Asian Market Update: AUD falls below $1.02 on weak retail sales; Polls see Mitt Romney as the victor in first debate



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Asian Market Update: AUD falls below $1.02 on weak retail sales; Polls see Mitt Romney as the victor in first debate

04.10.2012 07:55 Thursday
***Economic Data***
- (AU) AUSTRALIA AUG BUILDING APPROVALS M/M: 6.4% V 4.7%E (first increase in three months); Y/Y: -15.4% V -14.3%E
- (JP) Japan investors bought net ¥1.54T in Foreign Bonds last week vs Sold ¥65.9B prior week; Foreign Investors sold net ¥239.6B in Japan stocks last week vs Sold ¥101.7B in prior week

***Markets Snapshot (as of 03:00GMT)***
- Nikkei225 +1.2%
- S&P/ASX +0.3%
- Kospi flat
- Shanghai Composite closed
- Hang Seng +0.2%
- Dec S&P500 +0.4% at 1,451
- Dec gold +0.2% 1,782/oz
- Nov Crude oil +0.2% at $88.32/brl

- Key Asian equity markets are little changed for the 2nd consecutive session with China still on holiday break, even as Nikkei225 was the surprising outperformer on the heels of pronounced weakness in the yen. USD/JPY pair hit a fresh 2-week high, extending the gains for the greenback that began in early US hours starting with a better than expected ADP jobs data. Also of note, US equity futures were bid higher toward the tail end of the first US presidential debates as investors seemingly cheered the impressive showing by the Republican challenger. According to post-debate polls of likely voters, some 67% saw Mitt Romney as the clear victor over the 25% giving the nod to the incumbent. Dec S&P500 contract was up 7 handles at the highs of 1,452 within minutes of debate conclusion.
- Regional economic data kept the spotlight on Australia, in particularly retail sales, with consumption rising just 0.2% on the month, two ticks below consensus. Concurrently released building approvals were slightly better than expected on sequential basis but were overshadowed by the weak retail data, sending AUD to fresh 4-week lows below $1.02. In other FX majors, EUR/USD and GBP/USD saw some modest strength above $1.2920 and $1.61 respectively, with BOE and ECB decisions on tap for the European session.

***Fixed Income/Currencies/ Commodities***
- USD/JPY: Extending gains above ¥78.60, 2-week highs
- AUD/USD: Extending decline below $1.0195 following ; fresh 4-week lows
- GLD: SPDR Gold Trust ETF daily holdings rise by 1.8 tons to 1,324.4 tons (highest level since Sept 25th)
- (JP) Japan MoF sells ¥2.11T in 0.8% 10-yr notes; Avg yield: 0.767% v 0.806% prior; Bid to cover: 3.40x v 2.84x prior

***Speakers/Political/In the Papers***
- (US) According to a CNN poll, 67% of likely voters saw Mitt Romney winning the first presidential debate vs 25% for Pres Obama
- (JP) Japan Fin Min Jojima: See potential for achieving a budget compromise; Open to talks on midyear revisions to FY12/13 budget - Nikkei
- (JP) US Dep Defense Sec Carter: Pentagon to deploy F-35 stealth fighters to Okinawa Prefecture in Japan - Nikkei News

- (KR) According to a Bank of Korea (BOK) survey of 16 local banks, corporate lending is expected to tighten in Q4 - Korean press
- (KR) Korea Trade-Investment Promotion Agency (KOTRA) : South Korea exports to remain sluggish in Q4 - Korean press

- (NZ) New Zealand Fin Min: QE in Europe, US and Japan increasing difficulty for exporters; Govt is focusing on ways to help exporters become more competitive
- (ES) Germany Fin Min Schaeuble reiterates Spain unlikely to need a bailout, though Germany could be open to supporting an aid program if necessary - Japan press

***Asia Equities***

- WOW.AU: Plans A$1.4B property spin off - financial press
- ELD.AU: Confirms it received letter from Ruralco regarding potential for transaction opportunity between the two; Says letter lacked detail - financial press
- ANZ.AU: Planning major investment program of up to A$1.5B for Australia businesses - financial press
- NCM.AU: Confirms its application for two mining leases - AFR

- Samsung Electronics 005930.KR: Targets KRW20T op profit for its mobile unit in 2013 - Korean press
- LG Electronics 066570.KR: WM8000H washing machine receives top mark from US Consumer Reports - Korean press

- Sony SNE: Moody's: Alliance with Olympus is credit negative
- Sharp 6753.JP: To end production of its 32in TVs at its Kameyama facility - Kyodo News
- Daiwa Securities 8601.JP: President: Investors should buy stocks aggressively; Investment environment has dramatically improved - Nikkei News
- KDDI 9433.JP: Overnight weakness attributed to Softbank acquiring eAccess Ltd - Nikkei News
- KDDI 9433.JP: Said to be negotiating with Apple to sell iPad Minis in Japan - Japan press

***US Equities***

- HMSY: Cuts FY12 rev to $480-490M v $501Me (from $500-515M prior); -7.7% afterhours