth" - CNBC interview
- (JP) Japan ruling party requests BoJ to increase inflation target, wants the central bank to conduct "full-scale" easing in March - financial press
- USD/CNY: (CN) China State Administration of Foreign Exchange (SAFE): Institutions and individuals in China selling more foreign currencies in Jan than purchased for the first time in 3 months - China Daily
***Equities***
- WOW.AU: Reports H1 Net A$967M v A$956Me
- CITIC Pacific, 267.HK: Reports FY11 Net profit HK$9.2B v HK$10Be; Rev HK$100.1B v HK$70.6B y/y
- Samsung Electronics, 005930.KR: May partner with Germany's BMW on car batteries - Korean press
- NHC.AU: Guides H1 Net +18-25% y/y; Terminated sales process; did not get any definitive proposal
- Hyundai Motor, 005380.KR: Sonata replaces Nissan Altima as "top pick" in US Consumer Reports "best affordable family sedan" category - Korean press
- Bank of China, 3988.HK: Forms an alliance with the CME on yuan futures - financial press
***FX/Fixed Income/Commodities***
- JGB: Japan MoF sells ¥2.0T in 1.0% 10-yr notes (1.0% prior), bid to cover: 3.26x v 3.72x prior
- (CN) PBoC offers CNY20B in 91-day repos; Does not sell bills
- SLV: iShares Silver Trust ETF daily holdings rise to 9,739 tons from 9,715 tons (highest since 9,743 on Dec 16th)
- GLD: SPDR Gold Trust ETF daily holdings rise by 9.1 tons to 1,293.7 tons (highest since 1,294.8 on Dec 12th)

TradeTheNews.com Asian Market Update: PBoC Zhou commits China resources to Europe; Yen weakens

