EUR spikes on Japan plan to buy EU debt

*Asian Market Update:* AUD plummets to 1-month lows on rising flood
water and disappointing trade data; EUR spikes on Japan plan to buy EU
debt

!! Economic Data !!
*- (AU) AUSTRALIA NOV TRADE BALANCE (A$): 1.9B V 2.1BE*
*- (AU) AUSTRALIA DEC ANZ JOB ADVERTISEMENTS M/M*: 2.0% V 3.0% PRIOR
(8th consecutive increase)
*- (CH) CHINA DEC NEW YUAN LOANS (CNY): 480.7B V 360.0BE (1-yr low);
2010 CNY LOANS: 7.95T (above CNY7.5T official target)*
*- (CH) CHINA DEC FOREIGN EXCHANGE RESERVES: $2.85T V $2.76TE*
*- (CH) CHINA DEC M2 MONEY SUPPLY Y/Y: 19.7% V 19.0%E (7-month high)*
*- (NZ) NEW ZEALAND Q4 NZIER BUSINESS OPINION SURVEY:* 8 V 6 PRIOR
- *(NZ) NEW ZEALAND NOV BUILDING PERMITS M/M: +8.8% V -1.8% PRIOR
(13-month high)*
*- (JP) JAPAN DEC OFFICIAL RESERVE ASSETS:* $1.1T V $1.1T PRIOR
*- (JP) JAPAN NOV PRELIMINARY COINCIDENT INDEX CI: 102.2 V 102.2E;
LEADING INDEX CI:* 101.0 V 100.9E
- *(UK) BRC DEC RETAIL SALES MONITOR SSS Y/Y: -0.3% V 0.7% PRIOR
(first decline in 8 months); TOTAL SALES Y/Y:* 1.5% V 2.8% PRIOR
- (SL) SRI LANKA LOWERS REPURCHASE RATE 25BPS TO 7.00%, NOT EXPECTED
(consensus to keep rates unchanged at 7.25%)

!! Markets Snapshot (as Of 12:00amET) !!
- Nikkei225 -0.1%
- S&P/ASX -0.1%
- Kospi -0.1%
- Taiex +1.1%
- Shanghai Composite -0.3%
- Hang Seng +1.0%
- Mar S&P Futures +0.2% at 1,266
- Mar Gold +0.1% $1,376/oz
- Feb Crude oil flat $89.22/brl
- Mar Copper +0.9% at $4.30

!! Overview/Top Headlines !!
- *Alcoa* - the first Dow component to report Q4 - kicked off the
official start to the US earnings season with only modest result,
*beating on the top line but missing on earnings as shares fell nearly
2% afterhours*. Heightened volatility persisted for the remainder of
the Asia session as massive floods continued to ravage Australia's
Queensland region, Japan entered the fray on EU sovereign debt crisis,
and China releases its year-end reserves and money supply data.

- *AUD/USD is in free-fall since the start of the Asia session,
dropping 1.3% or over 130 pips as Australian flood disaster has gone
from bad to worse*. According to local press, Brisbane River has
breached its banks and more rain is on the way. The tragedy is now
taking a more severe human toll, with 8 people confirmed killed and 72
still missing. On the economic data front, *Australia trade balance
missed estimates,* setting off the AUD plunge, despite China exports
rising to A$5.66B from A$5.2B. *Note the data was for the month of
November* and will surely reflect the impact of the floods in months
to come.

- Risk appetite resurfaced briefly in mid-session trade following a
verbal commitment by *Japan Finance Minister Noda to do his part in
helping EU periphery. Specifically, Noda said Japan would focus on
Irish debt with a purchase of about 20% of EFSF bonds to be issued by
EU later this month,* using Japan's EUR holdings in reserve. EUR/USD
spiked to $1.2990 before falling back below $1.2550. Concurrently,
USD/JPY rose above ¥83.10, up 40 pips from session lows. Earlier in
the session, the Euro was a touch weaker after comments from Portugal
Central Bank official suggesting the economy would be willing to look
to external sources for relief. The true test for market confidence in
Portugal is still ahead this week, as Portugal prepares to auction
€1.25B on Wednesday.

!! Speakers/Geopolitical/In The Press !!
- (CH) Shanghai has been given the clearance to implement a property
tax; Expected to be 0.4%-0.8% and implemented in Q1 of 2011 - China
Daily
- *(CH) China's State Administration of Foreign Exchange (SAFE) Deputy
Head Deng: Net forex inflows may increase even more, net fx inflows
may be bigger than expected*
- (CH) High level of inflation in China may persist until Q2 or Q3 -
China Daily citing Economic Observer survey
- *(CH) PBoC sold CNY1B 1-year bills at 2.7221% v 2.6167% w/w (third
consecutive w/w rise after 7 weeks at 2.3437%)*
*- (KS) Goldman Sachs raises South Korea 2011 GDP forecast to 4.7%
from 4.5% prior:* Due to stronger exports in Dec - Korean Press
!! Equities !!
*- Mizuho:* Lowers Long term prime rate to 1.5% from 1.6% in Dec.;
Effective Wed. Jan. 12th - Nikkei
*- TM:* Prius was the top selling car in Japan in 2010; Sales hit
315.7K units, +51.1% y/y - Nikkei
*- CBA.AU:* China CBRC is investigating a bank in China that CBA holds
a 20% stake in for fraud - Sydney Morning Herald
*- Samsung Electronics:* Aims to triple its smartphone sales y/y in
2011 to 60M units - Korean press
*- Elpida:* Could see an operating loss in next quarter - US Financial
Press
*- AA: Reports Q4 $0.21 (ex benefit) v $0.19e, R $5.65B v $5.7Be;
-1.7% afterhours*
*- APOL: Reports Q1 $1.63 (ex items) v $1.35e, R$1.33B v $1.26Be;
+6.0% afterhours*
*- SYK: Reports prelim FY10 $3.31-3.33 (adj) v $3.29e, R$7.32B v
$7.3Be; Guides FY11 $3.65-3.73 v $3.67e; +3.2% afterhours*
*- AMD: Reports Prelim Q4 Rev $1.65B v $1.62Be (Guided on Oct 14th Rev
flat for Q4, implying $1.62B); CEO resigns; -4.4% afterhours*
*- NVDA: Intel to pay licensing fees of $1.5B in new 6-year cross
licensing agreement; +5.7% afterhours*
*- JOE:* SEC conducting an informal inquiry into St. Joes policies and
practices concerning impairment of investment in real estate assets -
filing; -9.8% afterhours
*- WDFC:* Reports Q1 $0.53 v $0.61e, R $80.9M v $84Me; -2.7%
afterhours

!! FX/Fixed Income/Commodities !!
*- USD/JPY:* Yen carry trade supported by expectations US interest
rates to rise faster than those of Japan - Nikkei News
- (CH) China's largest steel maker Baosteel sees FY10 Net Profit at
CNY12.8B, +120% y/y
- *BP: (US) Alaska Regulator: Leak location in Alaska pipeline not yet
identified; Investigation continues while North Slope production
remains at 5% capacity*
- SPDR Gold Trust ETF daily holdings rise by 1.5 tons to 1,272.7 tons
(first increase since Dec 19th)
Source: Fxstreet.com