market update for asean+3 jan2013

MARKET UPDATE FOR ASEAN+3

January 2013


2 January 2013, 17:00 local time SGT (UTC+8)

MARKET DEVELOPMENTS

European Stocks Rise, Dollar Drops on U.S. Budget Bill. European stocks advanced, extending last years 13 percent global rally, metals and oil gained while the dollar and Japanese yen weakened after U.S. lawmakers passed a bill that averted spending cuts and tax gains threatening a recovery in the worlds biggest economy. The Stoxx Europe 600 Index jumped 1.1 percent as of 8:28 a.m. in London, heading for its highest close since May 2011. Copper in London gained 2.2 percent as oil in New York rose 1 percent. The yen tumbled 1.1 percent to 115.77 per euro, the biggest drop in a week, and the Dollar Index, which tracks six peers, fell 0.4 percent. Treasury 10-year notes and German government bonds retreated.

Oil Heads for Three-Month High as U.S. House Passes Budget Bill. Oil rose in New York, heading for the highest close in three months, after the U.S. House passed a Senate-approved deal that will avert tax increases and spending cuts that threatened growth in the worlds biggest economy. Futures increased as much as 1.1 percent after legislation to avoid the so-called fiscal cliff was passed by a vote of 257-167 in the House today after Republicans abandoned an effort to add spending cuts to the Senates plan. A government gauge of Chinas manufacturing showed a third month of expansion yesterday, a sign that the recovery in the worlds second- biggest oil consumer will extend to this year.

Gold Rallies to Two-Week High as U.S. House Passes Budget Bill. Gold rose to a two-week high, gaining with other commodities as the dollar weakened, after U.S. lawmakers passed legislation averting income-tax rises for most workers, easing concern that a recovery in the worlds biggest economy may be derailed. Silver, platinum and palladium climbed. Spot gold increased as much as 0.7 to $1,684.75 an ounce, the highest price since Dec. 18, and was at $1,681.52 at 4:05 p.m. Singapore time. Cash bullion ended 2012 up 7.1 percent for a 12th year of gains. Silver, platinum and palladium added at least 0.3 percent. The U.S. House of Representatives 257-167 vote broke a yearlong impasse over how to head off the $600 billion in automatic tax increases and spending cuts known as the fiscal cliff that began taking effect yesterday. The Senate had earlier passed the bill 89-8 and it goes to President Barack Obama for his signature. The dollar weakened 0.4 percent against a six- currency basket while oil and base metals climbed.

BREAKING NEWS

GLOBAL

Bipartisan House Backs Tax Deal Vote as Next Fight Looms. The U.S. House passed a bill undoing income tax increases for more than 99 percent of households, giving a victory to President Barack Obama even as Republicans vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling. The 257-167 vote just after 11 p.m. last night capped a tension-filled day as Republicans balked at a bipartisan Senate measure. House Speaker John Boehner ordered a vote even though 151 of 236 Republicans, including Majority Leader Eric Cantor, ultimately voted no. Obama said hed sign the bill into law.

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Bond Tab for Biggest Economies Seen Falling $220 Billion. The worlds leading economies will have $220 billion less sovereign debt to refinance in 2013, cutting supply after every major government bond market rallied for the first time since the 2008 financial crisis. The amount of bills, notes and bonds coming due for the Group of Seven nations plus Brazil, Russia, India and China will drop to $7.38 trillion from $7.60 trillion in 2012, according to data compiled by Bloomberg. Japan, the U.K., Germany, France, Italy and Brazil will see a decline, while the U.S., Canada, Russia, India and China will face an increase.

Pound Jumps to 16-Month High on Fiscal-Cliff Deal. The pound rose to its strongest level in 16 months against the dollar as U.S. lawmakers passed legislation to avert automatic spending cuts and tax increases, reducing demand for the U.S. currency as a haven. Sterling also appreciated versus the yen before a report today that economists said will show U.K. manufacturing stabilized last month. The gauge based on a survey of purchasing managers was unchanged at 49.1 in December, Markit Economics and the Chartered Institute of Purchasing and Supply will say today, according to the median estimate of 29 economists surveyed by Bloomberg News. The measure has recovered from a three-month low of 47.3 in October. U.K. government bonds slumped. The pound appreciated 0.4 percent to $1.6317 at 8:14 a.m. London time, after reaching $1.6381, the strongest level since Aug. 30, 2011. Against the euro, the pound slipped 0.2 percent to 81.34 pence. The 10-year gilt yield rose eight basis points to 1.91 percent.

Australia Home Prices Drop for Second Year as Consumers Cautious. Australian home prices fell for the second-straight year as sluggish consumer sentiment dented the impact of interest rate cuts. House and apartment prices across the nations eight state and territory capitals fell 0.4 percent in the 12 months to Dec. 31, according to the RP Data-Rismark home value index, after a 3.8 percent decline in 2011. Prices are expected to rise in 2013, with increases constrained to levels between inflation and wage growth, RP Data said.

REGIONAL

Hu Jintao Says China to Step Up Efforts to Support Growth. China will work toward bolstering global economic growth in 2013, President Hu Jintao said in a New Years Eve address, amid optimism that a recovery in the worlds second-biggest economy is gaining traction. The nation will step up efforts to promote strong, sustainable and balanced growth in the world economy, Hu said in the speech broadcast by state radio and television. China achieved stable economic development in 2012 and will seek to do the same this year while making restructuring of its growth model a focus, he said. Hus last New Years Eve address before he steps down as president in March signaled Chinese leaders confidence the economy may be rebounding after a seven-quarter slowdown. A recovery may facilitate the transfer of power to Xi Jinping, appointed head of the Communist Party in November and set to become president, as authorities seek to assuage discontent sparked by corruption and a widening income gap.

Yen, Dollar Fall After U.S. Congress Passes Bill to Avert Cliff. The yen and dollar weakened against most major counterparts as U.S. lawmakers passed legislation to avert the so-called fiscal cliff of automatic spending cuts and tax increases, reducing demand for refuge assets. The Dollar Index (DXY) dropped as the House of Representatives approved a bill that prevents income taxes from rising for most U.S. workers. The yen fell past 87 per dollar for the first time in 2 1/2 years after Japans Prime Minister Shinzo Abe reiterated his intention to weaken the nations currency.

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South Koreas won reached a 16-month high as Finance Minister Bahk Jae Wan said the nation is reviewing possible currency measures.

Indonesia inflation slows a second month. Indonesias inflation slowed for a second month in December, supporting the central banks decision to hold off interest-rate increases as exports slump. Consumer prices climbed 4.3 percent from a year earlier last month, after a previously reported 4.32 percent gain in November, the statistics bureau said in Jakarta today. The median estimate in a Bloomberg News survey of 15 economists was 4.2 percent. Bank Indonesia has kept borrowing costs unchanged for 10 straight meetings as exports tumbled and the rupiah weakened. Price pressure in Southeast Asias largest economy may rise as a planned increase in electricity tariffs and minimum wages take effect, with a possible reduction in fuel subsides also weighing.

Singapore GDP Topped Survey Last Quarter, Avert Recession. Singapores economy expanded more than economists estimated last quarter, averting a recession even after the central bank refrained from monetary stimulus as it sought to contain elevated inflation. GDP rose an annualized 1.8 percent in the three months to Dec. 31 from the previous period, when it contracted a revised 6.3 percent, the Trade Ministry said in a statement today. The median of 11 estimates in a Bloomberg News survey was for a 1.6 percent expansion. The economy grew 1.2 percent last year, less than a quarter of 2011s pace.

