Economic Data
(AU) AUSTRALIA Q3 GDP Q/Q: 0.5% V 0.6%E (3-quarter low); Y/Y: 3.1% V 3.1%E (3-quarter low)
(AU) AUSTRALIA NOV AIG PERFORMANCE OF SERVICE INDEX: 47.1 V 42.8 PRIOR (5-month high; 10th straight contraction)
(NZ) NEW ZEALAND Q3 VALUE OF ALL BUILDINGS: 9.6% V 5.5%E (biggest gain in 10 years)
(CN) CHINA NOV HSBC SERVICES PMI: 52.1 V 53.5 PRIOR (3-month low)
(KR) SOUTH KOREA NOV FOREIGN EXCHANGE RESERVES: $326.1B V $323.5B PRIOR
(PH) PHILIPPINES NOV CONSUMER PRICE INDEX (CPI) M/M: 0.1% V 0.3%E; Y/Y: 2.8% V 3.0%E; CORE CPI Y/Y: 3.4% V 3.4%E
(TW) TAIWAN NOV CPI Y/Y: 1.6% V 2.0%E; WPI Y/Y: -3.9% V -2.7%E
(HK) HONG KONG NOV PURCHASING MANAGERS INDEX: 52.2 V 50.5 PRIOR
(UK) UK NOV BRC SHOP PRICE INDEX Y/Y: 1.5% V 1.5% PRIOR
Markets Snapshot (as of 05:00 GMT)
Nikkei225 +0.5%
S&P/ASX +0.4%
Kospi +0.7%
Shanghai Composite +3.0%
Hang Seng +1.4%
Dec S&P500 +0.4% at 1,411
Feb gold +0.5% at $1,704/oz
Jan Crude Oil +0.4% at $88.88/brl
Notes/Observations
Asian equity markets are in the green across the board led by outsized gains in the China markets. Shanghai Composite started to reverse higher from multi-year lows during yesterday's afternoon session, following those gains with a 3% bounce back above the key 2,000 level today. Analysts differed on what was driving the bullish momentum with two separate stories attributed to the gains.
First, the new China govt began its first session of talks - the initial reports from Beijing suggesting the new standing committee of the politburo will turn its focus to urbanization, potentially demanding more stimulative measures such as infrastructure spending. Second, China's Insurance Regulatory Commission (CIRC) was reported to have lifted its limit on insurers to invest in banks, placing China banking sector at the forefront of today's rally
Risk-on sentiment is also boosting other indices, US futures, commodities and commodity-related currencies at the expense of USD and JPY. Hang Seng was a close second with a 1.4% jump, December S&Ps traded up as many as 7 handles above 1,412, copper hit 6-week highs above $3.68, while AUD/USD jumped within 10pips of a 2-month high. Separately, EUR/JPY was at 7-month highs near ¥108 and EUR/USD extended gains to 7-week highs above $1.31
Australia Q3 GDP was the most notable economic datapoint, coming in at 3-quarter lows on both q/q and y/y basis. The 0.1pt q/q undershoot was said to have justified the RBA rate cut overnight, as the closely tracked exports fell sharply by 4%.
Currencies/Fixed Income/Commodities
(US) API PETROLEUM INVENTORIES CRUDE: -2.22M V -500KE (largest draw since early Sept); GASOLINE: +5.7M V +2ME; DISTILLATE: +1.1M V +1ME; UTILIZATION: 89.6%
SLV: iShares Silver Trust ETF daily holdings rise to 9,790 tons from 9,757 tons (first rise since Nov 11th)
GLD: SPDR Gold Trust ETF daily holdings rise by 2.4 tons to 1,341.2 tons (record high)
(NZ) Fonterra Global Dairy Trade auction: Dairy Trade price index -2.0% (first decline since Oct auction) from prior auction on 11/20 (+0.7% prior) - update
(AU) Australia MoF (AOFM) sells A$600M in 5.5% 2023 Bonds; avg yield: 3.1514%; bid-to-cover: 3.66x
USD/CNY: (CN) China's CNY currency (Yuan) hits the upper limit of its daily 1.0% range on OTC market at 6.2242
EUR/USD: Rises to 7-week highs above $1.3110
EUR/JPY: Rises to 7-month highs above ¥107.90
AUD/USD: Extending gains above $1.0480; 1-week high
EUR/CHF: Rises to 3-month highs above CHF1.2150
Speakers/Political/In the Papers
(CN) Academy of Social Sciences (CASS) Blue Book Report: Sees 2013 GDP may grow 8.2%, Sees inflation around 3% - Chinese press
(CN) China PBoC Stats head Sheng: China 2012 inflation may be 2.6% y/y (below official 4% target) - Chinese press
(JP) BoJ Dep Gov Nishimura: BoJ to continue to pursue powerful easing measures; Sees CPI to gradually rise but such forecasts are vulnerable to external shocks; core CPI will approach 1% toward FY14.
(NZ) New Zealand Fin Min English: Sees considerable challenges in reaching FY14/15 surplus - financial press
(AU) Australia Treasurer Swan: GDP showing ongoing economy resilience; conditions remain patchy in parts
(KR) North Korea completed second-stage of its three-stage process to move its long-range rocket in position ahead of the Dec 10-22nd launch - Korean press
Equities
FMG.AU: Exec: Growth in Australia is slowing; strong demand continuing to come from China
TM: Recovery in China market could take up to a year - financial press citing union letter
NSANY: Declines in sales in China for Nissan and Honda narrowed in November, suggesting the worst of anti-Japan sentiment may be over - Nikkei News
Rakuten 4755.JP: Plans to expand in the US - Nikkei News
P: Reports Q3 $0.05 v $0.01e, R$120M v $117Me; lowers FY outlook; -18% afterhours
AVAV: Reports Q2 $0.39 v $0.21e, R$80.3M v $75Me; +9.8% afterhours
FB: To replace Infosys on the NASDAQ 100