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Market View

Asian stocks advanced for a second day

Wednesday, March 14, 2012 6:51 AM GMT

Good Morning,

- Asian stocks advanced for a second day, while regional bond risk declined and the yen tumbled to an 11-month low after the Federal Reserve bolstered confidence in the U.S. financial system and raised its economic assessment.

- The resilience of the largest U.S. financial firms when tested against a recession more severe than the last one shows regulators have succeeded in pushing banks to build fortress-like balance sheets.The Fed yesterday said 15 of 19 banks would be able to maintain capital levels above a regulatory minimum in an "extremely adverse" economic scenario, even while continuing to pay dividends and repurchasing stock.(Citigroup fails) Those results were due to scrutiny by the Fed on capital payouts over the past three years, the central bank said.

- The Federal Open Market Committee left the fed funds rate unchanged around a 0.25-0.00% range, reiterating that economic conditions -including low rates of resource utilization and a subdued outlook for inflation over the medium run-are likely to warrant exceptionally low levels for the federal funds rate at least through late-2014. Overall, the statement noted that the economy has been expanding moderately and that labor markets have improved further, alongside a notable decline in the unemployment rate (somewhat dampened by the fact that the unemployment rate remains elevated).

- US Elections. Santorum wins Alabama and Mississippi Primaries

- Fitch raises Greece's long term rating (on its new bonds) to B-, with a stable outlook. This is up from C and still the lowest in the Eurozone.

- Results of Japan MoF's business outlook survey: Big firms' corp. sentiment index for Jan-Mar period remained at -2.7, compared with -2.5 in Sep-Dec period. Big firms expect sentiment index to reach +1.3 for Apr-June period and +7.3 for Jul-Sep period. Big manufacturers' sentiment index fell to -7.3 for Jan-Mar, but is expected to hit +2.3 for Apr-Jun quarter.

- Japan chief cabinet sec Fujimura said that Govt. will continue to work with BOJ to beat deflation, revive economy.

- UK Treasury to mull selling 100 year and perpetual bonds

- Australia's Westpac consumer confidence fell by 5% mm to 96.1 in March from 4.2% mm in Feb.

- NZ's online skilled job vacancies increased by 6 pct mm in February compared to January.

- Chinese Premier Wen Jiabao said that 2012 could be one of the most difficult year for China but could be the most hopeful year for China; would "run its own affairs amidst the financial crisis"; US-China are mutually beneficial; will increase cooperation with the US to tackle imbalances; will increase imports from the US; US should lift restrictions on exports to China; mentioned that he has many regrets and feels guilty for issues in the society; recognise that a lot of work has not been conducted properly; wants to increase infrastructure investment in the US; current account surplus eased to 2.8% of GDP in 2011; China has improved its balance of payments; effective exchange rate appreciated by 30% since 2005; CNY is close to equilibrium level; CNY will likely see two way flexibility; China will continue with exchange rate reform; will look for financial cooperation with Taiwan; is willing to travel to Taiwan after retirement and will depend on "relevant conditions";


Today's Figures


10.30 UK Claimant count unem. change
10.30 UK ILO unemployment rate
10.30 UK Avg week earnings
11.00 CH ZEW investor sentiment
11.00 EZ Industrial production mm and yy
11.00 EZ Inflation final mm and yy
12.00 US Mortgage market index and change
12.00 US MBA Purchase Index 13.30 CA Capacity utilization
13.30 US current account
13.30 US Export and Import prices mm


(CET)

Have a good day !

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