IFIs NEWS (compiled from their websites)

ADB Press Release: Online Registration Opens for ADB's 46th Annual Meeting

The ADB has opened online media registration for the 46th Annual Meeting of ADBs Board of Governors, to be held at the India Expo Mart Limited in Greater Noida, about 50 km outside Delhi, India from 2-5 May 2013, which will remain open until 20 April 2013. http://www.adb.org/news/online-registration-opens-adbs-46th-annual-meeting

FOREIGN CURRENCY EXCHANGE RATES

2011 close Previous wk's

close 31-Dec 2-Jan % change 2013 YTD

(%chg) China 6.2980 6.2322 6.2306 6.2331 -0.04 Hong Kong 7.7698 7.7514 7.7503 7.7518 -0.02 Indonesia 9,126.0 9,679.0 9,793.0 9,653.0 1.45 Japan 76.8 85.96 86.75 87.14 -0.45 Korea 1,150.8 1,070.5 1,064.4 1,063.6 0.08 Malaysia 3.1507 3.0613 3.0580 3.0354 0.74 Philippines 43.765 41.005 41.005 40.852 0.37 Singapore 1.2906 1.2239 1.2218 1.2204 0.11 Thailand 31.5 30.6 30.6 30.3 0.82 Vietnam 21,031.0 20,840.0 20,840.0 20,840.0 0.00

Note: Negative values indicate depreciation and positive values indicate appreciation. STOCK MARKET INDEX


close 31-Dec 2-Jan % change 2013 YTD

(%chg) China 2,199.4 2,233.3 2,269.1 2,269.1 0.00 Hong Kong 18,877.4 22,666.6 22,656.9 23,312.0 2.89 Indonesia 3,857.9 4,316.7 4,316.7 4,346.5 0.69 Japan 8,455.4 10,395.2 10,395.2 10,395.2 0.00 Korea 1,875.4 1,997.1 1,997.1 2,031.1 1.71 Malaysia 1,514.6 1,681.3 1,689.0 1,676.2 -0.76 Philippines 4,422.2 5,812.7 5,812.7 5,861.0 0.83
http://www.adb.org/news/online-registration-opens-adbs-46th-annual-meeting

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Singapore 2,691.1 3,191.8 3,167.1 3,202.3 1.11 Thailand 1,025.3 1,391.9 1,391.9 1,409.2 1.24 Vietnam 350.0 413.7 413.7 418.4 1.12

OVERNIGHT LENDING RATE (%)

3-MONTH INTERBANK LENDING RATE (%) 31-Dec 2-Jan bps change 31-Dec 2-Jan bps change China 3.860 3.860 0.00 3.900 3.900 0.00 Hong Kong 0.096 0.096 0.00 0.398 0.398 -0.04 Indonesia 4.242 4.224 -1.80 5.021 4.992 -2.88 Japan 0.095 0.095 0.00 0.309 0.309 0.00 Korea 2.750 2.750 0.00 2.870 2.870 0.00 Malaysia 3.000 3.000 0.00 3.210 3.210 0.00 Philippines -69.010 -3.660 6535.00 0.042 -0.081 -12.30 Singapore 0.038 0.038 0.00 0.378 0.377 -0.08 Thailand 2.750 2.750 0.00 2.866 2.866 0.00 Vietnam 4.417 4.500 8.30 7.475 7.287 -18.80

CREDIT DEFAULT SWAP (IN BPS)

1-Jan 2-Jan bps change China 66.36 63.00 -3.36 Hong Kong 45.63 45.60 -0.03 Indonesia 135.98 131.02 -4.96 Japan 81.72 79.87 -1.85 Korea 68.01 63.27 -4.75 Malaysia 77.85 74.00 -3.85 Philippines 105.70 102.85 -2.85 Thailand 94.52 88.85 -5.67 Vietnam 211.31 207.94 -3.37

Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk. * CDS trades in New York, hence the one day lag in the latest closing price.

31-Dec 2-Jan % change Gold Spot (in US$ per ounce)

1,675.4 1,682.9 0.45

Source: Bloomberg CREDIT RATINGS

S&P Moody's Fitch China AA- Aa3 A+ Hong Kong AAA Aa1 AA+ Indonesia BB+ Baa3 BBB- Japan AA- -- AA Korea A Aa3 A+ Malaysia A- A3 A- Philippines BB+ Ba1 BB+ Singapore AAA -- AAA Thailand BBB+ Baa1 BBB Vietnam BB- B1 B+

INTERNATIONAL RESERVES (END-MONTH, IN US$ BILLION)

2012 30-Apr 31-May 30-Jun 31-Jul 31-Aug 30-Sep 31-Oct 30-Nov 31-Dec

China 3,298.9 3,206.1 3,240.0 3,240.0 3,272.9 3,285.1 n.a n.a n.a Hong Kong 295.6 291.9 295.0 296.3 298.2 301.2 301.7 305.2 n.a Indonesia 116.4 111.5 106.5 106.6 109.0 110.2 110.3 111.3 n.a Japan 1,289.5 1,277.7 1,270.5 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 n.a Korea 316.8 310.9 312.4 314.4 316.9 322.0 323.5 326.1 n.a Malaysia 135.9 136.0 134.2 134.5 134.9 137.5 138.3 139.1 139.2 Philippines 76.5 76.1 76.1 79.8 80.7 82.0 81.7 83.9 n.a Singapore 246.1 237.7 243.4 244.1 246.2 252.1 254.2 255.8 n.a Thailand 178.5 172.6 174.7 175.3 179.2 183.6 181.5 181.6 182.4 Vietnam 19.5 19.9 19.7 20.0 n.a n.a n.a n.a n.a

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EXTERNAL LIQUIDITY RATIOS

Reserves - latest 3 months imports of

goods & services Short-term external

debt Import cover

(Qtrs of imports Reserves over

(US$bn) (US$bn) (US$bn) covered by reserves) short-term debt China 3,285.1 504.3 588.2 6.5 5.6 Hong Kong 305.2 139.0 736.2 2.2 0.4 Indonesia 111.3 50.5 38.3 2.2 2.9 Japan 1,270.9 70.9 2,332.3 17.9 0.5 Korea 326.1 150.9 132.6 2.2 2.5 Malaysia 139.2 58.0 35.4 2.4 3.9 Philippines 83.9 19.7 7.0 4.3 11.9 Singapore 255.8 118.2 923.9 2.2 0.3 Thailand 182.4 67.1 58.9 2.7 3.1 Vietnam 20.0 29.9 6.9 - -

DATA RELEASES FOR THE DAY

Country Indicators Period Last Previous CHINA PMI Manufacturing Dec 50.6 50.6 SOUTH KOREA Ext Trade - Imports (YoY)% Dec -5.3 0.7 SOUTH KOREA Ext Trade - Export (YoY)% Dec -5.5 3.9 INDONESIA Core Inflation (YoY)% Dec 4.4 4.4 THAILAND Consumer Price Index (YoY)% Dec 3.63 2.74 THAILAND Core CPI (YoY)% Dec 1.78 1.85 SOUTH KOREA HSBC Manufacturing PMI Dec 50.1 48.2 INDONESIA Total Imports (YoY)% Nov 9.92 10.8 INDONESIA Exports (YoY)% Nov -4.6 -7.6 INDONESIA Inflation (YoY)% Dec 4.30 4.32 INDONESIA Inflation NSA (MoM)% Dec 0.54 0.07 INDONESIA Total Trade Balance (USD mn) Nov -478 -1547 SINGAPORE GDP (YoY)% 4Q A 1.1 0.3 SINGAPORE GDP (QoQ)% 4Q A 1.8 -5.9

SELECTED ECONOMIC RELEASES CALENDAR (31 December 2012 4 January 2013)

Expected Release Date

Country Indicators Period

12/31/2012 SOUTH KOREA Consumer Price Index (YoY)% Dec HONG KONG Govt Mthly Budget Surp/Def (HKD bn) Nov SOUTH KOREA Core Consumer Price Index(YoY)% Dec SOUTH KOREA Consumer Price Index (MoM)% Dec CHINA HSBC Manufacturing PMI Dec 1/1/2013 CHINA PMI Manufacturing Dec SOUTH KOREA Ext Trade - Imports (YoY)% Dec SOUTH KOREA Ext Trade - Export (YoY)% Dec 1/2/2013 INDONESIA Core Inflation (YoY)% Dec THAILAND Consumer Price Index (YoY)% Dec THAILAND Core CPI (YoY)% Dec SOUTH KOREA HSBC Manufacturing PMI Dec INDONESIA Total Imports (YoY)% Nov INDONESIA Exports (YoY)% Nov INDONESIA Inflation (YoY)% Dec INDONESIA Inflation NSA (MoM)% Dec INDONESIA Total Trade Balance (USD mn) Nov SINGAPORE GDP (YoY)% 4Q A SINGAPORE GDP (QoQ)% 4Q A

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1/3/2013 HONG KONG Retail Sales - Volume (YoY)% Nov HONG KONG Retail Sales - Value (YoY)% Nov INDONESIA Net Foreign Assets (IDR Tln) Dec INDONESIA Foreign Reserves (USD bn) Dec 1/4/2013 SOUTH KOREA Foreign Exchange Reserve (USD bn) Dec SOUTH KOREA South Korea FDI (YoY)% 4Q HONG KONG Purchasing Managers Index Dec CHINA China HSBC Services PMI Dec JAPAN Official Reserve Assets (USD bn) Dec

The ASEAN+3 Market Update is compiled based on the publicly available information only and is for internal use. The interpretation of this document or any information contained or referred to on the document and the consequences which might be caused by such interpretation will not be the responsibility of AMRO. The information in this document is provided for information purposes only.