- (NZ) NEW ZEALAND Q4 RETAIL SALES EX-INFLATION AND EX-AUTOS/FUEL Q/Q: 2.2% V 1.2%E >- (KR) SOUTH KOREA JAN UNEMPLOYMENT RATE: 3.2% V 3.2%E (4-month high)
- (JP) JAPAN JAN FINAL MACHINE TOOL ORDERS Y/Y: -6.9% V -6.6% PRELIM
- (JP) BANK OF JAPAN (BOJ) FEB MONTHLY REPORT: Maintains economic assessment; Japanese economy has been flat and is expected to remain so for the time being
- (SG) SINGAPORE DEC RETAIL SALES M/M: -2.4% V -0.1%E; Y/Y: 4.2% V 5.2%E; EX-AUTO Y/Y: 8.1% V 5.0%E
- (KR) SOUTH KOREA JAN EXPORT PRICE INDEX M/M: 1.1% V 0.3% PRIOR; Y/Y: 4.6% V 2.5% PRIOR; IMPORT PRICE INDEX M/M: 0.8% V 0.2% PRIOR; Y/Y: 7.9% V 7.1% PRIOR
- (NZ) NEW ZEALAND JAN NON RESIDENT BOND HOLDINGS: 59.3% V 59.1% PRIOR
- (JP) JAPAN NOV CONFERENCE BOARD LEADING ECONOMIC INDEX: -0.1% V -0.2% PRIOR
- (AU) AUSTRALIA JAN NEW MOTOR VEHICLE SALES M/M: +1.3% V -2.7% PRIOR (5-month high); Y/Y: 2.7% V -3.0% PRIOR
- (AU) AUSTRALIA FEB WESTPAC CONSUMER CONFIDENCE INDEX: 101.1 V 97.1 PRIOR
- (CL) CHILE CENTRAL BANK LEAVES NOMINAL INTEREST RATE AT 5.00%; AS EXPECTED
- (PH) PHILIPPINES DEC OVERSEAS REMITTANCES Y/Y: 6.2% V 10.6% PRIOR; OVERSEAS WORKERS REMITTANCES: $1.8B V $1.78B PRIOR
- (JP) BANK OF JAPAN (BOJ) FEB MONTHLY REPORT: Maintains economic assessment; Japanese economy has been flat and is expected to remain so for the time being.
- (NZ) New Zealand Jan Skilled Job Vacancies +0.8% m/m
***Markets Snapshot (as of 05:30GMT)***
- Nikkei225 +2.6%
- S&P/ASX +0.3%
- Kospi +1.2%
- Taiwan Taiex +1.5%
- Singapore Straits Times +0.8%
- Shanghai Composite +0.9%
- Hang Seng +2.1%
- S&P Futures +0.7% at 1,356
- April gold +0.6% at $1,728/oz
- March Crude +0.9% at $101.69
***Overview/Top Headlines***
- Markets rallied after PBoC Gov Zhou said China would expand its investments in Europe, saying that China has not cut its reserve exposure to Europe during the crisis. Zhou affirmed that China would play a bigger role in the crisis through participation in EFSF and IMF, saying it can assist through the Central Bank and sovereign wealth fund. He is hopeful that that EU can offer more attractive investment products. This is the clearest statement from a Chinese official on how it may assist the EU. Markets soared on the comments, March S&P500 futures were up over 7 handles above 1,355 on the comments. EUR/USD gained 35 pips around the $1.3165 area, EUR/JPY also gained around 35 pips to ¥103.38. Right before the US session close Greece party leaders Papandreou (PASOK) and Samaras (ND) said they would commit to austerity measures in letter to Troika to be sent tomorrow. This boosted the EUR/USD back above the $1.31 handle. Nikkei225 had a record day after the BoJ announced new easing measures yesterday. It ended at the highest close in 5-months. 5-year JGB yields fell below 0.32% as 3-month low and the 2-year note fell below 0.11% a 16-month low on the news that the additional ¥10.0T in easing would be used exclusively for JGB buying. USD/JPY hit fresh 3-month highs above ¥78.65. Copper and silver both gained over 1% while wheat and corn gained over 0.2%.
***Speakers/Geopolitical/In the press***
- (NZ) New Zealand Fin Min English: Asset sales will reduce debt, boost savings and improve company performance; Benefit budget by NZ$800M
- (AU) Australia Dept of Education, Employment and Workplace Relations leading employment indicator fell for the first time in 5 consecutive months from Jan to Feb - Australian press
- (CN) China Banking Regulatory Commission (CBRC) has asked banks for more local government financing information - China Daily
- (US) Fed's Lockhart: Monetary policy stance is appropriate for moderate growth until there is further proof of sustained improvement
***Equities***
- Samsung Electronics, 005930.KR: Considering spinning off LCD operations into its own company; Should make it more competitive - financial press
- Elpida Memory, 6665.JP: Exec: There is "uncertainty" over remaining in business because it still doesn't have the necessary financing to repay debts coming due in April - Japan press
- FMG.AU: Reports H1 Net $801M v $840Me; Rev $3.36B v $2.53B y/y
- MTR Corporation, 66.HK: Reports 350M shoppers visited its 12 malls in 2011, +40% y/y - HK press
- OZL.AU: Reports FY11 Net A$275M v A$268Me; Rev A$1.12B v A$1.1B y/y
- CBA.AU: Reports H1 Net A$3.6B v A$3.5Be
***US Equities***
- AAPL: CEO: Company is 'judicious' about how the company spends its cash [in response to question about a potential dividend] - Goldman conf; +0.4% after hours
- ZNGA: Reports Q4 $0.05 v $0.03e, R$311.2M v $301Me; -7.0% after hours
- FTI: Reports Q4 $0.41 v $0.51e, R$1.5B v $1.4Be; -3.3% after hours
- PEET: Reports Q4 $0.42 v $0.43e, R$101.6M v $103Me; -4.1% after hours
***FX/Fixed Income/Commodities***
- (US) API PETROLEUM INVENTORIES CRUDE: +2.9M V +1.5ME (largest build in 3 weeks); GASOLINE: +1.81M V +500KE; DISTILLATE: -2.16M V -1ME; UTILIZATION: 83.7% V 83.9% W/W
- USD/CNY: Pres Obama to tell visiting China Vice Premier Xi that Yuan is still undervalued - financial press
- GLD: SPDR Gold Trust ETF daily holdings fall by 0.3 tons to 1,278.3 tons (first decline since Jan 23rd)
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FOREX NEWS - Euro rises as China comments outweigh soft GDP

* Euro, riskier currencies buoyed by China comments

* Contraction in euro zone GDP could weigh in medium term

* Greek bailout uncertainty persists but markets optimistic

* Dollar hits 3-1/2 mth high vs yen after BOJ easing steps

By Nia Williams

LONDON, Feb 15 (Reuters) - The euro rose against the dollar on Wednesday after China said it would continue investing in euro zone debt, offsetting a contraction in quarterly GDP that added to concerns the currency bloc could slip into recession later in the year.

