Asian Market Update – 3/15/10
Monday, March 15th, 2010Asian Market Update: Cautious comments from China’s Premier Wen, coupled with inflation concerns, lead the Shanghai Composite below the 3,000 level
ECONOMIC DATA:
- (NZ) New Zealand Feb Performance of Services Index: 53.7 v 53.1 prior (expands for 4th straight month)
SPEAKERS/PRESS
- China: China’s Premier Wen, in his closing comments at the National People’s Congress, said various risks to the global economy, including unemployment in major economies and sovereign debt concerns, could cause setbacks in the global economic recovery and may even lead to a “double dip.” Wen said the US must take concrete steps to reassure investors about the safety of the US dollar and Treasury holdings. Also, Wen reiterated that the Chinese yuan would remain “basically stable.” As speculation continues to mount that higher inflation will cause the PBoC to raise interest rates, over the weekend the PBoC’s Gov Zhou noted that CPI remained within expectations.
- Australia: RBA Deputy Gov Edey said domestic bank loan losses appear to have peaked. However, Edey said that global bank loan losses are still rising.
- South Korea: Finance Minister Yoon was quoted in the press as saying the government would maintain its stimulus policy stance until at least Nov. Last week, Yoon noted that the government would take a cautious approach regarding its plan to exit stimulus measures.
EQUITIES
- Most Asian indices have moved off of the session’s best levels, following the above mentioned cautious comments from China’s Premier Wen. Also, monetary tightening concerns are being cited for the pull back in equities. As of the time of writing, the Shanghai Composite is moving lower and trading below 3,000 on losses in the financial and basic materials sectors. After hitting a 7-week higher earlier during the session, the Nikkei 225 has pared its gains on declines in resource related stocks. Australia’s S&P ASX 200 is down by more than 0.30% on losses in gold miners. South Korea’s Kospi has lost more than 0.50% on declines in the oil/gas and utilities sectors. Taiwan’s Taiex is down by more than 0.50% on declines in financials, while the Hang Seng is down by more than 0.50% on losses in shares of China Shenhua.
CURRENCIES/FIXED INCOME/COMMODITIES:
- The USD is gaining against the European major and commodities currencies on the declines in equities. Also, risk aversion has pulled the yen into positive territory against most currencies.
- Spot Gold is higher by more than 0.10% and is trading above $1,100/oz. Of note, on today’s session both Spot Gold and the US dollar index are gaining, as today’s advance in gold has been driven by XAU/GBP and XAU/EUR. Crude oil is lower by more than 0.30% and trading below $81/bbl, tracking the weakness in equities. In other commodities, inflation concerns have helped push Shanghai Copper to a 2-week low.
Written by Trade the News
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