MARKET DEVELOPMENTS

European Stocks Rise Amid Swiss Rally on U.S. Budget Deal. European (SXXP) stocks climbed, extending a 22-month high, as Swiss shares rallied following a U.S. budget deal that stopped automatic spending cuts and tax increases from coming into force. U.S. index futures fell, while Asian shares outside Japan advanced. The Stoxx Europe 600 Index gained 0.4 percent to 286.32 at 8:08 a.m. in London. The Swiss Market Index jumped 2.2 percent as the equity gauge opened for the first time since Dec. 28. Futures on the Standard & Poors 500 Index expiring in March fell 0.3 percent, while the MSCI Asia Pacific Excluding Japan Index climbed 0.4 percent.

Asian Stocks Rise on U.S. Manufacturing, China Services. Asian stocks rose, pushing a regional equities index to its highest level in 17 months, after an expansion of U.S. manufacturing and Chinas services industries fueled optimism in the global economic recovery. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) rose 0.4 percent to 478.15 as of 4:22 p.m. in Hong Kong, adding to yesterdays biggest gain in three months. More than two shares increased for each that fell. A close at this level would be the highest since August 2011. Markets in mainland China and Japan are closed today for holidays.

Oil Drops From Highest in Three Months on Signs Gains Excessive. Oil slid for the first time in three days in New York on speculation that its surge to the highest level in three months yesterday may have been excessive. Futures lost as much as 0.7 percent after rallying 2.6 percent in the past two days as U.S. lawmakers passed a bill to undo automatic tax increases and spending cuts that threatened growth in the worlds biggest oil-consuming country. Crude declined today as technical indicators showed futures may have risen too quickly for further gains to be sustainable, according to data compiled by Bloomberg.

Gold Trades Near Two-Week High as Stimulus Set to Be Sustained. Gold traded near a two-week high as expectations that policy makers around the world will continue to support their economies increased demand for a store of value. Spot gold was at $1,686.65 an ounce at 3:12 p.m. in Singapore after swinging between gains and losses. The metal reached $1,694.81 yesterday, the most expensive since Dec. 18, rallying with stocks, copper and oil after U.S. lawmakers passed a bill averting automatic spending cuts and tax rises, heading off the so-called fiscal cliff that had threatened the recovery.

BREAKING NEWS

GLOBAL

Budget Deal Lets More Savers Switch to Roth 401(k). U.S. workers willing to take tax pain today in exchange for tax-free gains on earnings in their 401(k) retirement accounts later have a new avenue to do so. The budget legislation passed by Congress Jan. 1 lets 401(k) participants convert any money in their tax-deferred accounts to a so-called Roth 401(k) account, if their employer offers one, which can be withdrawn tax-free in retirement. The change is projected to raise $12.2 billion in revenue over 10 years, according to the Joint Committee on Taxation, and help defray the cost of delaying spending cuts that had been set to take effect this month. The conversion opportunity can benefit people with significant balances, the up-front money to pay taxes now with

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funds outside their retirement account and years of tax-free earnings ahead of them or their heirs. Conversions to Roth 401(k)s had been limited to certain funds and to plans that allowed the switches. The law opens the opportunity to more workers who hold $5 trillion in employer-sponsored defined contribution plans including 401(k)s.

Basel Becomes Babel as Conflicting Rules Undermine Safety. The first Basel agreement on global banking regulation, adopted in 1988, was 30 pages long and relied on simple arithmetic. The latest update, known as Basel III, runs to 509 pages and includes 78 calculus equations. The complexity is emblematic of what happened over the past four years as governments that injected $600 billion to rescue failing banks during the worst financial crisis since the Great Depression devised ways to make the global banking system safer. Those efforts have been stymied by conflicting laws, divergent accounting standards and clashing rules adopted by nations to protect their interests, all of which have created new risks. While higher capital requirements, curbs on banks trading with their own money and other rules have reduced risk, they have magnified the complexity of supervision, according to two dozen regulators, bankers and analysts interviewed by Bloomberg News. Even if the new regulations can be enforced, they dont go far enough to ensure safety, said Robert Jenkins, a member of the Bank of Englands financial policy committee.

U.K. House Prices Fall 0.1% as Property Market Ends Fragile Year. U.K. house prices declined last month and may fall modestly over 2013 because of a weak economic recovery, Nationwide Building Society said. The average cost of a home slipped 0.1 percent to 162,262 pounds ($264,000) in December, the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were down 1 percent..

Aussie, N.Z. Dollars Weaken on U.S. Debt Ceiling Concern. The Australian dollar retreated from near a two-week high as concern U.S. lawmakers will struggle to agree on raising the nations debt ceiling overshadowed the bill they passed to avert the so-called fiscal cliff. The Aussie slid versus most of its 16 major counterparts as officials in the worlds biggest economy turned their attention to a debate over raising the $16.4 trillion debt limit. An increase will be needed as early as mid-February, according to the U.S. Congressional Budget Office. The New Zealand dollar, also known as the kiwi, reversed a gain from yesterday as U.S. stock futures fell.

REGIONAL

China Poised for 2013 Rebound as Debt Risks Rise for Xi. Incoming President Xi Jinping may find Chinas investment-driven economic recovery in the Year of the Snake jeopardized by mounting risks in the finance industry. Gross domestic product is poised to expand 8.1 percent this year, up from 7.7 percent in 2012, according to the median estimate of economists surveyed last month by Bloomberg News. At the same time, an increase in lending fueled by trust companies and underground banks enhances the risk of loan defaults that would be severely damaging to the economy, Standard Chartered Plc says. The danger is that an economic rebound lulls policy makers into complacency, delaying market-driven changes needed to reduce dependence on investment for growth. Xi needs to rev up consumption and services and ensure credit is diverted from inefficient state enterprises to growth-generating private companies, said David Loevinger, former senior coordinator for China affairs at the U.S. Treasury Department..

Japans Aso Targets Myanmar Markets Amid China Rivalry. Japans Finance Minister Taro Aso met with Myanmars president and senior officials today in a sign the nation plans to tap a market of 64 million people that has been dominated by China. The trip is

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Asos first foreign visit since Prime Minister Shinzo Abes cabinet took office last month. It coincides with the U.S. and the United Nations expressing concern over government strikes against ethnic rebels in Myanmars north. Japans push into the nation bordering India and China may produce trade opportunities for its stagnating economy while helping Myanmar President Thein Sein meet a pledge to attract labor-intensive industries to create jobs. Competing Chinese and Japanese efforts risk further straining relations between Asias two biggest economies, already at odds over islands in the East China Sea.

Korea Bonds Rise a Fourth Day on Rate-Cut Speculation; Won Gains. South Koreas three-year bonds rose for a fourth day on speculation the central bank will cut interest rates as early as next week to slow gains in the won, Asias best-performing currency last year. Policymakers at the Bank of Korea meet Jan. 11 to review borrowing costs. The central bank kept the benchmark seven-day repurchase rate at 2.75 percent last month after cuts of 25 basis points each in July and October. The government lowered its growth forecasts for 2012 and 2013 in December. The won touched a 16-month high today, after erasing an earlier loss.

