Asian Market Update: Equities bid on improved risk-appetite following better than expected US jobs reprot

As of 12:30amET:

- Nikkei225 +1.5%

- S&P/ASX +0.5%

- Kospi +0.4%

- Taiex +0.9%

- Shanghai Composite +1.0%

- Sept S&P Futures +0.2% at 1,105

- Oct Gold -0.1% $1,248/oz

- Oct Crude oil -0.4% $74.27/brl

- Dec Wheat -0.1% at $7.40


Economic Data

- (AU) AUSTRALIA AUG TD SECURITIES INFLATION M/M: 0.2% V 0.1% PRIOR (first increase in 3 months); Y/Y: 3.0% V 2.8% PRIOR

- (AU) AUSTRALIA AUG ANZ JOB ADVERTISEMENTS M/M: 2.6% V 1.4% PRIOR


Overview/Top headlines

- Asian equity markets are tracking US gains on Friday in the wake of a surprisingly improved employment picture, even though trading is notably thin ahead of the US Monday market holiday. Nikkei225 is leading the way, supported by export names cheering the "less bad" state of US consumer. Some speculation that Japan's Ministry of Finance could consider a unilateral action in the absence of international support for a coordinated currency intervention is also supporting equity market gains, even though USD/JPY is unimpressed and still closer to ¥84 than the pivotal ¥85 handle.

- Uncertainty ahead of interest rate decisions from Australia and Japan has kept currency markets at bay for AUD and JPY at bay. In EU, worries about renewed unrest in Greece ahead of PM Papandreou's annual address on economy later this week has also counterbalanced the catch-up rally for the EUR, capping gains at the 1.29 handle. New Zealand, digging out of Saturday's 7.1 earthquake, saw the Kiwi retreat at the start of trading before watching the currency outperform, with dairy co-op Fonterra said to operate as normal and construction potentially stimulating housing activty.


Macro/FX

China

- USD/CNY: (CH) PBoC sets yuan mid point at 6.7838 v 6.8038 prior close (highest Yuan setting since August 10th)

- (CH) Foreign direct investment (FDI) in China in 2010 may reach $100B, rising from about $90B in 2009 - China Daily

- (CH) China economic growth to slow to 8.2% in Q4; Economy to grow 8.8% in 2011 - CitiGroup

- (CH) China regulator publishes rules allowing insurers to invest in private equity and real estate

Australia/New Zealand

- (NZ) New Zealand Treasury: Recovery remains subdued; Retail and labor market conditions suggest GDP growth of 0.8% in Q2

- (NZ) New Zealand PM Key: Earthquake likely to result in higher construction activity, but some volatility likely in tax revenues

- (NZ) New Zealand Commerce Min Powers: Confirms that proposed regulations tightening financial regulation have been postponed until 2012 - Dominion Post

- (AU) Investment in Australia from overseas may decline if Opposition Leader Abbott is not elected - The Australian op-ed

- (AU) Australian National Elections update: 2 of the remaining 3 Independent MP holdouts expected to support Labor party - The Australian

- (AU) S&P affirms Australia's AAA rating, outlook stable

Japan

- (JP) BoJ will begin its regularly scheduled 2 day meeting today; Expected to evaluate among other things the effectiveness of easing measures taken in the emergency meeting last week

- (JP) Japan PM Kan's race to retain leadership of DPJ more shaky; Both Kan and Ozawa have support of about 160 members of 412-member Diet - FT

Korea

- (KS) South Korea President Lee's administration dealt a fresh blow with resignation of foreign minister Yu - FT

Other

- (ID) Indonesia Chief Econ Min: GDP may grow above 6% in Q3 2010

- (SI) Singapore PM Lee Hsien Loong: Would like to take advantage of China's rapid growth; Calling for regular reviews of free trade agreements between China and Singapore to meet the needs of both business communities


Equities

Australia/New Zealand

- MQG.AU: H1 net profit may fall 25% y/y; Results still affected by high capital funding and capital cost

- RIO.AU: Planning to reactivate $1.5B expansion of the Argyle diamond mine in Western Australia - Australian Financial Review

- Bank analysts expect Australian retailers David Jones and Myer to show a focus on cost cutting when they report FY result later this month - The Australian

Japan

- Mazda Motor Corp: Embarking on emergency cost-cutting program in order to reduce the impact of strong Yen - Nikkei News

- Suzuki: To invest ¥30B in a 3rd assembly plant in India in FY13 - Nikkei News

- MTU: Bank of Tokyo Mitsubishi UFJ has formed a partnership with Bank of China; Looking to have shared network of branches and settlement network - Nikkei

- Idemitsu Kosan Co Ltd: Plans to increase domestic and overseas coal sales by 44% from the FY09 level to 8M metric tons in 2012; Looking to tap into emerging economies and China as part of growth strategy - Nikkei

China

- SHG: Filed a complaint against its CEO on charges of misconduct concerning a KRW95B loan extension

- GOOG: Former Google China president Kai-fu Lee: Western companies have no chance in China internet market unless they become more nimble and flexible on a local level and keep a strong technical edge - FT

Korea

- Samsung Electronics: Plans to increase investment spending by KRW10T to KRW30T next year - Korean press

- LG Electronics Inc: Head of Home Entertainment business unit looking to increase sales of flat panel TVs by 40% next year - Korean press

Other

- POT: China's Sinochem and sovereign wealth fund CIC close to launching a counterbid to BHP's offer - The Australian

- CW.UK: SingTel is starting to put together a bid for CW estimated at £1.8B; Action is supported by CEO Chua Sock Koong - London Sunday Times


Commodities

- (AU) At the Australian Mount Weld project, Lynas expects to deliver 1.4M metric tons of rare earth when production starts next year - The Australian

- (CH) China may close 18 of its steel furnaces starting in early September that do not meet state requirements for environmental protection and energy savings standards to meet year end energy savings targets - China Securities Journal

- AWC.AU: Aluminum markets showing improvement; Demand may grow about 12% in current FY

- Saudi Arabia raises light crude price by $0.10 to Argus index rate minus $0.35

- International Water Management Institute Director General Dr. Colin Chartres: With rainfall becoming more erratic our focus must shift towards investments into water storage or face a huge threat towards economic growth and food security