Euro zone output shrank by 0.3 percent in the fourth quarter of 2011, as forecast, and prompted little reaction in the euro. Analysts said weak European growth could weigh on the euro against the dollar more in the medium term as the U.S. economy shows signs of picking up.

The euro was last up 0.4 percent at $1.3172, retreating from a session high of $1.3191 and well off the Feb. 9 peak of $1.3322. CitiFX Wire said in a note that its traders were looking to buy on dips rather than chase the euro higher.

"The China comments have helped positive sentiment today and GDP figures were pretty much as expected so there's no huge surprise there was no massive market movement," said Nick Beecroft, senior markets consultant at Saxo Bank.

"But they are part of what will become an important story in the second quarter as reality starts to kick in terms of collapsing growth in the euro zone, which in itself hampers efforts to improve government deficits."

The Chinese central bank governor said China remains confident in the euro, helping buoy sentiment overnight, although further short-term euro gains looked dependent on whether Greek leaders signed a commitment to implement tough austerity measures.

The cancellation of Wednesday's meeting of euro zone finance ministers unnerved some investors worried about a disruption to a Greek bailout deal, but Greek conservative party leader Antonis Samaras was expected to sign a commitment to the strict austerity measures required.

Signs Greece was edging closer to a political consensus also helped support perceived riskier currencies against the safe-haven dollar and boosted European equity markets.

"This market is trading very much on risk sentiment. The China comments were good news for the European debt situation and thereby a positive for the euro," said Niels Christensen, FX strategist at Nordea.

"Regarding Greece, the general opinion is that some way or another they will reach an agreement and Greece will get its financial aid at some point. The market may be a little bit too complacent if it suddenly falls apart."

YEN WEAKNESS

The dollar outperformed the yen, hitting a 3 1/2-month high after monetary easing steps from the Bank of Japan on Tuesday triggered stop-loss buying of the greenback. It was last trading flat at 78.49 yen.

As well as the BOJ's expansion of its asset-buying scheme, Japan's shrinking current account surplus, its trade deficit and signs of economic recovery in the United States all weighed on the yen.

Dollar/yen stop loss buying by short-term accounts and Japanese importers along with an improving technical outlook suggested the dollar may extend its gains in the near term.

Traders said an obvious resistance level was the post-intervention high of 79.55 yen.

In another bullish sign, the dollar held well above strong support at its 200-day moving average, currently 78.04 yen, having closed above it for the first time since mid-April.

"There's very little upside pressure on the yen right now. Of course the euro zone can always suddenly change the landscape, but the bottom line for now is that the yen is going down," said Koji Fukaya, Credit Suisse chief currency analyst.

With the greenback under pressure against most currencies other than the yen, the dollar index fell 0.4 percent to 79.272. The risk-correlated Australian dollar rose 0.6 percent to US$1.0747.

European Market Update: German ZEW Expectations survey turns positive for the first time since May 2011; China reiterates support for Europe