Thai Billionaire Extends Deadline for F&N Offer. A group led by Overseas Union Enterprise Ltd. (OUE) extended a deadline for a S$13.1 billion ($10.7 billion) bid for Fraser & Neave Ltd., prolonging its battle with a Thai billionaire for control of the Singapore conglomerate. The OUE-led group pushed back the date on its S$9.08 per share bid to Jan. 14, according to a stock exchange statement today. Thai billionaire Charoen Sirivadhanabhakdi yesterday moved the closing date on his S$8.88 per share offer until Jan. 10.


IMF Press Release: Comments on U.S. Fiscal Cliff Measures

The IMF has issued the following statement: We welcome the action by the U.S. Congress to avoid sudden tax increases and spending cuts, including through an extension of unemployment benefits during 2013. In the absence of Congressional action the economic recovery would have been derailed. However, more remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery. Specifically, a comprehensive plan that ensures both higher revenues and containment of entitlement spending over the medium term should be approved as soon as possible. In addition, it is crucial to raise the debt ceiling expeditiously and remove remaining uncertainties about the spending sequester and expiring appropriation bills. http://www.imf.org/external/np/sec/pr/2013/pr1301.htm

IMF Publication: Managing Director's Interview with Maeil Business: S. Korea needs to pursue different kind of growth to promote fairness, efficiency

The IMF has publicised the transcript of an interview by Koreas Maeil Business to MD Christine Lagarde. http://www.imf.org/external/np/vc/2013/010213.htm



close 2-Jan 3-Jan % change 2013 YTD

(%chg) China 6.2306 6.2322 6.2331 6.2325 0.01 0.0 Hong Kong 7.7503 7.7514 7.7507 7.7513 -0.01 0.0
http://www.imf.org/external/np/sec/pr/2013/pr1301.htmhttp://www.imf.org/external/np/vc/2013/010213.htm

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Indonesia 9,793.0 9,679.0 9,653.0 9,653.0 0.00 0.0 Japan 86.75 85.96 87.34 87.13 0.24 0.2 Korea 1,064.4 1,070.5 1,063.6 1,061.7 0.18 0.2 Malaysia 3.058 3.0613 3.0354 3.0308 0.15 0.2 Philippines 41.005 41.005 40.852 40.735 0.29 0.3 Singapore 1.2218 1.2239 1.2205 1.2218 -0.11 -0.1 Thailand 30.6 30.6 30.3 30.4 -0.07 -0.1 Vietnam 20,840.0 20,840.0 20,840.0 20,843.0 -0.01 0.0




(%chg) China 2,269.1 2,233.3 2,269.1 2,269.1 0.00 0.0 Hong Kong 22,656.9 22,666.6 23,312.0 23,398.6 0.37 0.4 Indonesia 4,316.7 4,316.7 4,346.5 4,399.3 1.21 1.2 Japan 10,395.2 10,395.2 10,395.2 10,395.2 0.00 0.0 Korea 1,997.1 1,997.1 2,031.1 2,019.4 -0.58 -0.6 Malaysia 1,689.0 1,681.3 1,674.7 1,692.7 1.07 1.1 Philippines 5,812.7 5,812.7 5,861.0 5,934.1 1.25 1.2 Singapore 3,167.1 3,191.8 3,201.7 3,224.8 0.72 0.7 Thailand 1,391.9 1,391.9 1,407.5 1,411.4 0.28 0.3 Vietnam 413.7 413.7 418.4 419.3 0.22 0.2


3-MONTH INTERBANK LENDING RATE (%) 2-Jan 3-Jan bps change 2-Jan 3-Jan bps change China 3.860 3.860 0.00 3.900 3.900 0.00 Hong Kong 0.096 0.096 0.00 0.398 0.398 0.00 Indonesia 4.224 4.212 -1.16 4.992 4.994 0.12 Japan 0.095 0.095 0.00 0.309 0.309 0.00 Korea 2.750 2.750 0.00 2.870 2.870 0.00 Malaysia 3.000 3.000 0.00 3.210 3.210 0.00 Philippines -3.660 0.499 415.90 -0.081 0.032 11.30 Singapore 0.019 0.019 0.00 0.377 0.377 0.00 Thailand 2.750 2.750 0.00 2.866 2.867 0.08 Vietnam 4.500 4.357 -14.30 7.287 7.610 32.30


2-Jan 3-Jan bps change China 60.21 58.59 -1.62 Hong Kong 50.50 43.50 -7.00 Indonesia 129.80 126.65 -3.14 Japan 76.66 76.45 -0.21 Korea 61.00 59.65 -1.35 Malaysia 71.93 70.50 -1.43 Philippines 101.00 97.67 -3.33 Thailand 89.96 85.84 -4.11 Vietnam 203.27 203.00 -0.27


2-Jan 3-Jan % change Gold Spot (in US$ per ounce)

1,686.9 1,685.9 -0.06


S&P Moody's Fitch China AA- Aa3 A+ Hong Kong AAA Aa1 AA+ Indonesia BB+ Baa3 BBB- Japan AA- -- AA

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Korea A Aa3 A+ Malaysia A- A3 A- Philippines BB+ Ba1 BB+ Singapore AAA -- AAA Thailand BBB+ Baa1 BBB Vietnam BB- B1 B+



China 3,298.9 3,206.1 3,240.0 3,240.0 3,272.9 3,285.1 n.a n.a n.a Hong Kong 295.6 291.9 295.0 296.3 298.2 301.2 301.7 305.2 n.a Indonesia 116.4 111.5 106.5 106.6 109.0 110.2 110.3 111.3 n.a Japan 1,289.5 1,277.7 1,270.5 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 n.a Korea 316.8 310.9 312.4 314.4 316.9 322.0 323.5 326.1 n.a Malaysia 135.9 136.0 134.2 134.5 134.9 137.5 138.3 139.1 139.2 Philippines 76.5 76.1 76.1 79.8 80.7 82.0 81.7 83.9 n.a Singapore 246.1 237.7 243.4 244.1 246.2 252.1 254.2 255.8 n.a Thailand 178.5 172.6 174.7 175.3 179.2 183.6 181.5 181.6 182.4 Vietnam 19.5 19.9 19.7 20.0 n.a n.a n.a n.a n.a EXTERNAL LIQUIDITY RATIOS

Reserves - latest 3 months imports of


debt Import cover

(Qtrs of imports Reserves over

(US$bn) (US$bn) (US$bn) covered by reserves) short-term debt China 3,285.1 504.3 588.2 6.5 5.6 Hong Kong 305.2 139.0 736.2 2.2 0.4 Indonesia 111.3 50.5 38.3 2.2 2.9 Japan 1,270.9 70.9 2,332.3 17.9 0.5 Korea 326.1 150.9 132.6 2.2 2.5 Malaysia 139.2 58.0 35.4 2.4 3.9 Philippines 83.9 19.7 7.0 4.3 11.9 Singapore 255.8 118.2 923.9 2.2 0.3 Thailand 182.4 67.1 58.9 2.7 3.1 Vietnam 20.0 29.9 6.9 - -


Country Indicators Period Last Previous HONG KONG Retail Sales - Volume (YoY)% Nov 8.1 3.6 HONG KONG Retail Sales - Value (YoY)% Nov 9.5 4.0 INDONESIA Net Foreign Assets (IDR Tln) Dec 1034.39 INDONESIA Foreign Reserves (USD bn) Dec 111.29




12/31/2012 SOUTH KOREA Consumer Price Index (YoY)% Dec HONG KONG Govt Mthly Budget Surp/Def (HKD bn) Nov SOUTH KOREA Core Consumer Price Index(YoY)% Dec SOUTH KOREA Consumer Price Index (MoM)% Dec CHINA HSBC Manufacturing PMI Dec 1/1/2013 CHINA PMI Manufacturing Dec SOUTH KOREA Ext Trade - Imports (YoY)% Dec SOUTH KOREA Ext Trade - Export (YoY)% Dec 1/2/2013 INDONESIA Core Inflation (YoY)% Dec THAILAND Consumer Price Index (YoY)% Dec THAILAND Core CPI (YoY)% Dec SOUTH KOREA HSBC Manufacturing PMI Dec

