South Korea cuts growth and inflation forecasts

Asian Mid-session Update: South Korea cuts growth and inflation forecasts; OPEC leaders stand firm on output volume

Economic Data

- (NZ) NEW ZEALAND Q4 WESTPAC CONSUMER CONFIDENCE: 114.8 v 116.7 PRIOR; 3rd straight decline, 7-quarter low

- (TW) TAIWAN NOV UNEMPLOYMENT RATE: 3.9% V 3.9%E

Index Snapshot (as of 03:30 GMT)

- Nikkei225 -0.11%, S&P/ASX +1.7%, Kospi +0.5%, Shanghai Composite +0.4%, Hang Seng +1.2%, Mar S&P500 +0.1% at 2,068

Commodities/Fixed Income

- Feb gold +0.2% at $1,198, Jan crude oil +1.1% at $57.78/brl, Copper -0.1% at $2.89/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 3.0 tonnes to 724.6 tonnes; first rise in a week

- SLV: iShares Silver Trust ETF daily holdings fall to 10,517 tonnes from 10,544 tonnes prior (lowest since Sept 11th)

- (JP) BOJ offers to buy ¥450B in 1-3yr JGB, ¥450B in 3-5yr JGB, ¥240B in 10-25yr JGB and ¥160B in JGB with maturity over 25-yr

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1220 v 6.1205 prior setting (weakest Yuan setting since Dec 9th)

- USD/CNY: RBS Economist Wu: Weaker CNY currency is no impediment to PBoC monetary easing if slower growth and inflation warrant such a move

- (CN) Daily Shibor fixing: 1-week: 5.7820% v 5.3670% prior (11th consecutive rise, highest since Jan 19th); 1-month: 5.9840% v 5.6855% prior (highest since Jan 28th)

Market Focal Points/Key Themes/FX

- South Korea Finance Ministry cut its 2014 GDP forecast to 3.4% from 3.7%, 2015 GDP to 3.8% from 4.0%, and 2015 CPI target from 2.3% to 2.0%. Finance Minister Choi and President Park added South Korea would maintain its expansionary macro policies, while the Finance Ministry adjusts capital control measures to curb the risk of outflows from the economy. Top authorities also outlined key risks as the Fed's rate hike in 2015, weak Yen, as well as Russia turmoil.

- OPEC officials at an Energy Conference in Abu Dhabi were steadfast in the recent decision to maintain their oil production levels in spite of the steep price decline. UAE Energy Minister said the major reason for the price slump is "irresponsible" output levels outside of OPEC, Saudi Arabia Min reiterated his country will not cut, but certainly Saudi Arabia is not cutting output, and Qatar Min added the price does not reflect the fundamentals. WTI crude prices fell about a dollar in early electronic trade in the wake of those comments before stabilizing later in the day.

- Further comments out of non-Bundesbank ECB officials reflected continued worries over low inflation in the Eurozone. ECB's Constancio said he expects to see a deflation in the coming months in part due to falling oil prices, and ECB's Coene expressed he would support sovereign bond purchases as an effective measure of stimulating economic activity and fighting downward price pressure. Single currency did not budge on the largely in-line rhetoric, trading in a 30pip range just below 1.2250. In other USD majors, USD/JPY was flat on low volume around 119.50, while AUD/USD pared initial losses to trade up to 0.8170.

Equities

US markets/ADRs:

- SPLS: Provides Update on Data Security Incident

- DAI: CFO: Company may raise final dividend for FY14; Expects better operating result vs 2013 - German press

- RDUS: Announces Phase 3 Top-Line Results for Its Investigational Drug Abaloparatide-SC in Postmenopausal Women With Severe Osteoporosis

Notable movers by sector:

- Consumer Discretionary: Kathmandu Holdings KMD.AU -20.8% (sales down y/y); Navitas NVT.AU +3.1% (refinances debt facilities); RXP Services RXP.AU -35.2% (FY15 guidance)

- Materials: Maanshan Iron & Steel 600808.CN +5.6% (CISA forecast on China steel industry profit)

- Energy: Chaowei Power Holdings 951.HK -6.2% (Guides FY14 loss); GCL-Poly 3800.HK +6.5% (terminates asset sale); PetroChina 601857.CN +%, China Oilfield 2883.HK +4.7% (WTI crude moves higher); AWE AWE.AU +5.9% (provides operation updates)

- Industrials: Worley Parsons WOR.AU +7.1% (contract extended); Transfield Services Ltd TSE.AU -5.3% (Ferrovial drops bid after Board recommends no action)

- Utilities: Datang International Power Generation 601991.CN +10.0%; Huaneng Power International 600011.CN +8.2%; SDIC Power Holdings 600886.CN +7.1% (speculation on China power reform)