- Forex: The USD extended losses during a quiet Asian session, with traders hearing rumors of Asian central banks buying EUR. The ECB's Weber's comments on Wednesday were quite hawkish, correcting some of the easing expectations in 2009, and further supporting the EUR. EUR/USD broke above hourly resistance at 1.4740, and also triggered stops after breaking above yesterday's high at 1.4777. AUD/USD broke above 0.8600, supported by bullish data, and traders reported solid demand out of Tokyo (hearing that there will be "toshin" demand for the fix). Korean authorities once again used verbal jawboning to support the KRW, warning that they will take action if "herd behavior" moves the KRW.

- Japan's Nikkei business daily reported that the United States, Europe and Japan planned to intervene and rescue the USD when it was plunging in March, citing sources familiar with the situation. According to the paper, authorities drew up a currency contingency plan over the weekend of March 15-16, at the time when Bear Stearns collapsed. The officials did not specify levels that would initiate intervention, but in the event of a free-fall they agreed to aggressively buy the greenback. Analysts stressed the importance of this new information: Even though a rescue never took place at the time, it shows that global monetary officials had agreed on action to support the USD, which would be important in the future if the currency were to tumble again. Officials declined to comment on the report.

- Australia's leading index continues to deteriorate: (AU JUNE CONFERENCE BOARD LEADING INDEX: -0.5% V -0.1% prior) The leading index declined again in June, the fifth monthly decrease in the index this year. Share prices, rural goods exports, and the yield spread made large negative contributions to the index in June, more than offsetting sizable increases in money supply and building approvals. The six-month change in the index stands at -1.3% (a -2.6% annual rate), down sharply from 2.8% (a 5.7% annual rate) in the second half of 2007. Remaining unchanged in June, the coincident index now stands at 145.1. The coincident index has been flat in recent months, and is only slightly higher than its level in January.

- Surprise jump in Australia's Q2 capital expenditure makes an economic contraction the June quarter less likely: (AU Q2 PRIVATE CAPITAL EXPENDITURE: 5.7% V 2.0% expected, prior revised to 1.0% from -2.5%) Commonwealth Bank of Australia chief economist Michael Blythe said the surprise jump in capital spending showed the global credit crunch had failed to affect business plans, which would make a June quarter economic contraction less likely. “It says, more importantly, that the changes to business confidence and the slowdown in the first half of the year and concerns about the global credit crunch haven't dented the positive story for Australia,” he said.

- The Bank of Japan's Suda said that they will not put down their guard against inflation, adding that Japan's growth momentum is slowing. Suda added that the slowdown in Europe and the U.S. is intensifying.

- Equities: At 0:13 EDT Japan's Nikkei is flat, the S&P/ASX200 is +1.00%, South Korea's KOSPI is -0.57%, Hong Kong's Hang Seng index is -1.29%, and the Shanghai composite index is +0.51%. The S&P500 futures contract lost -0.19% since the U.S. close, last trading at 1,279.70. Wall Street's positive lead quickly fizzled in Tokyo, with property developers adding to most of the downside and banks trading flat. Mining companies once again provided most of the support to the S&P/ASX200, with yesterday's close above 5,000 sparking some technical buying at the open. Automakers led the declines in Seoul, while financial companies traded sharply higher in Shanghai. Sentiment in Shanghai got a boost on unconfirmed reports that the Chinese government may lower or abolish the tax on stock dividends.

- Commodities: Nymex crude oil gained +0.63% between 18:00 EDT and 0:17 EDT, last trading at $118.90/bbl. Investors continue to worry about the potential impact of Tropical Storm Gustav, which may impact production in the Gulf of Mexico. According to the NHC, Gustav could reach Louisiana's coast by Labor Day. Since the storm is anticipated to hit the oil drilling region of the Gulf in the middle of the weekend the potential for substantial movement before and after the holiday is high, according to analysts. Bullish U.S. weekly oil inventories data and a weakening USD also added to oil's upside. Spot gold gained +0.60%, last trading at $839/oz.

Asian Macro sector headlines

• Today 01:25am
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• Today 01:12am
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• Today 01:04am
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• Today 00:47am
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• Today 00:24am
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