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INDONESIA Total Imports (YoY)% Nov INDONESIA Exports (YoY)% Nov INDONESIA Inflation (YoY)% Dec INDONESIA Inflation NSA (MoM)% Dec INDONESIA Total Trade Balance (USD mn) Nov SINGAPORE GDP (YoY)% 4Q A SINGAPORE GDP (QoQ)% 4Q A 1/3/2013 HONG KONG Retail Sales - Volume (YoY)% Nov HONG KONG Retail Sales - Value (YoY)% Nov INDONESIA Net Foreign Assets (IDR Tln) Dec INDONESIA Foreign Reserves (USD bn) Dec 1/4/2013 SOUTH KOREA Foreign Exchange Reserve (USD bn) Dec SOUTH KOREA South Korea FDI (YoY)% 4Q HONG KONG Purchasing Managers Index Dec CHINA China HSBC Services PMI Dec JAPAN Official Reserve Assets (USD bn) Dec




MARKET DEVELOPMENTS

European Stocks Fall as Fed Sees End to Bond Purchases. European (SXXP) stocks fell before U.S. jobs data and as Federal Reserve minutes showed some policy makers said it may be appropriate to end the $85 billion monthly bond- purchase program in 2013. U.S. index futures were little changed, while Asian shares outside Japan dropped. The Stoxx Europe 600 Index lost 0.2 percent to 286.36 at 8:05 a.m. in London. Futures on the Standard & Poors 500 Index expiring in March were little changed, while the MSCI Asia Pacific Excluding Japan Index retreated 0.5 percent.

Treasuries Fall a Fourth Day as Economists See Job Gains. Treasuries dropped for a fourth day, making them the worlds worst-performing bonds, as economists said a report will show the U.S. unemployment rate held at the lowest level since 2008. Government securities maturing in 10 years and longer handed investors a 4.72 percent loss in the past month, the biggest decline of 144 debt indexes tracked by Bloomberg and the European Federation of Financial Analysts Societies. Treasuries headed for their steepest weekly drop since March as lawmakers passed a budget to avert taxes and spending cuts that threatened to throw the economy into recession, while the Federal Reserve said it will probably end monthly debt purchases this year.

Asian Stocks Outside Japan Decline on Fed; Nikkei Jumps. Asian stocks outside Japan fell, paring the biggest weekly advance in more than a month, after Federal Reserve policy makers said they will probably end their $85 billion monthly bond-purchase program sometime this year. Japanese equities jumped as markets reopened from holidays. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) declined 0.7 percent to 475.18 as of 4:41 p.m. in Tokyo, trimming the weeks advance to 1.91 percent. The measure advanced 1.94 percent in the period ending Nov. 30. Japans Nikkei 225 Stock Average (NKY) gained 2.8 percent on its first trading day of 2013 after U.S. lawmakers passed a bill averting spending cuts and tax increases scheduled to come into effect this year.

Oil Slips a Second Day in New York on U.S. Jobless Claims. Oil trimmed its fourth weekly gain after U.S. Federal Reserve policy makers signaled they may end a stimulus program this year, raising concern the economic recovery may falter in the worlds biggest crude user. Prices dropped as much as 0.9 percent, trimming crudes weekly increase to 1.4 percent. Members of the Federal Open Market Committee said they will probably end their $85 billion monthly bond purchases sometime in 2013, according to minutes of its latest meeting released yesterday. The U.S. unemployment rate may have held at 7.7 percent, the lowest since December 2008, according to the median forecast of economists surveyed by Bloomberg ahead of a Labor Department report today.

Gold Seen Rallying From Worst Streak in Eight Years. Gold traders expect prices to rebound from the longest weekly losing streak in eight years as mounting concern that U.S. lawmakers are doing too little to control the budget deficit spurs demand for a protection of wealth. Twenty analysts surveyed by Bloomberg expect prices to rise next week, five were bearish and a further two were neutral. While hedge funds cut bullish bets to a four-month low last week as prices slid for a fifth week, investors are holding a near- record amount in gold-backed exchange-traded products that are now valued at $138.9 billion, data compiled by Bloomberg show.

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BREAKING NEWS

GLOBAL

Fed Debated QE End in 2013 Amid Concern Over Total Assets. Federal Reserve officials, expressing concern over their swelling balance sheet, began debating an end to their unprecedented bond-buying as early as this year even while preparing to boost stimulus to a new record. Several members of the Federal Open Market Committee said it would probably be appropriate to slow or stop purchases well before the end of 2013, according to minutes of their Dec. 11-12 meeting released yesterday. A few others were willing to let the program run to the end of the year while a few others didnt give a time frame. Chairman Ben S. Bernanke is exploring the timing for concluding his four-year campaign to cut borrowing costs and combat unemployment through unorthodox monetary easing. The FOMC minutes reveal concern over the challenge of shrinking a balance sheet that may grow to more than $4 trillion while potentially distorting financial markets and providing less kick to growth.

German Retail Sales Rise as Jobless Rate Near Record Low. German retail sales rose in November as unemployment close to a two-decade low encouraged spending. Sales, adjusted for inflation and seasonal swings, increased 1.2 percent from October, when they dropped 1.3 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 0.8 percent gain, according to the median of 16 estimates in a Bloomberg News survey. Sales fell 0.9 percent from a year earlier. The statistics office said overall in 2012 sales fell between 0.1 percent and 0.3 percent against the previous year, after inflation was taken into account. German unemployment increased less than economists predicted in December and the jobless rate held at 6.9 percent even as Europes debt crisis curbed investment and spending. Business confidence improved for a second month in December after factory orders and exports rose, signaling the country is unlikely to slide into recession.

U.K.s Labour to Strip Benefits From Unemployed If Job Refused. The U.K.s opposition Labour Party called for a compulsory jobs guarantee for the long-term unemployed, making state welfare payments dependent on paid employment. The partys treasury spokesman, Ed Balls, said the guarantee would initially be for adults who are out of work for 24 months or more, though Labour would seek to reduce this to 18 or 12 months over time. The party said there are currently 129,400 adults over the age of 25 who have been out of work for 24 months or more, a rise of 88 percent in a year. To pay for the jobs guarantee, which Balls estimates would cost 1 billion pounds ($1.6 billion), he would reverse Prime Minister David Camerons decision not to limit tax relief to 20 percent on pension contributions for people earning over 150,000 pounds a year..

Aussie Dollar Falls as China, Australia Indexes Decline. Australias dollar fell against its U.S. counterpart, trimming a weekly gain, after service-industry indexes in the South Pacific nation and China declined. Australian bonds dropped, pushing benchmark 10-year yields to the highest in more than four months after gains in Asian stocks curbed demand for haven assets. The so-called Aussie and New Zealands dollar were supported against the yen amid speculation the Japans central bank will boost stimulus to weaken its currency..

REGIONAL

China Services Growth Slows Even as New Business Picks Up. Chinas services industries growth slowed in December, a private survey showed, even as a pickup in new business added to the likelihood that the economy accelerated for the first time in

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eight quarters. The services Purchasing Managers Index released by HSBC Holdings Plc and Markit Economics today was at 51.7 after 52.1 in November. Companies added workers at the fastest pace in more than two years and were optimistic business would improve, HSBC said in a statement.

Japan Stocks Jump as Market Reopens, Yen Lifts Exporters. Japanese stocks advanced, with the Nikkei 225 Stock Average closing at its highest since March 2011, as shares chased gains among Asian markets following a four-day holiday and a weaker yen boosted the earnings outlook for exporters including Toyota Motor Corp. Toyota jumped 6.4 percent as Japans currency fell to its lowest since July 2010 against the dollar. Fanuc Corp. (6954), which supplies robots used in Chinese factories, climbed 3.9 percent after a manufacturing report earlier this week added to signs the worlds second-largest economy is recovering. Japan Exchange Group Inc., created by the merger of the countrys two biggest bourses, plunged 9.7 percent in its Tokyo trading debut. The Nikkei 225 climbed 2.8 percent to close at 10,688.11 in Tokyo, gaining the most on an opening day since 2002. The broader Topix Index climbed 3.3 percent to 888.51. Japanese shares caught up with a rally in Asian markets this week that came after the U.S. Congress passed legislation to avert more than $600 billion in automatic tax increases and spending cuts that might have pushed the economy into a recession..

