Asian Market Update: AUD Hits 15-month high on strong jobs data; Bank of Korea stands pat at 2.00% despite signs of recovery; Gold makes new record high


ECONOMIC DATA

- (NZ) New Zealand Oct PMI: 50.6 V 51.5 prior (2nd consecutive month of expansion after 16 months of contraction)

- (NZ) New Zealand Sept retail sales M/M: 0.2% V 0.4%E: Ex-auto: 0.0% V 0.4%E

- (JP) Japan Sept Loans & Discounts: 2.3% v 1.8% prior

- (JP) Japan Oct CGPI M/M: -0.7% v -0.1%e; Y/Y: -6.7% v -6.0%e

- (AU) Australia Nov Consumer Inflation Expectations: 3.2% v 3.5% prior (4-month low)

- (AU) Australia Oct Unemployment Rate: 5.8% v 5.8%e; Employment Change: +24.5K v -10.0Ke; Full-time Employment Change: 2.9K v 33.3K prior; Part-time Change: 21.5K v 6.5K prior; Participation Rate: 65.2% v 65.2%e

- (KS) Bank of Korea Leaves Interest Rates unchanged at 2.00% (as expected

- (JP) Japan Oct Tokyo Condo Sales: -20.0 v 26.2% prior (4-month low)

- (TH) Thailand Oct Consumer Confidence Economic: 68.0 v 68.4 prior (first decline in 5 months)


SPEAKERS/PRESS

- Asian equity markets are looking at a negative close for the first time this week as mixed economic data led to some mild profit-taking across the region. Just ahead of close in Tokyo/Korea, Nikkei225 is down 0.7% and the Kospi is down 0.3%.
S&P/ASX closed lower by 0.2%, paring strong gains after the Aussie employment report. In the China region, Shanghai Composite was up 0.5% on bullish momentum built by the October data in the prior session, Taiwan is around unchanged, and the Hang Seng is down 0.5%. Ahead of the Thursday US session, late-day profit-taking translated into a moderate selloff of 0.3% to 1,092.

- Australia employment data marked the prime event of the session, beating estimates with a positive print despite the dip in job advertisement figures earlier this week. Notably, the breakdown in job growth was once again weighed in favor of part-time labor vs full-time, while unemployment rate grew to 5.8% after prior month's drop.

- Bank of Korea left interest rates unchanged at 2% as expected, noting increase in consumption and corporate investment along with stable inflation contained by firming KRW. BOK said it would maintain easy policy for the time being, gearing future policy to sustaining economic recovery while also shrugging concerns over fueling the housing bubble, noting that lending was flattening and price growth was moderating. Bank of Korea Governor Lee also noted improvement in domestic exports and demand, adding some policy uncertainty to the easy policy by suggesting it is difficult to say whether BoK will raise rates in 2009 or 2010. On balance, Gov Lee was more dovish, noting that inflation would remain stable for some time as impact of fiscal stimulus wanes, while warning that Q4 GDP growth is unlikely to be as strong as Q2 and Q3.

- Over in China, Premier Wen said global economy is recovering, but the path of rebound would be slow and bumpy, requiring China to continue "fine-tuning" fiscal stimulus. On the monetary front, Wen reiterated commitment to a moderately loose monetary policy, but also warned that inflation expectations need to be managed. Assessment from China state economic research body affirmed policymaker confidence that the official 2009 8% GDP target will likely be exceeded, while a research note out of Morgan Stanley recommended that investors stay bullish in China for the rest of 2009.


EQUITIES

- In specific Nikkei names, Nippon Yusen traded sharply lower after confirming press speculation that it would raise up to ¥142B in new equity. In Tokyo earnings, Obayashi reported in line but cut its FY forecasts, posting Net ¥1.6B v ¥2Be, Op Profit ¥5.8B v ¥5Be, Rev ¥700.4B v ¥700Be, and guiding Net ¥7.5B v ¥10Be, Op Profit ¥20.5B v ¥24Be, Rev ¥1.5T v ¥1.6Te. In other Nikkei industrials, Shimizu missed, reporting H1 Net ¥2.1B v ¥4Be, Op Profit ¥5.1B v ¥11Be, Rev ¥708.6B v ¥810Be. In the auto sector, Nissan CEO said company results are improving, forecasting sales to rise further going into 2010. Outside Japan, Korea's Hyosung traded up over 10% after dropping its bid for Hynix. Local press said Posco is planning to delay the completion of plants in construction in South Korea, with a KRW1.9T Gwangyan plant launch date pushed back from late 2009 to Sept of 2012.


CURRENCIES/FIXED INCOME/COMMODITIES

- In currencies, the Aussie dollar spiked to 15-month high above 0.9360 after stronger than expected jobs data, pulling USD lower across the board. European majors did pare much of those gains as risk aversion returned late in the session.
EUR/USD fell back below 1.50 and GBP/USD dipped into negative territory to 1.6560. Japanese Yen mainly traded sideway, with USD/JPY contained to 89.70-90.00 range.

- Spot Gold prices are higher and trading above $1,119 per oz. Earlier during the session, spot gold moved to a fresh record high above $1,120/oz, as the Australian dollar moved to a fresh 15-month high against the dollar. As of the time of writing crude oil prices are little changed and trading near $79/bbl. Later the US Department of Energy will release its weekly oil and gasoline inventories data. In OPEC news, the cartel raised its 2010 global oil demand forecasts in its Nov report. OPEC now sees 2010 global oil demand at 750K bpd vs 700K prior, due in part to the low levels of demand expected for 2009.

- In corporate news, Australian iron ore miner Fortescue Metals noted that iron ore prices are continuing to rise and that demand remains strong. Australian steelmaker Bluescope Steel said that steel demand has been rising, but that international prices have moderated. Bluescope was also positive on the outlook for its Asian businesses. In the press, the CEO of large gold miner Barrick Gold said in the Financial Times that bullion prices could see a pullback from record levels, but he expects the metal to remain above $900/oz.