AUD slumps on flooding aftermath

Asian Market Update: Nikkei rallies on Yen retreat; AUD slumps on flooding aftermath
Economic Data
- (JP) JAPAN NOV LOANS & DISCOUNTS CORP Y/Y: -4.5% V -4.5% PRIOR
- (AU) AUSTRALIA DEC RBA COMMODITY PRICE INDEX: 94.6 V 93.5 PRIOR; Commodity Index SDR 43.1 v 42.3 prior
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF MANUF INDEX: 46.3 V 47.6 PRIOR (4th consecutive contraction and lowest level since Jul 2009)
- (KS) SOUTH KOREA DEC FX RESERVES: $291.6B V $290B PRIOR
- (TH) THAILAND DEC CPI M/M: 0.2% V 0.1%E; Y/Y: 3.0% V 3.0%E; CORE CPI Y/Y: 1.4% V 1.1%E
Markets Snapshot (as of 12:30amET)
- Nikkei225 +1.7%
- S&P/ASX -0.1%
- Kospi +0.3%
- Taiex -0.4%
- Shanghai Composite +1.6%
- Hang Seng +0.3%
- Mar S&P Futures flat at 1,266
- Feb Gold +0.1% $1,416/oz
- Feb Crude oil +0.1% $91.63/brl
- Mar Copper -0.1% at $4.45
Overview/Top Headlines
- Asian equity markets are trading mixed despite the strong rally for US equities out of the gate in 2011. Nikkei225 is the biggest gainer, supported by the tech sector rising on memory chip pricing recovery and overall exporter rally boosted by weakness in JPY. USD/JPY was above �82 handle for the first time since Dec 29th, with greenback strength attributed to renewed Treasury selling in favor of equities. Shanghai Composite also traded higher as markets cheered a "soft-landing" Manufacturing PMI portending slower PBoC tightening pace. Australia's S&P/ASX was the most notable decliner as Aussie investors react to the worst flooding Down Under in decades. Indeed, AUD is the worst performing currency among the USD majors, falling 0.8% below $1.01. In AUD crosses, EUR/AUD saw a 2-week high above 1.32 and GBP/AUD a 1-week high above 1.5340.
- In China, the PBoC continued to strengthen CNY to its post-revaluation high, setting daily midpoint at 6.6215 v 6.6227 prior. A press report noted Brazil Pres Rousseff travelling to China later in 2011 would address relative CNY weakness, suggesting China's other trading partners are willing to support the US position of currency reform. Separately, PBoC sold CNY1B in 1-yr bills at 2.6167% v 2.5115%, marking the second consecutive week of higher yields since the central bank raised its key 1-yr policy rates by 25bps last weekend.
Speakers/Geopolitical/In the press
- (TT) Taiwan Premier: Raises 2011 GDP forecast to 4.8% from 4.5%; Affirms CPI target below 2%; Jobless rate of 4.9%
- (TH) Thailand Min of Commerce: 2011 exports are seen rising 10% v 24%-25% in 2010; Exports face many risks including rising oil prices and global uncertainties - Thai Press
- (JP) Japan PM Kan: Debate on raising sales tax is needed; Also would like to discuss reform to social security system
- (KS) According to Nomura, the next BOK rate hike likely to take place in April amid rising inflation - Korean press
Equities
- AA: Positive Mad Money mention as Top 2011 Dow Jones pick; Company may be taken over by BHP, RIO, or VALE on strong demand for aluminum; Target $22/shr, +40% y/y - CNBC; +2.7% afterhours
- WES.AU: Flood waters are receding at Curragh with operations slowly returning to normal; Sees FY coking coal sales at 5.8M-6.2M tons v 6.0M-6.5M prior
- RIO: JV partner Chinalco is considering selling 50% of its stake in the Simandou Guinea iron ore project to a consortium of 10 members - Australian Financial Review
- Air China: Looking to build fleet of planes up to 800 by 2015 v 263 planes in 2009 - Chinese Press
FX/Fixed Income/Commodities
- (AU) Australia Gladstone port: Stockpiles are very low; 18 vessels are at anchor in the harbor with 12 additional ships expected in the next 10-days
- (AU) Australia Brown Basin coal mining area has flood waters reducing but still remain high - US Financial Press
- (AU) US Financial Press attributes sharp increase in wheat prices to flood in Australia, which is the 4th biggest exporter of wheat in the world
- (AU) Australia Home Affairs Min OConnor will present a report in Feb that will outline new anti-dumping measures for the steel importing sector - Australian Financial Review
- (AU) Australia Mining Industry facing potential labor disputes with about half of its collective bargaining pacts expiring in mid-2011 - Australian Financial Review
- GNC.AU: Winter grain receivables are up to 10.7M tons; Does not expect shipments in Queensland to resume for at least 2 weeks
Source: Fxstreet.com