Asian Market Update: Surprise Goldman Earnings Extend Positive Developments for US Banking Sector; Singapore Central Bank Lowers Target Band as Q1 GDP Falls Short of Estimates; Japanese Officials Remain Downbeat on Economic Prospects; USD and JPY Extend Gains on Risk Aversion, while Crude Skids Lower on IEA Demand Downgrade

- Goldman Sachs delivered a surprising result in after-hours session, both in terms of timing and performance. Reporting ahead of scheduled release for Tuesday morning, GS topped both top and bottom line estimates considerably with $3.39 Q1 EPS vs $1.64e and revenues of $9.43B v $7.20Be. Concurrently, Goldman announced a $5B share offering to repay the government's TARP infusion, a move that may have halted the knee-jerk after-hours rally before GS' overall decline of 1.5% after the release. Subsequently, WSJ's "Heard on the Street" section profiled Goldman decision as being indicative of expectations of lower sector ROE going forward but cheered the transparency of the results, noting that the bank has been particularly successful in taking advantage of volatility-driven widening of spreads in the environment of declining competition. In other notable after-hours developments, former head of Fannie Mae Herb Allison was reportedly tapped by the Obama administration to oversee the $700B TARP program, with the official announcement possibly coming as early as tomorrow's speech by the US president addressing the progress of recovery in the US economy.

- Asian bourses are trading mixed, with those markets that remained open over extended Easter break paring some of their recent gains while those that were closed staging a catch-up rally. Amid the latter, S&P/ASX and Hang Seng are up by over 2.5%, while the Nikkei and Kospi are off their opening level highs, trading down 0.9% and around unchanged levels respectively. In Tokyo, tech and electronics names led the slide on several factors. Singapore released a much stronger than expected exports number, potentially suggesting a currency-related shift in preference in overseas demand based on the macro-term weakness of SGD and strength of JPY, which had once again rallied to pressure Nikkei further. Aside from the currency-driven weight, consumer electronics were also at the forefront of Nikkei decline going into the US retail sales figures tomorrow, where estimates suggest further deterioration in consumer demand. Japan's officials have also retained their gloomy assessment of the economy, with comments from Finance Minister Yosano signaling a miss in Japan's FY09 GDP estimate coinciding with the accentuated early Nikkei slide. Subsequently, BOJ Governor Shirakawa suggested economic conditions have worsened in the last 3 months, noting that the central bank is cautious regarding anticipating signs of global recovery.

- Elsewhere in Asia, equities in Australia were broadly stronger as mining and financial names led the other sectors higher. Qantas Air was a notable underperformer, trading lower by over 10% after cutting its FY09 profit forecast to A$100-200M v A$341.5Me from prior A$500M estimate. Aussie airline giant cited "significant" fall in premium travel and a sharp decline in international bookings, planning to cut about 5% of its workforce and reduce flying capacity in existing routes by 5%. On the upside, Australia's NAB business confidence came in at best levels in 6 months at -13 v prior -22 print, suggesting that expectations of easier credit in Australia's consumer base may once again be on the rise.

- In currencies, the most notable jump was seen in Singapore, where aside from strong exports, Prelim Q1 GDP printed far below estimates of -9.6% at -19.7% q/q. In response, Singapore Central Bank revised its "secret" trading band target to the downside, but noted there was "no reason for undue SGD weakening". USD/SGD fell about 200 pips favoring SGD after the release as the pair reached its lowest level since early February. Various Asian officials also weighed in on the controversy of keeping USD as global reserve currency, with PBOC advisor Fan calling for major East Asian economies to diversify their reserves away from the greenback and Japan's Yosano shrugging the possibility for any possible replacement for USD serving as global base. European majors consolidated their gains, with EUR unable to retrace further than 1.33, GBP briefly pushing above 1.49, and CHF ranging in 1.1320-70 territory. Commodity majors consolidated their recent outperformance as AUD fell 50 pips from session high to 0.7270 and NZD shrugging 6-month high in retail sales to decline 50 pips from intraday peaks to 0.5880. CAD also rose to multi-week highs, breaching 1.2190 to trade at lowest level since Feb 10th despite the weakness in energy markets.
Japanese Yen moved modestly higher against USD and EUR, rising below 100 and 133 handles respectively.

- Crude oil is lower by more than 0.50% in Asia, after declining by 4% during the NY floor session.
The NY losses for crude oil came as the IEA lowered its 2009 oil demand estimate by 1.2% to 83.4M bpd, which would be the lowest level of demand since 2004. Spot Gold is higher by more than 0.10% and is tracking the declines in equities.