Won, Ringgit Lead Weekly Advance in Asia on U.S. Budget Deal. South Koreans won and Malaysias ringgit led gains in Asian currencies this week after the U.S. averted $600 billion of tax increases and spending cuts, easing the risk of a slowdown in the worlds largest economy. The Bloomberg-JPMorgan Asia Dollar Index touched a 16-month high yesterday and regional stocks rallied 1.8 percent in the last four days after Congress passed a bill on Jan. 1 that makes the George W. Bush-era income-tax cuts permanent for most workers, while letting them expire for top earners. Regional currencies fell today after minutes of a Federal Reserve meeting released yesterday in Washington indicated a probable end to the monetary authoritys bond-buying program this year.

South Korea Cites Bias in Move to Ban Japanese Ship Lines. South Koreas government is moving to bar foreign shipping lines from contracts in the state-run energy sector as it supports domestic companies struggling to recover from the global downturn. State-controlled Korea Electric Power Corp. (KEP) on Dec. 21 held an auction for its five units that effectively restricted participants to domestic shipping lines for the first time. The contracts, worth about $2 billion, require bidders to partner with another South Korean company and build nine ships in local shipyards that will carry coal from such countries as Australia. South Koreas biggest shipping lines may be set to benefit from the restrictions after Hanjin Shipping Co. (117930), Hyundai Merchant Marine Co. (011200) and STX Pan Ocean Co. (028670) posted losses in the first nine months of 2012. The move also threatens to further heighten economic tensions with Japan, whose carriers hauled about 25 percent of South Koreas coal shipments in 2011.


IMF Publication: Anti-Money Laundering and Combating the Financing of Terrorism - Inclusion in Surveillance and Financial Stability Assessments - Guidance Note

The IMF has publicised the captioned policy paper. This note provides guidance on the inclusion of AML/CFT issues in surveillance and financial stability assessments (FSAs). Specifically, it provides a framework for the treatment of cases where money laundering or terrorist financing (ML/TF) and related underlying crimes (i.e., predicate crimes or predicate offenses) are so serious as to threaten domestic stability,

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balance of payments stability, the effective operation of the International Monetary SystemIMS (in the case of Article IV surveillance), or the stability of the domestic financial system (in the case of FSAs). http://www.imf.org/external/np/pp/eng/2012/121412a.pdf

IMF Working Paper: Growth Forecast Errors and Fiscal Multipliers

The IMF has publicised the captioned working paper. This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis. http://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf




(%chg) China 6.2306 6.2322 6.2325 6.2306 0.03 0.0 Hong Kong 7.7503 7.7514 7.7507 7.7515 -0.01 0.0 Indonesia 9,793.0 9,679.0 9,653.0 9,788.0 -1.38 -1.4 Japan 86.75 85.96 87.24 88.22 -1.11 -1.0 Korea 1,064.4 1,070.5 1,061.7 1,063.7 -0.19 0.0 Malaysia 3.058 3.0613 3.0308 3.0468 -0.53 -0.4 Philippines 41.005 41.005 40.735 40.925 -0.46 -0.2 Singapore 1.2218 1.2239 1.226 1.2291 -0.25 -0.7 Thailand 30.6 30.6 30.4 30.5 -0.36 -0.6 Vietnam 20,840.0 20,840.0 20,840.0 20,843.0 -0.01 0.0




(%chg) China 2,269.1 2,233.3 2,269.1 2,277.0 0.35 0.3 Hong Kong 22,656.9 22,666.6 23,398.6 23,331.1 -0.29 0.1 Indonesia 4,316.7 4,316.7 4,399.3 4,410.0 0.24 1.5 Japan 10,395.2 10,395.2 10,395.2 10,688.1 2.82 2.8 Korea 1,997.1 1,997.1 2,019.4 2,011.9 -0.37 -0.9 Malaysia 1,689.0 1,681.3 1,692.7 1,692.6 0.00 1.1 Philippines 5,812.7 5,812.7 5,934.1 5,971.5 0.63 1.9 Singapore 3,167.1 3,191.8 3,224.8 3,223.8 -0.03 0.7 Thailand 1,391.9 1,391.9 1,408.4 1,414.4 0.43 0.5 Vietnam 413.7 413.7 419.3 426.1 1.62 1.8


3-MONTH INTERBANK LENDING RATE (%) 3-Jan 4-Jan bps change 3-Jan 4-Jan bps change China 3.860 2.440 -142.00 3.900 3.900 0.04 Hong Kong 0.096 0.096 0.00 0.398 0.398 0.00 Indonesia 4.212 4.208 -0.44 4.994 4.979 -1.44 Japan 0.095 0.095 0.00 0.309 0.309 0.00 Korea 2.750 2.750 0.00 2.870 2.870 0.00 Malaysia 3.000 3.000 0.00 3.210 3.210 0.00 Philippines 0.499 1.187 68.80 0.032 0.172 14.00 Singapore 0.019 0.019 0.00 0.377 0.377 0.00 Thailand 2.750 2.750 0.00 2.867 2.868 0.08 Vietnam 4.357 4.125 -23.20 7.610 6.750 -86.00
http://www.imf.org/external/np/pp/eng/2012/121412a.pdfhttp://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf

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3-Jan 4-Jan bps change China 58.90 56.50 -2.40 Hong Kong 43.50 43.42 -0.09 Indonesia 125.45 125.82 0.37 Japan 75.50 75.74 0.24 Korea 59.64 58.34 -1.30 Malaysia 69.55 69.50 -0.05 Philippines 97.58 97.34 -0.25 Thailand 86.15 86.01 -0.14 Vietnam 200.81 204.02 3.22



1,664.0 1,640.0 -1.44





China 3,298.9 3,206.1 3,240.0 3,240.0 3,272.9 3,285.1 n.a n.a n.a Hong Kong 295.6 291.9 295.0 296.3 298.2 301.2 301.7 305.2 n.a Indonesia 116.4 111.5 106.5 106.6 109.0 110.2 110.3 111.3 n.a Japan 1,289.5 1,277.7 1,270.5 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 n.a Korea 316.8 310.9 312.4 314.4 316.9 322.0 323.5 326.1 327.0 Malaysia 135.9 136.0 134.2 134.5 134.9 137.5 138.3 139.1 139.2 Philippines 76.5 76.1 76.1 79.8 80.7 82.0 81.7 83.9 n.a Singapore 246.1 237.7 243.4 244.1 246.2 252.1 254.2 255.8 n.a Thailand 178.5 172.6 174.7 175.3 179.2 183.6 181.5 181.6 181.6 Vietnam 19.5 19.9 19.7 20.0 n.a n.a n.a n.a n.a EXTERNAL LIQUIDITY RATIOS

Reserves -

latest 3 months imports of


debt Import cover (Qtrs

of imports Reserves over

(US$bn) (US$bn) (US$bn) covered by

reserves) short-term debt

China 3,285.1 504.3 572.8 6.5 5.7 Hong Kong 305.2 139.0 711.2 2.2 0.4 Indonesia 111.3 50.5 38.3 2.2 2.9 Japan 1,270.9 70.9 2,255.1 17.9 0.6 Korea 327.0 150.9 132.6 2.2 2.5 Malaysia 139.2 58.0 32.4 2.4 4.3 Philippines 83.9 19.7 8.0 4.3 10.5 Singapore 255.8 118.2 924.3 2.2 0.3 Thailand 181.6 67.1 57.2 2.7 3.2 Vietnam 20.0 29.9 6.9 - -

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Country Indicators Period Last Previous SOUTH KOREA Foreign Exchange Reserve (USD bn) Dec 326.97 326.09 THAILAND Foreign Reserves (USD bn) Dec 28 181.6 182.4 HONG KONG Purchasing Managers Index Dec 51.7 52.2 CHINA China HSBC Services PMI Dec 51.7 52.1 PHILIPPINES Consumer Price Index (YoY)% Dec 2.9 2.8