 Tuesday, February 14, 2012 5:54:21 AM
 TradeTheNews.com European Market Update: German ZEW Expectations survey turns positive for the first time since May 2011; China reiterates support for Europe
***Economic Data***
- (EU) ECB: €1.1B borrowed in overnight loan facility v €1.2B prior; €510.2B parked in deposit facility vs. €507.9B prior
- (ES) Spain Jan ECB Banks Borrowings: €161.4B v €132.4B m/m
- (IN) India Jan Monthly Wholesale Prices Y/Y: 6.6% v 6.7%e
- (FI) Finland Dec Final Retail Sales Volume Y/Y: 2.1% v 1.8% prelim
- (SE) Sweden Jan PES Unemployment Rate: 4.8% v 4.9%e
- (FR) France Q4 Preliminary Non-Farm Payrolls Q/Q: -0.2% v -0.2%e; Wages Q/Q: 0.3% v 0.3% prior
- (HU) Hungary Jan Consumer Prices M/M: 2.1% v 1.7%e; Y/Y: 5.5% v 5.0%e
- (HU) Hungary Dec Final Industrial Production M/M: -7.4% v -7.4% prelim; Y/Y: -6.7% v -6.7% prelim
- (ES) Spain Dec Industrial Orders Y/Y: -4.0% v -1.6% prior
- (FR) France Jan Real Retail Sales (seasonally adj) M/M: +0.6% v +0.2% prior; Y/Y: +0.7% v -3.1% prior - Bank of France Survey
- (NL) Netherlands Dec Retail Sales: 1.0% v 1.3% prior
- (SE) Sweden Q4 Total Number of Employees Y/Y: 3.1% v 3.5% prior
- (UK) Dec DCLG UK House Prices Y/Y: +0.1% v -0.3% prior
- (UK) Jan CPI M/M: -0.5% v -0.5%e; Y/Y: 3.6% v 3.6%e; Core CPI Y/Y: 2.6% v 2.6%e - (UK) Jan RPI M/M: -0.6% v -0.4%e; Y/Y: 3.9% v 4.1%e; RPI-X Y/Y: 4.0% v 4.2%e; Retail Price Index: 238.0 v 238.4e
- (DE) Germany Feb ZEW Economic Sentiment: +5.4 v -11.8e (first positive reading since May 2011); Current Conditions: 40.3 v 30.5e
- (EU) Euro Zone Dec Industrial Production M/M: -1.1% v -1.2%e; Y/Y: -2.0% v -1.2%e
- (EU) Euro Zone Feb ZEW Economic Sentiment: -8,1 v -32.5 prior
- (GR) Greece Q4 Preliminary GDP: Y/Y: -7.0% v -5.0% prior
- (PT) Portugal Q4 Preliminary GDP Q/Q: -1.5%e v -0.6% prior; Y/Y: -2.8%e v -1.7% prior
Fixed Income - (NL) Netherlands Debt Agency (DSTA) sold €3.98B vs €3.0-4.0B indicated range in 2.5% 2017 DSL Bond; Avg Yield 1.347% v 1.777% prior
- (ES) Spain Debt Agency sold total €5.44B vs. €4.5-5.5B indicated range in 12-Month and 18-Month Bills
- Sold €2.94B in 12-month Bills; Avg Yield 1.899% v 2.049% prior; Bid-to-cover: 2.3 x v 3.55x prior; Max Yield 1.949% v 2.150% prior
- Sold €2.5B in 18-month Bills; Avg Yield 2.308% v 2.399% prior; Bid-to-cover: 2.88x v 3.23x prior; Max Yield 2.395% v 2.490% prior
- (GR) Greece Debt Agency (PDMA) sold €1.3B vs. €1.0B indicaqted in 13-week treasury bills; Avg Yield 4.61% v 4.64% prior; Bid-to-cover:2.70 x v 2.90x prior
- (IT) Italy Debt Agency (Tesoro) sold €6.0B vs. €6.0B in 2014, 2015 and 2017 Bonds
- Sold €4.0B in 6.0% Nov 2014 BTPs; Avg Yield 3.41% v 4.83% prior; Bid-to-cover: 1.40x v 1.22x prior
- Sold €687M in 3.0% Nov 2015 BTPs; Avg Yield 3.77%; Bid-to-cover: 2.37x
- Sold €1.31B in 4.0% Feb 2017 BTPs; Avg Yield 4.26% v 4.93% prior; Bid-to-cover: 1.71x v 2.3x prior****Note: -
- (EU) ECB allotted €142.8B in 7-Day Main Refinancing Tender vs. €115Be
- (EU) ECB allotted €14.3B in 1-Month Tender vs. €30.0Be
- (HU) Hungary Debt Agency (AKK) sold HUF60B in 3-Month Bills; Avg yield 7.32% v 7.32% prior; Bid-to-cover: 2.52x v 2.69x prior
- (BE) Belgium Debt Agency sold total €3.2B vs. €3.0B indicated in 3-month and 12-month Bills
- Sold €1.80B in 3-month Bills; Avg Yield 0.291% v 0.506% prior; Bid-to-cover: 2.51x v 2.70x prior
- Sold €1.41B in 12-month Bills; Avg Yield 0.892% v 1.162% prior; Bid-to-cover: 2.64x v 2.06x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Moody's downgrades 6 European sovereigns (Italy, Spain, Portugal, Slovakia, Slovenia & Malta) lowers outlook on several AAA (UK, Austria and France)
- BOJ sets an inflation target (and cranks up the printing press); Announced further easing measures (first since Oct)
- Fed's Williams (voting member): Vital to keep policy throttle wide open.
- Germany ZEW Survey registers its first positive reading since May 2011
- UK inflation data declines in Jan as expected by BOE
Equities: FTSE 100 +0.20% at 5915, DAX +0.60% at 6779, CAC-40 +0.30% at 3395, IBEX-35 +0.40% at 16,504, SMI +0.10% at 6182
- European shares traded mixed during today's session hurt by Moody's action which downgraded 6 European states, including Italy and Spain. The most worrying action for the markets is Moody's cutting UK's and France's outlook to negative from stable. However, Italy sold its debt in the indicated range. Losses were limited after Germany's ZEW increased and was a positive number, beating analysts' estimates.
