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TradeTheNews.com Asian Market Update: Moody’s Affirms US rating while the Congress reaches an agreement on payroll extension; Singapore data disappoints

***Economic Data***
- (SG) SINGAPORE NOV CPI M/M: 0.6% V 0.3%E; Y/Y: 5.7% V 5.3%E
- (SG) SINGAPORE NOV INDUSTRIAL PRODUCTION M/M: -25.2% V -9.0%E; Y/Y: -9.6% V +12.2%E
- (NZ) NEW ZEALAND NOV MONEY SUPPLY M3 Y/Y: 6.5% V 5.5% PRIOR
- (VN) VIETNAM DEC CPI M/M: 0.5% V 0.4% PRIOR; Y/Y: 18.1% V 19.8% PRIOR

***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -0.8%
- S&P/ASX +1.4%
- Kospi +1.3%
- Taiwan Taiex +2.2%
- Singapore Straits Times +0.4%
- Shanghai Composite +1.5%
- Hang Seng +1.1%
- S&P Futures +0.5% at 1,255
- Feb Gold +0.2% at $1,613/oz
- March Crude +0.4% at $99.92

***Overview/Top Headlines***
- Asian markets gift to the globe was a rally heading into the weekend. Most markets were up over 1%. With a return of risk appetite the USD weakened against the majors but by no more than 30 pips. NZD/USD lost about 20 pips when a fresh 5.8 earthquake hit Christchurch, New Zealand (the same location as the previous devastating one). Corn and wheat futures both lost ground while silver and copper gained nearly 0.9%. After the close House Speaker Boehner (R-OH) said he had reached an agreement with Senate Majority Leader Reid (D-NV) on two month payroll tax cut extension; Congress will be asked to pass a revised version of the short term extension before Christmas. To begin talks on a one year payroll tax cut extension after the holiday break. Conference committee will also work on a two year "Doc fix." Moody's affirmed the US's sovereign AAA rating but assigned a negative outlook. Without further deficit reduction measures, the rating could be placed on review for downgrade sometime in the coming year or two.

- China Securities Regulatory Commission (CSRC) has granted the first group of QFII licenses to 19 firms under trial program. Chinese press reported that China DEC new yuan loans may come in at CNY550-600B v CNY562B in Nov. The property market in Asia continues to show signs of slowing. According to Centaline sales of land in Beijing, Shanghai and Guangshou have fallen. In Taiwan new housing projects in have fallen to a 10-year low.

- Gloucester Coal and Yanzhou Coal reached an A$6.0B merger agreement. Deal is conditional on getting an ASX listing for Yanzhou Australian assets. Gloucester's major shareholder, Noble Group, expects a gain of $200M from Gloucester divestment and fully supports the deal. Yanzhou said it was planning to raise output to 25M tons per year by 2016; Will take steps to cut operating costs and build on margins. The combined companies will create the 9th largest in the world.

***Reminder: Coverage will be limited on Monday the 26th due to the Christmas holiday.***

***Speakers/Geopolitical/In the press***
- (NZ) According to economists from ANZ and other banks, RBNZ is not likely to start tightening policy rates from the current 2.5% until H2 of 2012 - Dominion Post
- (CN) China sovereign wealth fund (CIC) expected to receive $50B capital injection - financial press
- (CN) HSBC estimates China 2012 GDP to slow to 8.6% before rising to 8.8% in 2013; Down from 8.9% GDP expected for 2011 - China Daily
- (KR) Fitch: Could upgrade South Korea's sovereign rating within 1-2 years
- (RU) Russian ambassador to China: Expects 2011 trade with China to be $78B - China Daily
- USD/KRW: (KR) South Korea Govt and Bank of Korea (BoK) agree to take steps to reduce currency volatility

***Equities***
- TM: Exec: Expects Thailand operations to resume normal operations by mid-Jan (slightly behind schedule) - Financial press
- China Airlines, 2610.TT: Issues 568M shares at NT$11.73/shr (approx 12% of shares outstanding)
- Quanta Computer, 2382.TT: May see a 20% m/m decline in shipments of notebooks in Dec - DigiTimes
- UGL.AU: Railcorp renews maintenance contract worth A$1.4B over 7-year term

- QCOM: Sale of airwaves to AT&T for $1.9B has been approved by US regulators - financial press; +0.2% after hours

***FX/Fixed Income/Commodities***
- (CN) China Commerce Ministry will look to improve logistical infrastructure between farms and supermarkets to stabilize food prices - China Daily
- (CN) China's Shandong province plans to build 6-8 reserve facilities for coal by 2015 - Chinese press
- (CN) China and Thailand have signed a currency swap agreement
- GLD: SPDR Gold Trust ETF daily holdings fall by 9.1 tons to 1,258.8 tons (lowest since 1,255.7 on Nov 7th); 2nd session of decline
- (US) NY Fed reports new swap facility at $9.89B with foreign central banks

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