Asian Shares Make Muted Start

Good morning,

- Alcoa earnings are due on Friday, kicking off the season. As we see GAAP massaged to beat estimates, remember trend of earnings/forecasts.

- US Equities Close: DJIA 16912.29 (+0.73%); S&P500 1995.82 (+0.80%); NASDAQ 4791.15 (+0.90%).

- Weird... The ISDA - industry group for assessing credit default swaps - is considering new conflict-of-interest rules...the group that owns the CDS wants to ensure that they mitigate conflicts of interest on calling defaults......wonder how that would have played with the Greek bond restructuring?

- Greece's Prime Minister Alexis Tsipras: Current parliament will take Greece out of crisis, current parliament will make changes Greece needs..Greece will close first review in November, Greece will recapitalize banks by end of year..Greece will start debt relief talks by end of year...Greece can't return to markets with unsustainable debt.

-Today is first time in 97 trading days $AUDUSD closes above 50-day SMA. Third longest bear stretch in over 15yrs.

-On Wednesday's session $JPY has been the best performing major vs $USD with +0.04% spot returns while $AUD has been the worst with -0.07%.

- China raises the Yuan reference rate 0.17% to 6.3505 against the US Dollar, most since September 2nd.

- A lack of change from RBA's rhetoric likely caused the markets to doubt a rate cut from them in the near-future.

- $NZD, $AUD, and $CAD are expected to be the most active majors vs $USD with 1W implied volatility at 11.61, 11.50, and 8.99 respectively.

- This is the sixth consecutive session the Canadian dollar is appreciating. The US dollar reached an 11-year high on September 29 near CAD1.3460. Today it traded to almost CAD1.2970. There have been four main drivers of the Canadian dollar advance. First, the Canadian economy contraction that persisted through the first part of the year ended with renewed growth in June and July. Investors understood this as an indication that the Bank of Canada's two rate cuts this year likely completes the mini-easing cycle. Second, the Federal Reserve delayed the rate hike that appeared to have been signaled for September..Third, as a consequence of these first two drivers, the interest rate premium the US pays over Canada for two-year borrowing has fallen from 30 bp in mid-September to 8 bp now.The Canadian dollar is sensitive to the interest rate differentials. Fourth, is the bounce in oil prices, especially over the past four sessions...The Canadian dollar recovery may be over.

- In a surprising trend, American cigarette use appears to be back on the rise. The big question is why. On Monday, the Alcohol and Tobacco Tax and Trade Bureau reported that cigarette shipments for the first half of 2015 have increased from the same period the previous year. If this trend holds, it would mark the first year-over-year increase in cigarette shipments since 2006. This is a big difference from the average year of late, when a 3 to 4 percent volume decline has been the norm. According to Vivien Azer, consumer analyst at Cowen & Co., the spike in cigarette shipments is largely due to lower gas prices...If retail gas prices stay low, Azer expects to see "better-than-trend cigarette volumes" in both 2015 and 2016.

- IMF Warns World Financial System Faces Risk from Emerging Markets.

- Moody's: Slower growth, rising credit risk are symptoms of China. Growth concerns test China's will to liberalize market.

- ECB's Knot: Eurozone inflation not at 2% in 1.5 years.

- Major news for today: German Merchandise Trade, US Economic Confidence Index, US Consumer Confidence.

Have a great day!