12/31/2012 SOUTH KOREA Consumer Price Index (YoY)% Dec HONG KONG Govt Mthly Budget Surp/Def (HKD bn) Nov SOUTH KOREA Core Consumer Price Index(YoY)% Dec SOUTH KOREA Consumer Price Index (MoM)% Dec CHINA HSBC Manufacturing PMI Dec 1/1/2013 CHINA PMI Manufacturing Dec SOUTH KOREA Ext Trade - Imports (YoY)% Dec SOUTH KOREA Ext Trade - Export (YoY)% Dec 1/2/2013 INDONESIA Core Inflation (YoY)% Dec THAILAND Consumer Price Index (YoY)% Dec THAILAND Core CPI (YoY)% Dec SOUTH KOREA HSBC Manufacturing PMI Dec INDONESIA Total Imports (YoY)% Nov INDONESIA Exports (YoY)% Nov INDONESIA Inflation (YoY)% Dec INDONESIA Inflation NSA (MoM)% Dec INDONESIA Total Trade Balance (USD mn) Nov SINGAPORE GDP (YoY)% 4Q A SINGAPORE GDP (QoQ)% 4Q A 1/3/2013 HONG KONG Retail Sales - Volume (YoY)% Nov HONG KONG Retail Sales - Value (YoY)% Nov INDONESIA Net Foreign Assets (IDR Tln) Dec INDONESIA Foreign Reserves (USD bn) Dec 1/4/2013 SOUTH KOREA Foreign Exchange Reserve (USD bn) Dec THAILAND Foreign Reserves (USD bn) Dec 28 HONG KONG Purchasing Managers Index Dec CHINA China HSBC Services PMI Dec PHILIPPINES Consumer Price Index (YoY)% Dec




MARKET DEVELOPMENTS

Asian Stocks Drop After Seven-Week Rally. Asian stocks fell, with the regional benchmark retreating after posting its longest streak of weekly gains since March last year. The MSCI Asia Pacific Index fell 0.3 percent to 131.56 as of 4:25 p.m. Tokyo time, erasing gains of as much as 0.3 percent earlier and heading for its first decline in five days. The gauge posted its seventh weekly advance last week, the longest winning streak since March last year, after U.S. Congress approved a budget deal and manufacturing reports from China and the U.S. added to signs of a global recovery. Japans Nikkei 225 Stock Average slipped 0.8 percent, after gaining 2.8 percent on Jan. 4, the best opening day for the gauge since 2002. Australias S&P/ASX 200 Index (AS51) lost 0.1 percent, while South Koreas Kospi Index was little changed. Hong Kongs Hang Seng Index swung between gains and losses. Chinas Shanghai Composite Index added 0.4 percent. The Philippine Stock Exchange Index climbed 1.2 percent to a record close.

Oil Falls in New York After Biggest Weekly Gain in Four Months. Oil fell in New York on speculation the biggest weekly advance in almost four months was excessive even amid signs of economic growth in the U.S., the worlds biggest crude consumer. Crude for February delivery declined as much as 53 cents to $92.56 a barrel and was at $92.62 in electronic trading on the New York Mercantile Exchange at 4:06 p.m. Singapore time. The contract rose 17 cents to $93.09 on Jan. 4, the highest settlement since Jan. 2. Prices slid 7.1 percent last year.

BREAKING NEWS

GLOBAL

Banks Win Watered Down Liquidity Rule to Prevent Lending Squeeze. Global central bank chiefs agreed to water down and delay a planned bank liquidity rule to counter warnings that the proposal would strangle lending and stifle the economic recovery. Lenders will be allowed to use an expanded range of assets including some equities and securitized mortgage debt to meet the so-called liquidity coverage ratio (or LCR), following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. Banks will also have an extra four years to fully comply with the measure. The LCR would force banks to hold enough easy-to-sell assets to survive a 30-day credit squeeze. Its a key component of a package of capital and liquidity measures, known as Basel III, drawn up to avoid a repeat of the 2008 financial crisis. Under yesterdays deal, banks would only have to meet 60 percent of the LCR obligations by 2015, and the full rule would be phased in annually through 2019, according to an e-mailed statement from the Group of Governors and Heads of Supervision.

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U.K. Companies More Optimistic on Economy in 2013, Surveys Show. U.K. businesses are more optimistic on the economic outlook this year as tensions related to the euro-region debt crisis ease, according to separate surveys of finance directors and manufacturing executives published today. Chief financial officers at some of Britains biggest companies see a 40 percent chance of the economy falling back into recession, down from about 43 percent in the third quarter, according to a survey by Deloitte LLP published in London today. Britains economy is likely to return to growth this year, according to a Bloomberg News survey of economists last month. Still, services unexpectedly shrank for the first time in two years in December and a construction index fell to a six-month low, clouding the economic outlook. Manufacturers expect the improvement this year will be driven by exports, with half of companies predicting growth in overseas sales.

REGIONAL

Abe Seen Spending 12 Trillion Yen to Boost Japans Economy. The Japanese government will announce around 12 trillion yen ($136 billion) in fiscal stimulus measures to boost the nations shrinking economy, Japanese media reported today. The extra budget for this fiscal year through March will include 5-6 trillion yen for public works spending, the Yomiuri newspaper reported. Prime Minister Shinzo Abe told business leaders today that he hopes to compile the stimulus measures this week. The spending may help to accelerate a recovery from recession as Abe pledges to boost growth and end deflation in the worlds third-largest economy. While Japans public debt is more than twice gross domestic product, Finance Minister Taro Aso said last week that the government doesnt need to adhere to a 44 trillion-yen cap on new bond issuance in this fiscal year.

Korea Seen Resisting Rate Cut as Won Threatens Exports. The Bank of Korea may

refrain from cutting rates at its first meeting since President Park Geun Hyes election even as Asias best-performing currency of the past year threatens exports and a weakening yen aids Japan. All 10 economists surveyed by Bloomberg News forecast borrowing costs will remain at 2.75 percent on Jan. 11. At the same time, seven of 16 economists in a separate survey see a 25 basis-point reduction by March. The government led by incoming President Park already plans a fiscal boost in the first half of the year by allocating 72 percent of budget spending for 2013, or $200 billion. South Koreas currency is up 9.3 percent against the dollar. The economy is on a recovery path but the tepid momentum is making policy makers pretty nervous, as their latest decision on fiscal front-loading suggests, said Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul. We may see a rate cut in March or April if there is no clear sign of faster and sustained economic recovery.

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Rupiah Drops Most in Seven Months on Concern Inflows Will Slow. Indonesias rupiah dropped the most in seven months on concern capital inflows will slow after the Federal Reserve said it may halt its stimulus program, and as the current-account gap worsens amid falling exports. Indonesias exports contracted for an eighth month in November. Its current account shortfall was likely 2.5 percent of gross domestic product last year, more than the central bank forecast of 2.4 percent, Barclays Plc economist said last week. The rupiah is still on a depreciating trend, said Raditya Ariwibowo, a Jakarta-based treasury analyst at PT Bank Negara Indonesia. Inflows will slow after the Fed halts its stimulus, while exports continue falling as long as the global economy remains soft. The rupiah fell 1.4 percent to 9,793 per dollar as of 9:11 a.m. in Jakarta, the biggest decline since June 7, prices from local banks compiled by Bloomberg show. The currency touched 9,800, the lowest level since Sept. 15, 2009.

Japan's Government Pushes New Business Role in Myanmar. Taro Aso, a week after becoming Japan's new finance minister, put aside pressing domestic issues for a trip to Myanmar to cement Tokyo's role in the largely untapped market. During his three-day stay, the 72-year-old Mr. Aso held talks with decision makers including President Thein Sein. Mr. Aso confirmed to Mr. Thein Sein that Japan would waive much of its 500 billion ($6 billion) in debt claims and would offer 50 billion in fresh loans, building on a commitment from the previous Japanese government, despite concerns from some Western countries that it is acting too hastily to build ties with Myanmar's military-dominated government. Japan is using its official yen loan programs to help Japanese businesses crack open the market. Last month, Japan won a contract to develop Thilawa, one of the three pioneer special economic zones in Myanmar.


