- Asian equities traded mixed on the back of consolidation of gains seen in US markets, with shares in Tokyo and Australia losing some ground while and indices in Korea and Hong Kong gaining moderately. Toyota Motors headlined breaking news after receiving a Fitch downgrade from AAA to AA for the first time in 10 years. Credit rating was adjusted based on general turmoil in auto industry as well as what Fitch referred to as concentrated geographic investments. Moreover, Fitch warned that further downgrades could be warranted if market weakness persists. Toyota Motors traded down by 4%, Honda traded in step at -3%, while Isuzu was most vulnerable on exposure to larger vehicle markets, dropping by 7%. Among other notable Tokyo-traded shares, Panasonic declined by over 3% after objection to its acquisition of Sanyo by Goldman - one of Sanyo's majority stakeholders. Meanwhile, maker of Sylvania and Emerson products Funai traded down by 3% on concern over consumer appetite for big-ticket items, with more than 70% of company's products exported to the US. Nikkei 225 index pared some of its initial losses going into mid-session break, but was still seen down 0. 9%.

- South Korea's Kospi was the regional outperformer in lieu of upbeat news from the banking sector, gaining over 4.5%. Chairman of Financial Services Commission has ruled out an immediate measure to inject public funds into Korea's banks, boosing confidence that financial institutions can raise capital privately while reassuring investors that risks associated with mortgages, consumer debt, and small business loans are well managed by lenders.
Sector notables KB Financial and Woori Finance both rallied by 15%. Also helping the broader index were Korea's commodity producers benefiting from failed BHP bid of Rio Tinto, with Posco - one of Asia's largest steelmakers - ganing markedly.

- Hang Seng traded higher by 3.4% and was highlighted by Li Fung - China's manufacturer of a broad range of goods exported for sale at Wal-Mart stores. Investors here cheered allocation to consumer lending program announced as part of the proposed $800B TALF program in hopes of restoring consumer appetite abroad. Wharf Holdings gained 7% after being added to "conviction buy" list at Goldman Sachs, while China Eastern Airlines broke a string of 4 consecutive session declines that saw its shares shed 32% with a 9% rebound after rumors of a $690M loss from oil price hedging operations went unsubstantiated by the company.

- In currencies, dollar bears have consolidated broad gains made by the Euro against the greenback in early US session. After rallying by nearly three big figures to 1.3080 high, EUR/USD retraced down to 1.2960 on profit-taking in equities as well as dovishness from ECB member Weber, who saw market view of 75bp rate cuts in coming months as "in line". Likewise, GBP/USD sold down by 200 pips from the 550-pip gain to mid-session peak at 1.5530. A re-test of this high that provided minor support three weeks ago targets subsequent technical resistance at 1.59. Swiss franc mirrored gains in EUR earlier in the session with USD/CHF selling down to 1.1830 from 1.2060 before consolidating above 1.19 handle. Japanese Yen remained particularly strong against the dollar, testing this week's high just below 95.00 figure. The initial JPY selloff in early US session against the Euro and Sterling was reversed fully in Asian hours, with EUR/JPY trading down to 123 and GBP/JPY selloff reaching 145.50, however against the dollar, JPY rebound was notably more extreme, testament to increasing likelihood of additional risk averse FX flow to come. In commodity FX, AUD/USD oscillated in a 50-pip range just above 0.64 level, while USD/CAD failed to take advantage of more losses in crude, subdued by technically-pivotal support turned resistance at 1.2370. Among notable emerging Asian currencies, SGD traded range-bound against USD between 1.5060 and 1.5130, while USD/KRW sold off heavily below 1500 handle on broad gains in Korea's Kospi index.

- Crude oil is surprisingly resilient on today's Asian session as the commodity is gaining by more than (%), despite the mixed equity session and the firmer USD. During the US session, oil prices fell by close to 6.7%, but closed above $50/bbl. One of the top energy related stories on today's session were comments out of Russia's Energy Min that his country would cooperate with OPEC on oil production, as Russia's economic feels the impacts of the sharp drop in oil prices. Russia's 2008 budget is based on oil prices at $70/bbl, which is well below current spot prices.
Spot Gold is lower by more than 0.60%, as the firmer USD has weighted. Also, Gold is underperforming oil prices and is off by more than 0.60% on the session, as the firmer dollar has weighed. Tokyo Gold is little changed around ¥2, 468/gram.