Asian Market Update

China trade balance surprises, Australia cuts CPI and GDP outlook

Economic Data

(CN) CHINA JAN TRADE BALANCE: $27.3B V $10.4BE (6-month high)

(CN) CHINA Q4 CURRENT ACCOUNT: $59.8B V $53.4B PRIOR; 2011 CURRENT ACCOUNT: $201.1B

(AU) RESERVE BANK OF AUSTRALIA QUARTERLY POLICY STATEMENT: INFLATION OUTLOOK PROVIDES SCOPE TO CUT RATES

(JP) JAPAN JAN DOMESTIC CGPI M/M: -0.1% V 0.1%E; Y/Y: 0.5% V 0.8%E

(PE) PERU REFERENCE RATE LEFT UNCHANGED AT 4.25%, AS EXPECTED

(NZ) NEW ZEALAND JAN NZ CARD SPENDING TOTAL M/M: 1.0% V 0.7%E; RETAIL M/M: 1.2% V 0.5%E

(PH) PHILIPPINES DEC TOTAL EXPORTS Y/Y: -20.7% V -17.4%E; TOTAL MONTHLY EXPORTS: $3.3B V $3.3B PRIOR

(IN) INDIA DEC INDUSTRIAL PRODUCTION Y/Y: 1.8% V 2.6%E

Markets Snapshot (as of 05:30GMT)

Nikkei225 -0.2%

S&P/ASX -0.9%

Kospi -0.9%

Taiwan Taiex -0.6%

Singapore Straits Times -0.3%

Shanghai Composite +0.5%

Hang Seng -0.6%

S&P Futures -0.5% at 1,341

April gold -0.5% at $1,733/oz

March Crude -0.4% at $99.47

Overview/Top Headlines

Lack of a bailout agreement for Greece weighed heavily on markets today, on top of a large trade surplus and shrinking imports/exports from China in January.

With a trade surplus of $27.3B, it was a 6 month high. Imports fell 15.3% much lower than expected and down from the increase of 11.8% prior. Exports fell one-half of a percent, a smaller decline than expected but down from the increase of 13.4% prior. Oil imports rose, copper and iron ore imports declined.

After the trade data all markets that were not already in negative territory declined and those that were continued to fall, with the exception of China.

AUD/USD was hit double today falling over 100 pips from yesterday's session to $1.0702, first the RBA cut GDP and inflation forecasts for the year then the China trade data (China is Australia's largest trading partner). RBA said that the outlook for consumer prices provides "scope for easier monetary policy should demand conditions weaken materially." Commodities were all weaker as well, wheat fell for the 4th consecutive day, corn declined for the second consecutive day and copper was down in the session but continues to track higher in its longer term trend. Greenback was positive against emerging markets with risk appetite weaker.

EU's Juncker affirmed that Greece must pass its latest austerity measures into law and come up with €325M in spending cuts before the EU will issue a second round of bailout funds to the country. Greece is set to vote on the measures over the weekend according to PM Papademos, he also noted that Greece will need to decide if it will stay in the Eurozone by Feb 15th. EUR/USD was not too concerned, seeing some slight weakness testing down to $1.3255.

Speakers/Geopolitical/In the press

(HK) Hong Kong Monetary Authority (HKMA) will loosen the calculation of yuan-denominated assets in the statutory liquidity ratio, to allow more lending - HK press

(ID) Indonesia Central Bank Gov: Still room to maneuver monetary policy to support the economy; Current forex level is still good for trade

(FR) Fitch's Stringer: Reiterates most likely will not resolve negative outlook on France until next year at the earliest; France still has the capacity to keep AAA rating

(CN) China Jan land sales in 300 cities fell 62% y/y to 56.78M sq meters and -63% m/m - Chinese press

(JP) Japan Fin Min Azumi: Will intervene in the forex market as appropriate; Will make any FX decision myself; Will not hesitate to take unilateral intervention

(JP) Japan Cabinet Office Economic Planning Association: Cut Japan's FY12/13 GDP outlook to 1.86% from 1.89% - Nikkei News

Equities

Acer, 2353.TW: Guides Q1 shipments to be better than previously guided decline of 10-15% q/q; Q2 may be "slightly better than Q1"

DBS.SG: Reports Q4 Net S$731M v S$693Me; Rev S$1.92B v S$1.73B y/y

Alibaba.com, 1688.HK: Chatter that the company will take the Hong Kong listed company private; Yahoo may end up with direct stake as a result of the deal - financial press

NCM.AU: Reports H1 Net profit A$659M v A$438M y/y; Rev A$2.34B v A$1.97B y/y

Sapporo Holdings, 2501.JP: Reports FY11 Net ¥3.16B v ¥8.1Be, Op Profit ¥18.9B v ¥20Be, Rev ¥454.1B v ¥466Be

ANZ.AU: Cuts 3-year fixed mortgage rate by 15bps; Raises variable mortgage rates by 6bps

US Equities

ATVI: Reports Q4 $0.62 v $0.56e, R$2.41B v $2.2Be; approves $1B share buyback program (7% of market cap); increases dividend to $0.18 from $0.165; +1.0% afterhours

EXPE: Reports Q4 $0.58 v $0.54e, R$787M v $812Me; -3.7% afterhours

LNKD: Reports Q4 $0.12 v $0.07e, R$168M v $160Me At the end of Jan passed 150M member point; Jan was strongest hiring for LinkedIn itself in the history of the company (2/3rds were for sales) - conf call; +8.9% afterhours

NUAN: Reports Q1 $0.34 v $0.36e, R$360.6M v $392Me; -13.4% afterhours

FX/Fixed Income/Commodities

(CN) China Water Official: Will invest CNY140B into water projects this year - Chinese press

USD/CNY: (CN) PBoC sets yuan mid point at 6.2937 v 6.2952 prior close (new yuan high since the July 2005 revaluation)

GLD: SPDR Gold Trust ETF daily holdings rise by 1.2 tons to 1,278.3 tons (3rd consecutive days of increase, highest since 1,280 on Dec 15th)

CME cutting margin requirements on Gold (cuts by 11.7%), Silver (cuts by 13.5%), Copper (cuts by 13%), and Crude Oil futures (cuts by 8.9%)