As of 1:30amET:
- Nikkei225 -0.1%
- S&P/ASX +0.1%
- Kospi -0.3%
- Taiex -0.4%
- Shanghai Composite -0.4%
- US S&P Futures -0.2% at 1,107
- Spot Gold $1,184/oz
- Crude oil unchanged $78.95/brl

***Overview/Top headlines***
- Risk appetite fanned by better than expected new home sales data on Monday carried through into the early part of the Asian session but has subsequently seen a retreat. With EU stress tests in rearview mirror, some of the attention has shifted to lending in the Far East. Overnight, Economic Observer reported China is looking to carry out stress tests on property trust loans. Subsequently, an FT report in today's session citing senior officials at China Banking Regulatory Commission (CBRC) note China banks are facing serious risks on over 20% of CNY7.7T in loans to local govts. Report also warning that if 30% of loans to local govts are not recovered, 4-6% would be added to overall non-performing loan ratios at the banks, subsequently prompting some profit-taking in risk-related FX majors and Asian equity markets.
- On monetary front, India Central Bank raised its Repo rate 25bps and kept cash reserve ratio at 6.00 as expected, but RAISED REVERSE REPO RATE by 50bps - above 25bps expected. Accompanying statement was also fairly hawkish, noting economy is reverting to pre-crisis growth trajectory while policy rates are still not consistent with strong economic growth. European and commodity FX majors retreated toward session lows following the RBI decision.


***Economic Data***
- (PH) PHILIPPINES MAY TOTAL IMPORTS Y/Y: 31.4% V 45.3% PRIOR; TRADE BALANCE: -$513M V -$846M PRIOR
- (AU) AUSTRALIA MAY CONFERENCE BOARD LEADING INDEX: 0.3% V 0.1% PRIOR
- (JP) JAPAN JUN CORP SERVICE PRICE INDEX Y/Y -1.0% V -0.9%E
- (KS) SOUTH KOREA JUL CONSUMER CONFIDENCE: 112 V 112 PRIOR

***Macro/FX***
China
- USD/CNY: IMF sees the yuan as undervalued - WSJ
- (CH) China air quality has deteriorated in H1 for the first time since 2005 on rising industrical and building activity - China Daily
- (CH) Chinese officials report the Dalian oil spill has been cleaned up 10 days after the occurrence; Though beaches remain in need of clean up - Shanghai Daily
- (CH) Morgan Stanley's Roach: China consumption as a percentage of nation's GDP to rise from "rock-bottom" 39% in 2009 as worker wages increase - China Daily
- (CH) PBoC sells 1-yr bills at 2.0929% (unchanged)

Australia/NZ
- (AU) Australia's major cities are seeing a rise in occupancy rates +5% to 73% in the last year; Room rates increased +35% to A$122 - Australian Financial Review
- (AU) Australia's Treasurer Swan: in constructive talks with the smaller miners; Anti-Tax advertising campaign is partisan
- (AU) Australia Treasury report warns of "substantial risks" to commodities boom that will unpin the A$10.5B mining tax; Doubts that the boom will support the projected revenue - Australian Financial Review
- (NZ) New Zealand's Federated Farmers urging RBNZ to keep rates unchanged at 2.75% - Dominion Post

Japan
- (JP) Japan Cabinet Sec Sengoku: Ruling DPJ party would not be opposed to grand coalition with its main opposition party LDP to pass legislation in Diet - Japanese press
- (JP) Japan Strategy Min Arai: Govt cannot be complacent about conditions in EU despite the positive banking stress test results
- (JP) Panel to recommend review of Japan's policy of not allowing nuclear weapons on its territory - Asahi Paper


***Equities***
Australia
- CNA.AU: Reports H1 Net A$498M, +54% y/y; Rev A$929M, -26%y/y
- OSH.AU: Reports Q2 production 1.9M BOE v 2.0M q/q, Rev $142.7M v $134M q/q
- NCM.AU: Reportedly entering into an agreement with Sumatra Copper and Gold through a A$2.5M investment for a 7.1% stake
- WPL.AU: May reach agreement with BHP to supply its A$14B Pluto LNG project by Scarborough and Thebes gas fields - Australian Financial Review


Japan
Automakers:
- TM: Reports Jun global vehicle production at 654K units, up 16% y/y
- HMC: Reports June global vehicle production +18% y/y (303K units)
- NSANY: Reports Jun global vehicle production at 354K units, up 39% y/y
- NSANY to produce three new low-cost subcompacts in Mexico - Japanese press
- Mazda Motor looking to cut electric power consumption in gas-powered vehicles by about 50% - Japanese press

Tech:
- Fujitsu to increase PC production at domestic Hyogo plant - Japanese press
- Panasonic Corporation expanding its domestic offerings of energy saving appliances this summer by 50% to 68 models compared to last year end - Japanese press
- Seiko Epson denies press speculation it may report Q1 Op profit of ¥2B - first profit in 2 years
- Jupiter Telecommunications reports H1 Net ¥20.2B v ¥17Be, Op Profit ¥32.9B v ¥34Be, Rev ¥177.5B v ¥178Be

Materials:
- JFE Holdings reports Q1 Net ¥28B v ¥46Be, Op Profit ¥53.4B v ¥64Be, Rev ¥755B v ¥839Be
- JFE Holdings to invest ¥90B to maintain 14.99% stake in JSW Steel
- Sumitomo and Korea Electric seen as leading candidates in a bid for Abu Dhabi's independent power project Shuweihat - Japanese press


Korea:
- Samsung SDI reports Q2 Net KRW68.4B v KRW66Be, Op profit KRW83.6B v KRW72Be, Rev KRW1.3T v KRW1.2Te
- LG Display to invest KRW1T by 2012 in expanding its domestic LCD production - Korean press
- KT Corp to invest KRW5.1T by 2014 in telecom network upgrade


Other:
- Hon Hai Precision Industries loses lawsuit against former employee for breach of non-compete agreement - Chinese press

***Commodities***
- (CH) According to a China Iron and Steel Assoc (CISA) official, profits for China's 77 biggest steelmakers fell about 38% m/m in June because of falling steel prices - Chinese press
- GLD: SPDR Gold Trust ETF holdings FALL by 0.3 metric tons to 1,301.74 metric tons as of Jul 26th
- Commodities Update: Front month crude up $0.07 at $78.91; Spot gold at $1,183 in early trading

www.tradethenews.com