Morning Memo: Friday, October 25, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  
We hope you find this useful and informative....and as always, that you'll share feedback!!
5:36am ET...

• Asia..generally lower on combination of concern over liquidity issues in China as overnight lending rates continue to rise, along w/earnings data in the region that was either uninspiring or outright negative in tone.
• Japan...stronger Yen hurt exporters.  Nikkei drops over 2%.  Also, inflation level nears five-year high as overall weaker Yen has raised imported goods prices. While more inflation is a goal of Abenomics, the inflation that Abenomics wants to see is more demand driven inflation, not simply price driven due to fx moves!
• China...short-term funding rates continue to rise, refreshing bad memories of last Spring's spike in rates.  (Separately, China announced a new Prime Lending Rate which will be used as a benchmark for other loan rates in the country. The rate will be an average of nine Chinese bank lending rates).
• Australia....it's been a good week for Australian equities as they've hit five-year highs on an overall stabilizing view of their primary trading partner's economy: China (despite the short-term funding issues).
• South Korea...Q3 GDP grew at 3.3%, fastest rate in three years, and beating analyst expectations.
• Flow of funds:  ANZ reports weekly flows into Asia equity markets continues to rise.  Take note, as reported in The FTs fastFT:
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• Europe...generally lower in early hours.
• Germany...IFO business sentiment survey drops to 107.4 in October, missing estimates and disappointing markets. First drop in six months.
• UK...BOE Gov Carney announces a change in BOE policy towards banks, essentially providing more 'backstop' measures when/if needed including accepting broader range of collateral on loans to banks, lending for longer terms and reducing the cost for accessing the Bank's help.
• UK...Q3 GDP inline w/expectations at 0.1% q/q, 1.5% y/y growth.
• more later.....
• later:
• Durable Goods...headline number in line at +3.7%.  Ex-transportation weaker than expected -0.1%.

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