- In individual names, Thyssenkrupp [TKA.DE] fell after reporting a larger than expected loss. The steel maker had already stated that Q1 EBIT would be considerably lower than last year's and was unable to give an outlook for FY12. Swedbank [SWEDA.SE] reported a lower than expected operating profit although net interest income was higher than estimates. The bank however decided to withdraw its capital targets and would decide on new ones when the situation was more stable. Among winners, MAN [MAN.DE] reported better than expected earnings.
Speakers: - China Premier Wen met key European officials in Beijing and hereiterated that China was ready to "get more involved" to help Euro debt and maintained confidence in Euro. He also hoped EU maintained its stability and prosperity and supported strengthening of fiscal discipline in Europe
- EU President Van Rompuy welcomed China's PM Wen support for Europe and noted that both regions were becoming increasingly inter-dependent. China was making progress on its CNY currency rate and rebalancing its economy. China showed "solid interest" on EFSF investment
- EU's Barroso commented from Beijing that EU was doing what was necessary to restore confidence and that the region was seeking more investment access in China
- Austria Fin Min Fekter commented that she was confident that Greece would get more help. She noted that no Austrian banks have asked for aid
- Bank of Japan Gov Shirakawa commented at his post rate decision press conference that the BOJ would not end its inflation targeting until the 1% CPI rise was in sight. He stressed that the BOJ would ensure Japan's economic recovery through its policy and that the central bank was not pressured by gov't in today's action but both did share the perspective of what is deemed as price stability. Today's decision meant buying JGBs at a faster pace
But not use JGB purchases for monetizing debt. The change in wording on prices aimed at clarifying BoJ's determination to deal with deflation.
- ZEW Economists commented after the better Feb data that the economic slowdown in Germany was unlikely to last as domestic demand expected to support economic growth. It stressed that a solution to Euro Zone crisis remained an important issue but progress with Greek creditors might have reduced uncertainty. Lastly it noted that Germany might see slight uplift in H2 2012
- ECB's Nowotny reiterated the central bank view that it did not see risk of inflation. He cautioned that Euro region needed to avoid the same fate as Japan's. The main objective was to avoid longer periods of stagnation.
- ECB's Coeure commented that the ECB should distribute profits on Greek debt to member nations who could use it to contribute to sustainability of Greek debt
- Bank of England released its inflation letter noting that inflation was falling broadly as expected and expected to hit around target of 2.0% by end of 2012. Impact of factors that pushed up inflation was now waning. CPI decline due to VAT and energy prices but cautioned that a risk of an oil shock was possible due to political tensions. Extent of CPI decline was highly uncertain with key uncertainties of wages and profit margin building. To focus on spare capacity and inflationary expectations and that the key policy outlook was the medium-term view
- France Fin Min Baroin commented on Moody's lower revision of the French sovereign outlook that the Govt will continue to seek an increase its economic growth and competitiveness. He noted that Moody's action was due to risks associated with the Euro Zone. He confirmed France 2012 GDP growth forecast of 0.5%
- Poland Fin Min Rostowski Greece's Euro exit would be less damaging at this time compared to 2011 but would pose legal obstacles. Greek default would have less impact with new EU policies because of the European Central Bank's liquidity measures. He noted that it was not clear how it would be possible for Greece to leave the euro zone under its legal system
- China State Administration of Foreign Exchange (SAFE) reiterated it stance to enhance monitoring of two-way cross-border capital flows and improve policy response to impact of capital flows.
- Turkey Econ Min Babacan commented that the country's 2011 imports came in at $240.8B and added that he was not comfortable with the level of imports
