As of 12:00amET:
- Nikkei225 +2.5%
- S&P/ASX +0.3%
- Kospi +0.1%
- Taiex +0.3%
- Shanghai Composite +0.9%
- US S&P Futures 1,111
- Spot Gold $1,163/oz
- Crude oil at $77.21/brl

***Economic Data***
- (AU) AUSTRALIA Q2 CPI Q/Q: 0.6% V 1.0%E; Y/Y 3.1% V 3.4%E; RBA TRIMMED MEAN Q/Q 0.5% V 0.8 %E; Y/Y 2.7% V 3.0%E (3-yr low)
- (KS) SOUTH KOREA JUN CURRENT ACCOUNT $5.0B V $3.8B PRIOR; GOODS BALANCE: $6.4B V $4.2B PRIOR
- (NZ) NEW ZEALAND JUL NBNZ BUSINESS CONFIDENCE 27.9 V 40.2 PRIOR (1-yr low); ACTIVITY OUTLOOK 32.4 V 38.5 PRIOR (lowest level since Oct)

***Overview/Top headlines***
- Despite the mixed and relatively flat close in US indices, Asia markets are in the green across the board. Nikkei225 is leading the charge as strong earnings out of Canon overnight set the bullish tone. Canon rose about 4% as demand from EM overseas benefited the bellwether exporter. Also in the tech sector, late session results from LG Electronics are more mixed because of delay in smartphones and EU crisis-related decline in LCD TV Sales. Company reported Q2 Op Profit KRW126B v KRW310Be on Rev KRW14.4T v KRW7.7Te. Shares of LG fell about 2% following the release of Q2 results.
- Australia Q2 CPI marked the key economic event of the session, tracking disappointing PPI with a much lower than expected data. Q2 inflation data was widely expected to contribute to RBA decision on interest rates in early August, as most recent central bank meeting minutes noted "Major question is whether Q2 CPI materially changes medium term outlook for inflation." Following the release of the CPI, fixed-income market probability for a 25bp hike at next week's meeting fell to virtually Nil from about 30% going into the results.
- IMF annual report on China notably dropped the reference to Yuan being "substantially" undervalued, even though some disagreement was seen among members regarding the extent of undervaluation with a broad range of 5-27%. IMF also called for China to begin raising interest rates and consider introduction of a property tax.


***Macro/FX***
China
- (CH) China's Ministry of Finance (MOF) sells 30 yr bonds at 3.96% v 4.03% on June 17th
- (CH) According to economist at China Academy of Labor Security Sciences, govt may decide to link wage hikes to local CPI trends - Chinese press
- (CH) China Ministry of Finance: To shift focus in H2 in creating an economic model driven by domestic consumption rather than reliance on exports - Chinese press
- (CH) According to Ministry of Land and Resources, China land supply in H1 rose about 65% y/y - China Securities Journal

Australia/New Zealand
- (AU) Australian Opposition Labor Party: Mining tax would be reduced to 28.5% v 30% if elected on August 21st
- (AU) Australia Min: Opposition coalition tax plan a "card trick"; Inflation figure welcome shows the robustness of the economy; Budget inflation figures are realistic

- (AU) Australian Deputy PM / Treasurer Swan: Australia is in a strong position in recovery from global crisis; Must proceed the mining tax reform is vital
- (NZ) New Zealand Fin Min English: Foreign investment is important for job creation

Japan
- (JP) BoJ Kamezaki: Japan's economy showing gradual recovery; Credit problems in Greece may have indirect impact on domestic economy; Strong Yen impacting exporters
- (JP) According to Japan's Research Institute of Construction and Economy, investment in construction in FY11 to rise 1.9% y/y - the first increase in 15 years - Japanese press

Korea
- (KS) South Korea Fin Min: Economy maintaining stronger than expected growth
- (KS) US and South Korea govts to hold talks on Aug 2nd regarding any further financial sanctions against North Korea - Korean press
- (KS) South Korea may raise electricity prices by about 2% starting in early Aug - Korean press
- USD/KRW: South Korea reportedly intervenes to curb KRW gains

- Other
- (IN) Reportedly George Soros is in late stage talks to buy a 4% stake in the India Bombay Stock Exchange for $40M from Dubai Holding - FT

***Equities***

Australia
- GCL.AU: Reports June quarter coal sales 215K tons
- MCC.AU: As rumored, company abandoned a deal with Citic Resources to purchase its stake in a New South Wales mine - The Australian
- TLS.AU: Australian Competition and Consumer Commission to investigate Telstra's plan to heavily cut the price of premium fixed broadband plans; Competitors argue that they are offering at wholesale prices rather than retail - Australian Financial Review
- MCC.AU: Reports Q4 production 1.3M tons, -11% y/y, FY output 5.3M tons ; Appoints Graham Yerbury CFO, effective September
- LGL.AU: Reports Q2 gold production 244Koz, -17%; Affirms FY10 production 1.0-1.1M
- ALS.AU: Reports FY10 Net loss A$124M v profit A$22Me, Rev A$773M v A$771Me
- LGL.AU: Managing Director: Australian court approves Newcrest takeover; Scheme meeting to take place on Aug 23rd
- BSL.AU: Comments on alliance with Nippon Steel: A long term technical collaborative agreement to develop next generation coated steel products

Japan
- All Nippon Airways may report Q1 Net loss of ¥3B, down from loss of ¥42B on recovery in international traffic - Japanese press
- JS Group Corp may report Q1 Op profit of ¥6B (¥3.4Be) - Japanese press
- Mitsubishi Chemical may report Q1 Op profit of ¥60B (¥32Be) on strong sales of LCD material - Japanese press
- TM: Looking to expand overseas production because of rising JPY - Japanese press
- TM: Plans to delay Prius production in the US by as many as 6 years when they may introduce new Prius Hybrid model by 2016 - Japanese press
- Mazda Motor started reducing production in US on weaker than expected sales - Japanese press
- PC: Reportedly to begin sales of 3D camcorders in August
- JX Nippon Oil & Energy to sell solar power systems for condominiums - Japanese press
- Toho Gas Co reports Q1 Net ¥7.6B v ¥15B y/y, Op Profit ¥12.2B v ¥24B y/y, Rev ¥102.7B v ¥106B y/y
- Yahoo! Japan signs deal with Google as previously reported to adopt Google's search engine

***Commodities***
- API PETROLEUM INVENTORIES: CRUDE: +3.1M V -1.6ME; GASOLINE: +877K V +500KE; DISTILLATE: +407K V +2ME; UTILIZATION: 87.4% V 91%E
- (CH) China to spend CNY15B on mineral exploration - China Business News
- (JP) Japan June rolled copper products output: +29% y/y at 76.4 tons
- Commodities Update: Front month crude up $0.02 at $77.10; Spot gold at $1,163 in early trading.


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