ADB cuts Asia and China GDP forecasts

Asian Mid-session Update: ADB cuts Asia and China GDP forecasts; Japan trade deficit smaller as imports fall

Economic Data

- (JP) JAPAN NOV MERCHANDISE TRADE BALANCE: -¥892B V -¥992BE; ADJ TRADE BALANCE: -¥925B V -¥983BE

- (CN) China Dec ANZ Roy Morgan Consumer Confidence Index: 155.5 v 157.1 prior

- (AU) AUSTRALIA NOV SKILLED VACANCIES M/M: -0.8% V 0.0% PRIOR (largest decline in 16 months)

- (AU) AUSTRALIA NOV WESTPAC LEADING INDEX M/M: -0.1% V +0.1% PRIOR

- (NZ) NEW ZEALAND Q3 CURRENT ACCOUNT BALANCE (NZ$): -5.0B V -5.3BE; 2nd quarter of deficit

- (SG) SINGAPORE NOV ELECTRONIC EXPORTS Y/Y: -10.2% V -2.5%E; NON-OIL DOMESTIC EXPORTS M/M: 2.9% V 0.3%E; Y/Y: 1.6% V 3.9%E

- (KR) South Korea Nov PPI Y/Y: -0.9% v -0.8% prior; 4th month of decline

Index Snapshot (as of 03:30 GMT)

- Nikkei225 +0.5%, S&P/ASX +0.6%, Kospi +0.1%, Shanghai Composite +1.0%, Hang Seng -0.2%, Mar S&P500 +0.2% at 1,969

Commodities/Fixed Income

- Feb gold +0.3% at $1,197, Jan crude oil -1.8% at $54.93/brl, Copper -0.2% at $2.86/lb

- (US) API PETROLEUM INVENTORIES: CRUDE: +1.9M (2nd consecutive build) v -2Me, GASOLINE: +2.8M v +2Me, DISTILLATE: -1M v +1Me

- (CN) China iron ore inventory at 34 ports 99.0Mt, down from 102Mt last Friday, first time below 100Mt since Feb 14th - Chinese press

- GLD: SPDR Gold Trust ETF daily holdings fall 1.8 tonnes to 721.6 tonnes ; 1-week low

- SLV: iShares Silver Trust ETF daily holdings fall to 10,606 tonnes from 10,648 tonnes prior

- (CN) China MoF sells 10-yr bonds at 3.77% yield vs 3.75%e

- USD/CNY: (CN) PBoC sets yuan mid point 6.1137 v 6.1182 prior setting (strongest Yuan setting since Feb 19th)

- (JP) BOJ offers to buy ¥450B in 1-3yr JGB, ¥450B in 3-5yr JGB, ¥400B in 5-10yr JGB

Market Focal Points/Key Themes/FX

- Regional indices are modestly higher despite the final hour selloff on Wall St and continued uncertainty surrounding Russia, with short-covering flows heading into Wednesday's FOMC policy statement. According to some surveys, more analysts are leaning in favor of the FOMC eliminating the "considerable time" language which would likely pave the way to the first rate hike some time in Q2 of next year.

- Asia Development Bank lowered developing Asia GDP forecast to 6.1% from 6.2% prior and 2015 to 6.2% from 6.4% made in September. Unlike that last report when ADB maintained China projections, today's note also cut China 2014 GDP forecast to 7.4% from 7.5% and 2015 to 7.2% from 7.4%. India GDP forecasts were affirmed at 5.5% in 6.3% respectively. Separately in China, ANZ chief economist speculated the govt would "likely tolerate a slower growth rate in the coming years, under the framework of new normal economy and will strike a balance among social, environmental, and economic targets."

- Japan put out a lower than expected trade deficit even though exports growth of 4.9% was below 7.0% expected, as imports registered an outright contraction of 1.7% against expected rise of 1.6%. This trend could continue, as collapse in oil prices has resulted in November's 13.9% contraction in crude import volume, up from 8.8% decline in the prior month. Japan Econ Min Amari has also set out to complete emergency economic measures by around Dec 27th.

- In Australia, Westpac leading index fell and the bank also lowered its 2015 GDP target to 2.7% from 3.2%. Resident Westpac economist said this marks "the tenth consecutive month where the growth rate in the index has been below trend", adding "RBA comments are discouraging for our call for an early cut (but) we are retaining our rate call given that much can change over the next six weeks." Also down under, New Zealand Q3 Current Account deficit was smaller than expected but still marked the widest deficit in nearly 6 years. Moody's announced it's comfortable with New Zealand AAA rating despite the Finance Ministry pushing back return to budget surplus by a year yesterday. AUD/USD and NZD/USD have been under some notable pressure in today's session despite the bounce in equities, falling about 0.8% to around 0.8150 and 0.7730 respectively.

Equities

US markets/ADRs:

- ASPX: Announces Positive Topline Results From Phase 3 Registration Trial of SD-809 for Chorea Associated With Huntington's Disease; +63.4% afterhours

- CERS: FDA approves first pathogen reduction system to treat plasma; +20.9% afterhours

- APP: Names Paula Schneider as CEO, Terminates Dov Charney; +20.7% afterhours

- PTRY: Said to be nearing a deal to be sold - financial press; +17.8% afterhours

- DRI: Reports Q2 $0.28 v $0.27e, R$1.56B v $1.55Be; +2.3% afterhours

Notable movers by sector:

- Consumer Discretionary: Japan Tobacco 2914.JP -7.0% (Japan may remove tax breaks)

- Financials: CITIC Securities 600030.CN +6.6%, Huatai Securities 601688.CN +2.1% (rumors China to relax capital requirement for brokers); Guotai Junan 1788.HK -9.1% (Dep CEO under investigation)

- Materials: Whitehaven Coal WHC.AU +4.0% (coal railings commenced); Henan Tongli Cement 000885.CN +10.0% (Henan Tianrui discloses 5% stake)

- Energy: Kansai Electric Power 9503.JP +3.4% (plans to raise power rates)

- Industrials: Boart Longyear BLY.AU -8.3% (shareholders to vote on bailout plan); Geely Automobile 175.HK -17.0% (guides FY14 lower); China Railway Construction Group 601186.CN +10.0% (to build 4 major projects)