Currencies:
- The session shrugged off the initial effects of the multi-country European sovereign downgrade and revisions to AAA outlooks. The EUR/USD clawed its way from late Asian session lows of 1.3128 and moved above 1.32 handle by the NY morning following better German ZEW data and commentary of out China's Premier Wen.
- The USD/JPY was probing the upper end of its three-month range with 78.30 being the key resistance following the BOJ policy decision to set a inflation target. Some dealers noting that the continued threat of BOJ FX intervention would be more successful if enacted above the pivotal 78.30 level
- The GBP/USD recovered from its Far east session lows of 1.5686 after Moody's became the first major rating agency to cut the UK's sovereign outlook to negative. The pair was only slightly negative ahead of the NY morning at 1.5755
Political/ In the Papers:
- Portugal is to hold a fresh round of discussions with its international creditors this week before the next tranche of funds are set. Troika officials and the IMF will arrive Wednesday for a two-week review of the country. If approved, then it will be given the next tranche of €14.9B.
- The Independent looked at who could replace the current Bank of England Governor King next year when his term expires. The decision on the succession will be made by the Prime Minister, and advised by the Chancellor and the Cabinet Secretary. Note that the last two Governors were chosen from within the Bank, which places the leading internal candidate, the present deputy governor, Paul Tucker, in a strong position. Other candidates include Andy Haldane, external candidate Lord Turner, Sir John Vickers, John Varley, and former HSBC chairman Lord Green.
- The UK federation of trade unions, Trades Union Congress (TUC), released a report that finds true unemployment in the country may be as high as 6.3M, over twice the official figure of 2.68M released last month. The higher figure was found by using an American measure, which includes part-time employment due to the lack of full-time jobs, recent redundancies. TUC found that under-employment (those taking on temporary or part-time work because they cannot find permanent, full-time work) increased to 1.3M (record).
***Looking Ahead***
- (US) China Vice premier Xi Jinping will visit the White House on Feb 14th
- (IT) Italy PM Monti in Parliament
- 6:00 (BR) Brazil Dec Retail Sales M/M: 0.1%e v 1.3% prior; Y/Y: 6.0%e v 6.8% prior; Broad Retail Sales Y/Y: No est v 3.2% prior
- 6:00 (TR) Turkey to sell 10% 2013 and fixed 2022 Bonds
- 6:00 (TR) Turkey to sell 2021 Inflation Linked Bonds
- 6:30 (DE) OECD chief Gurria presents German Economic Survey in Berlin
- 7:00 (EU) ECB announces allotment in 7-Day Term Deposits to offset Govt Bond purchases
- 7:00 (IC) Iceland Jan Unemployment Rate: No est v 7.3% prior
- 7:30 (US) Jan NFIB Small Business Optimism: 95.0e v 93.8 prior
- 7:45 (US) Weekly ICSC Chain Store Sales
- 8:00 (PL) Poland Jan M3 Money Supply: -1.4%e v +3.2% prior
- 8:30 (US) Jan Import Price Index M/M: +0.3%e v -0.1% prior; Y/Y: 7.2%e v 8.5% prior - 8:30 (US) Jan Advance Retail Sales: 0.8%e v 0.1% prior; Retail Sales Less Autos: +0.5%e v -0.2% prior; Retail Sales Ex Auto & Gas: 0.5%e v 0.0% prior
- 8:45 (US) Fed's Plosser speaks on Economy in Newark, Delaware
- 8:55 (US) Weekly Redbook Retail Sales
- 9:00 (EU) Weekly ECB Forex Reserves
- 9:45 (UK) BOE to buy £1.5B in 2027-2060 Gilts in reverse auction
- 10:00 (US) Treasury Sec Geithner testifies before Senate
- 10:00 (US) Dec Business Inventories: 0.5%e v 0.3% prior
- 10:00 (MX) Mexico International Reserves w/e Feb 10th
- 10:00 (MX) Mexico Jan Vehicle Production: 211.0Ke v 180.2K prior; Vehicle Domestic Sales: No est v 115.7K prior; Vehicle Exports: No est v 171.3K prior
- 11:00 (US) Fed to purchase $4.25-5.00B in Notes
- 13:00 (US) Treasury to sell 4-Week Bills
- 16:00 (CL) Chile Central Bank Interest Rate Decision: Expected to cut the Nominal Overnight Rate Target by 13bps to 4.88%
- 16:00 (KW) South Korea Jan Export Price Index M/M: No est v 0.3% prior; Y/Y: No est v 2.5% prior
- 16:00 (KW) South Korea Jan Import Price Index M/M: No est v 0.2% prior; Y/Y: No est v 7.1% prior
- 16:30 (US) Weekly API Energy Inventories
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