***ECONOMIC DATA***

- (AU) Australia Q3 NAB Business Confidence: 16 v -4 prior (First positive print since Q4 of 2007, highest level since 1994)

- (PH) Philippines Aug Trade Balance: -$144M v -$715M prior; Total Imports: -28.3% v -31.6% prior; Monthly Imports: $3.62B v $4.03B prior



***SPEAKERS/PRESS***

- Asian equity markets surrendered the gains of the prior session, trading in the red across the board following an ominous bearish midday reversal in the US. With 90 minutes left in Tokyo, Nikkei225 is around session lows, falling 1.4% after shipping companies missed their 1H earnings estimates while cutting their FY outlook. S&P/ASX is also down 1.4% following the midday US session dollar rally weighing on commodities, and Shanghai Composite is off by over 1.5% as China rally yields to disappointing earnings from Bidu. More resilient Korea and Taiwan markets continued to benefit from recent tech sector strength but also traded lower, falling about 0.5%. Ahead of the Tuesday US session, front-month S&Ps are off 0.2% at 1,064.

- Cautious sentiment across the region generally overshadowed both the positive economic calendar print in Australia as well as hints of prolonged accommodation for central banks in Korea and New Zealand. In Australia, 15-year high in NAB Business Confidence was seen as far too marginal for a notable impact ahead of the quarterly CPI report later this week. In Korea, Vice Finance Minister noted that hasty rate hikes carry much larger risks than later tightening. Over in New Zealand, Prime Minister Key reiterated earlier comments made this weekend, suggesting it was unlikely for interest rates to rise this year.

- Japan's Finance Minister Fujii reaffirmed the new administration's commitment to fiscal discipline, pledging to keep new bond issuance in FY2010/11 below ¥44T. Regarding the state of the economy, Fujii said conditions were improving in the eyes of the BOJ but saw their outlook as potentially biased. Separately, Japan's Finance Ministry raised its assessment on 7 of 11 regions, but also noted that overall the economy is still in a "severe" state.

*** EQUITIES ***

- In individual equities, Japanese shippers continued a string of year-long underperformance to broader market, with the big three missing across the plane in first-half earnings while also cutting full-year outlook. Mitsui OSK reported H1 Net loss ¥10B v loss ¥8Be on sales of ¥624.6B v ¥640Be, cutting FY09/10 net profit to ¥2B from ¥30B on Rev of ¥1.30T v ¥1.35T prior. Nippon Yusen posted H1 Net loss ¥29.4B v loss ¥32Be on Rev ¥794.5B v ¥770Be, but also cut FY earnings view to loss ¥27B v loss ¥5B prior. Kawasaki Kisen reported H1 Net loss ¥43.3B v profit ¥51B y/y on sales of ¥400.5B v ¥735.5B y/y. All three companies reported during midday break, trading lower by about 5% on the other side of recess before paring some of those declines. Elsewhere in Japan, Honda registered to sell ¥150B in debt ahead of its own 1H earnings results expected after hours. Japan Airlines said it was not the source of press speculation the company may cut nearly 30% of its workforce in the coming 5 years.

- Outside the Nikkei, Korean firms generally saw better earnings results. Hyundai Mobis reported Q3 net KRW416B v KRW303Be, Op profit KRW356B v KRW307Be, Rev KRW2.87T v KRW2.44Te, and Hyundai Engineering posted Reports Q3 Net KRW103.5B v KRW112Be, Op profit KRW126.2B v KRW135Be , Rev KRW2.4T v KRW2.2Te. In materials, Posco denied press speculation that it may consider a price cut to address overcapacity in the steel industry, even as Minmetals executive forecasted China copper demand slow amid tighter credit, high imports and record production levels. Elsewhere in China, Bidu missed on the top line, posting 187.3M v $188Me in sales, while also offering disappointing Q4 guidance of $174-180M v $204Me. Shares of BIDU traded down by over 10% afterhours, also weighing on related names such as Google.

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

- In currencies, US Dollar largely consolidated the gains made across the board during the US session. EUR/USD traded sideways between 1.4850-1.49, USD/CHF retreated below 1.0180, and GBP/USD briefly extended its recent selloff below 1.63. In commodity FX, both AUD and CAD ranged against the dollar around 0.9170 and 1.0680 respectively, while NZD fell to 1-weeks lows below 0.7450 on dovish PM Key comments. Japanese Yen was also range-bound across the majors, trading around 92.15 and 137.00 against USD and EUR respectively.

- Crude oil is trading below $79/bbl, after losing more than 2% during the NY floor session. Factors that have weighed on oil prices include the firmer US dollar, weaker equities and speculation that OPEC may raise production. Spot Gold is gaining by over 0.3% and trading above $1,040/oz on bargain hunting. During yesterday's COMEX session gold prices declined by more than $13. Shanghai Copper prices are lower by more than 1%, tracking the earlier declines in the LME metals.

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