Heading towards the halfway point of today’s session, positive sentiment has spread over Asian equity markets except Japan, where markets are closed for their ‘Coming of Age Day’. However, over the weekend, Japanese PM Abe warned the Bank of Japan to set a 2% inflation target and make it a medium term, which drives the continuing weakness in JPY. Keep in mind, the Bank of Japan’s next meeting is scheduled to be held on January 21st/22nd, where the central bank has agreed to evaluate its inflation goal.
Over in China, the Shanghai Comp. and Hang Seng are holding on to gains, buoyed by the substantial growth in QFII released over the weekend, which showed that China awarded around USD 16bln of quotas in 2012. Adding to the positive tone, CSRC’s chairman Guo said that they can increase 10 times the level of RQFII and QFII investment.
In the FX Market, EUR/USD was benefited by comments from EU’s Rehn over the weekend, who said that the European Commission has opened the door to the possibility of giving Spain more time to meet its budget deficit target. Also, optimism over solving the US debt ceiling issue was conveyed by the Fed’s Evans, which supported the risk-on sentiment. As a result, EUR/USD hit its 10-month highs, piercing 1.3400 level.
In terms of macro-economic data, AUD weakness has been observed across the board immediately after the release of Australian Home Loans for November, which unexpectedly slumped for the first time in four months, printing at -0.5% versus Exp. 0.5%. While, initial losses in AUD have now been pared.
Looking forward, there is not much in the way of market moving data scheduled on the calendar and things should be fairly quiet except any unexpected developments.
As of 0258 GMT:
ASX200 (+0.24%), Shanghai Comp. (+0.78%), Hang Seng (+0.41%), KOSPI (+0.23%)
13 Jan 2013 - 22:00 - Fixed Income Data - Source: RANsquawk
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