- Asian stock markets started Tuesday in the red, as Wall Street bears demonstrated that Friday was just a sucker rally. Black Friday sales were great not because U.S. consumers wanted discounts, but because they had to buy on discount. But risk appetite recovered on news that Citigroup has received a $7.5B cash infusion from the Abu Dhabi Investment Authority (ADIA). Substantially all proceeds will be Tier 1 capital. As a result of the transaction, ADIA will hold a stake of no more than 4.9%, and the units will be convertible from $31.83-$37.24/share (vs. Citi's closing price at $29.79). Some traders were quick to point out that the bail-out shows Citi's desperation, adding that Wall Street might not sustain initial positive reaction to the news. Citigroup has avoided a discounted equity issue by selling convertible equity units at an 11% interest rate. Several analysts feel that's a massively high rate for $7.5B.

- Summary of market reaction between 21:24 ET (when Citi news broke) and 22:56 ET: S&P futures spiked higher from around 1410.98 to 1425, USD/JPY moved 107.48 to 108.59, AUD/JPY moved from 93.70 to 95.85, U.S. 10yr yield moved from 3.8564% to 3.9178%, Japan's benchmark Nikkei index moved from around 14800 to 15272, Australia's ASX index rebounds strongly from session lows, spot gold moved from 824.68/oz to trade above 828.00/oz.

- EUR/CNY will be under the spotlight this week as top EU officials, including ECB President Trichet, convene in Beijing for a EU-China summit tomorrow. The EU's Almunia said that he would discuss currency issues with the Chinese. After China announced plans to buy Airbus jetliners valued at $15 billion, the Bank of France's Noyer says that countries will large current account surpluses need currency flexibility, adding that countries with fixed exchange rates need flexibility.

- New Zealand inflation expectations data confirms consensus that RBNZ is to keep rates on hold: NZ managers expect NZ inflation at 3.0% this year vs. 2.7% forecasted in the August survey. NZ managers see inflation at 2.7% in two years time vs. 2.6% in prior survey.

- Traders said that a large Japanese investment trust launch today is supporting JPY crosses. Between 17:00 ET and 23:23 ET: USD/JPY +0.85%, EUR/JPY +0.89%, GBP/JPY +0.96%, AUD/JPY +1.82%, NZD/JPY +1.97%

- Equities: At 23:05 ET Japan's Nikkei is +0.78%, Australia's ASX is -0.76%, South Korea's KOSPI is -0.21% and the Shanghai Composite Index is -1.51%. Japanese listed shares of Citigroup had to be halted due to excessive buying demand. Miners and banks traded sharply lower in Sydney, while electronics and financials dragged on the KOSPI index. Hong Kong's Hang Seng index saw early selling pressure after Temasek sold a large stake held in Bank of China.

- Commodities: Crude oil prices came under pressure at the start of Asia, and news of Citi's cash infusion led to a brief rally above $97/bbl, but these levels could not be sustained. Nymex crude oil lost -0.79% between 18:00 ET and 23:14 ET on reports that Saudia Arabia is raising production (last quoted at $96.93/bbl), while spot gold was little changed at $826.60/oz. Shanghai Copper is lower on a rise in global inventories.

(by Eben Esterhuizen and Gavin Pierce)