***ECONOMIC DATA***

- 20:30 (AU) Australia Q3 Import Price Index Q/Q: -3.0% v -2.8%e; Export Price Index: -9.6% v -4.7%e

- 01:00 (SI) (SI) Singapore Sept CPI M/M: -0.1% v 0.1%e; Y/Y: -0.4% v -0.2%e

***SPEAKERS/PRESS***

- Asian equity markets saw the return of buying interest after some caution yesterday that followed a mixed set of Q3 GDP and September economic data from China. Another day of triple-digit gains in the Dow, more solid returns in financials, and evidence of resilience in US consumption via strong Q3 earnings report from Amazon are also helping risk-oriented bias sustain itself. With just about 90 minutes to go in Tokyo, Nikkei225 and Korea's Kospi are up 0.6% and S&P/ASX is gaining 1%. In the China region, Shanghai Composite and Hang Seng picked up 1.5%, while the Taiex is firmer by 0.5%. Ahead of the Friday open in the US, front-month S&Ps are up 0.3% at 1,094.

- Despite the rally in Chinese markets, local officials appear to have retained their cautious outlook on display since yesterday's economic data. NDRC researcher Wang said the fundamentals of China's economic recovery are still not sufficient, with the possibility of a slower rebound becoming more apparent. Top central bank advisor Fan Gang also urged policy makers to maintain the fiscal stimulus through 2010, just as the market sentiment is moving in favor of a tighter policy. On the upside, Chinese Ministry of Commerce researcher said exports may resume the y/y growth by Q4. Recall in the prior session, Chinese officials saw an insufficient external demand amid an economic recovery requiring "consolidation".

- In other regional speakers, Australia Finance Minister expressed some discomfort with the sharp gains in the Aussie putting pressure on the local exporters, noting the currency rally has both upside and downside effects. Commentary from Treasurer Swan was also mixed, calling for more govt measures on housing supply while acknowledging the diminishing impact of fiscal stimulus in 2010. Stateside, a pair of Fed speakers reflected on currency trends and monetary policy prospects. Chicago's FOMC voter Charles Evans said the USD decline was not sufficient to alter his outlook on inflation, but noted that the Fed does monitor the impact of the dollar movement on prices. Additionally, Evans saw US unemployment remaining problematic for quite some time, rising above 10% and remaining elevated above the natural 5% rate. Non-voter Plosser said he was willing to tighten rates earlier than other Fed members, urging policymakers to reduce the Fed balance sheet "before it’s too late".

*** EQUITIES ***

- In individual equities, a pair of large-caps in Korea continued to match and outperform estimates on Q3 earnings. In tech, Hynix posted operating profit in line at KRW209B on sales of KRW2.1T v KRW2.0Te. Following prior session's strong Hyundai results, Kia Motors was just as impressive, reporting Op Profit KRW313.5B v KRW276Be on sales of KRW4.5T v KRW4.3Te. Kia Motor also commented on its rising 2009 market share boosted to 2.6-2.8% from 2.1% in 2008. Over on the Nikkei, Japan Airlines saga saw FT raising its capitalization target to ¥550B from ¥300B, just as Japanese govt officials remain unable to commit to a timeline on the company bailout. Elsewhere in Japan, Mitsui OSK said it would delay its container ship delivery expected next year. Kirin Brewery traded firmer after a Morgan Stanley upgrade to overweight, while JVC Kenwood fell after confirming press speculation it may miss 1H earnings estimates. In Sydney, Woodside Petroleum saw a 6% Q3 revenue decline at A$1.1B, with shares losing 1.5% on the day. Wesfarmers traded higher however, with Q1 food/liquor sales improving by 7.3% amid new plans for additional rollouts in 2011.

*** CURRENCIES/FIXED INCOME/COMMODITIES ***

- In currencies, the greenback came back under pressure across the board, as equity market strength returned risk-related flows. EUR and CHF rose to fresh 14-month highs at 1.5050 and 1.0035 respectively. Sterling was also stronger, approaching 1.67 handle ahead of the critical GDP report expected to show UK emerging out of recession. In commodity FX, AUD traded sideways, contained by 0.93, while USD/CAD was bid on fresh speculation the BOC may be progressively more uncomfortable with the loonie rally. Japanese Yen remained offered, with USD/JPY re-testing US session highs around 91.70 and EUR/JPY pushing to 2-month highs at 137.80.

- Crude oil prices are higher and trading above $81/bbl, tracking the gains in Chinese equities. According to an earlier report in the Chinese press, a Commerce Ministry researcher was quoted as saying that China's exports might resume their growth in Q4 due to low y/y comparisons and a recovery in global trade. As oil continues to move higher, official concerns about price levels have increased. During yesterday's US session, the IEA's Director Tanaka was quoted as saying the fast increase in oil prices could slow the global economic recovery. Also, the OPEC Secretary General said the cartel might increase output in December under the right conditions. Overall, oil prices are on track to gain for the 4th consecutive week. Spot Gold is marginally higher and trading above $1,060/oz. Gold is on pace to end higher for the 4th consecutive week. Shanghai Copper prices are advancing, tracking the gains in equities. Later today, the Shanghai Futures Exchange will release its weekly copper inventories.

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