Basel Committee Press Release: Basel Committee on Banking Supervision (BCBS) Charter

The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, have endorsed a new Charter for the Committee

http://www.bis.org/bcbs/charter.htm

Basel Committee Press Release: Group of Governors and Heads of Supervision endorses revised liquidity standard for banks

The Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, have met to consider the Basel Committee's amendments to the Liquidity Coverage Ratio (LCR) as a minimum standard. It unanimously endorsed them. This agreement is a clear commitment to ensure that banks hold sufficient liquid assets to prevent central banks becoming the "lender of first resort".

http://www.bis.org/press/p130106.htm
http://www.bis.org/bcbs/charter.htmhttp://www.bis.org/press/p130106.htm

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Basel Committee Speech: Speaking note from a press conference following a meeting of the GHOS

The Basel Committee on Banking Supervision has publicised the script of the remarks by Mervyn King, Chairman of the Governors and Heads of Supervision (GHOS) and Governor of the Bank of England, at a press conference, Bank for International Settlements, Basel, 6 January 2013.

http://www.bis.org/speeches/sp130106.htm

BIS Statistics: Statistics on payment, clearing and settlement systems in the CPSS countries - Figures for 2011

The BIS has issued an annual publication that provides data on payments and payment, clearing and settlement systems in the CPSS countries. This version of the statistical update contains data for 2011 and earlier years. There are detailed tables for each individual country as well as a number of comparative tables.

http://www.bis.org/publ/cpss107.htm





(%chg) China 6.2306 6.2306 6.2306 6.2298 0.01 0.1 Hong Kong 7.7503 7.7513 7.7513 7.7508 0.01 0.0 Indonesia 9,793.0 9,788.0 9,788.0 9,670.0 1.22 -0.2 Japan 86.75 88.15 88.15 87.71 0.50 -0.4 Korea 1,064.4 1,063.7 1,063.7 1,063.8 -0.01 0.0 Malaysia 3.058 3.0468 3.0468 3.0427 0.13 -0.2 Philippines 41.005 40.925 40.925 40.913 0.03 -0.1 Singapore 1.2218 1.2272 1.2272 1.2323 -0.41 -1.0 Thailand 30.6 30.5 30.5 30.5 -0.03 -0.5 Vietnam 20,840.0 20,843.0 20,843.0 20,840.0 0.01 0.0




(%chg) China 2,269.1 2,233.3 2,277.0 2,285.4 0.37 0.7 Hong Kong 22,656.9 22,666.6 23,331.1 23,329.8 -0.01 0.1 Indonesia 4,316.7 4,316.7 4,410.0 4,392.4 -0.40 1.1 Japan 10,395.2 10,395.2 10,688.1 10,599.0 -0.83 2.0 Korea 1,997.1 1,997.1 2,011.9 2,011.3 -0.03 -1.0 Malaysia 1,689.0 1,681.3 1,692.6 1,694.2 0.09 1.2 Philippines 5,812.7 5,812.7 5,971.5 6,044.9 1.23 3.1 Singapore 3,167.1 3,191.8 3,225.2 3,223.1 -0.07 0.7 Thailand 1,391.9 1,391.9 1,416.7 1,420.1 0.24 0.9 Vietnam 413.7 413.7 426.1 434.2 1.91 3.8


3-MONTH INTERBANK LENDING RATE (%) 4-Jan 7-Jan bps change 4-Jan 7-Jan bps change China 2.440 2.120 -32.00 3.900 3.903 0.28 Hong Kong 0.096 0.097 0.07 0.398 0.398 0.00 Indonesia 4.208 4.197 -1.04 4.979 4.958 -2.08 Japan 0.095 0.098 0.25 0.309 0.309 0.00 Korea 2.750 2.750 0.00 2.860 2.860 0.00 Malaysia 3.000 3.000 0.00 3.210 3.210 0.00
http://www.bis.org/speeches/sp130106.htmhttp://www.bis.org/publ/cpss107.htm

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Philippines 1.187 -1.089 -227.60 0.172 0.016 -15.60 Singapore 0.023 0.023 0.00 0.377 0.377 0.00 Thailand 2.750 2.750 0.00 2.868 2.868 0.00 Vietnam 4.125 3.583 -54.20 6.750 7.000 25.00


4-Jan 7-Jan bps change China 58.80 58.50 -0.30 Hong Kong 43.72 44.21 0.49 Indonesia 126.06 125.35 -0.71 Japan 72.56 72.09 -0.47 Korea 59.00 60.50 1.50 Malaysia 69.62 71.76 2.13 Philippines 97.22 96.00 -1.22 Thailand 86.83 86.63 -0.20 Vietnam 202.62 202.35 -0.28



1,656.1 1,652.6 -0.21





China 3,298.9 3,206.1 3,240.0 3,240.0 3,272.9 3,285.1 n.a n.a n.a Hong Kong 295.6 291.9 295.0 296.3 298.2 301.2 301.7 305.2 317.3 Indonesia 116.4 111.5 106.5 106.6 109.0 110.2 110.3 111.3 112.8 Japan 1,289.5 1,277.7 1,270.5 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 n.a Korea 316.8 310.9 312.4 314.4 316.9 322.0 323.5 326.1 327.0 Malaysia 135.9 136.0 134.2 134.5 134.9 137.5 138.3 139.1 139.2 Philippines 76.5 76.1 76.1 79.8 80.7 82.0 81.7 83.9 84.2 Singapore 246.1 237.7 243.4 244.1 246.2 252.1 254.2 255.8 259.3 Thailand 178.5 172.6 174.7 175.3 179.2 183.6 181.5 181.6 181.6 Vietnam 19.5 19.9 19.7 20.0 n.a n.a n.a n.a n.a EXTERNAL LIQUIDITY RATIOS

Reserves -







China 3,285.1 504.3 572.8 6.5 5.7 Hong Kong 317.3 144.7 711.2 2.2 0.4 Indonesia 112.8 50.5 38.3 2.2 2.9 Japan 1,270.9 70.9 2,255.1 17.9 0.6 Korea 327.0 150.9 132.6 2.2 2.5 Malaysia 139.2 58.0 32.4 2.4 4.3

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Philippines 84.2 19.3 8.0 4.4 10.5 Singapore 259.3 118.2 924.3 2.2 0.3 Thailand 181.6 67.2 57.2 2.7 3.2 Vietnam 20.0 29.9 6.9 - -

DATA RELEASES FOR THE DAY Country Indicators Period Last Previous

INDONESIA Foreign Reserves (USD bn) Dec 112.78 111.29 SINGAPORE Foreign Reserves (USD mn) Dec 259.31 255.77 PHILIPPINES Foreign Reserves (USD mn) Dec 84.2 83.9 HONG KONG Foreign Currency Reserves (USD bn) Dec 317.3 305.2

SELECTED ECONOMIC RELEASES CALENDAR (7 January 2013 11 January 2013) Expected Release

Date Country Indicators Period

1/7/2013 INDONESIA Consumer Confidence Index Dec INDONESIA Foreign Reserves (USD bn) Dec SINGAPORE Foreign Reserves (USD mn) Dec PHILIPPINES Foreign Reserves (USD mn) Dec HONG KONG Foreign Currency Reserves (USD bn) Dec 1/9/2013 THAILAND Benchmark Interest Rate Jan 9 MALAYSIA Imports YoY% Nov MALAYSIA Exports YoY% Nov SOUTH KOREA Unemployment Rate (SA)% Dec 1/10/2013 JAPAN Official Reserve Assets (USD bn) Dec THAILAND Consumer Confidence Economic Dec CHINA New Yuan Loans (RMB bn) Dec CHINA Imports YoY% Dec CHINA Exports YoY% Dec CHINA Trade Balance (USD bn) Dec PHILIPPINES Total Exports (YoY)% Nov INDONESIA Bank Indonesia Reference Rate% Jan 10 SOUTH KOREA Bank Lending to HH (KRW Tln) Dec CHINA Foreign Exchange Reserves (USD bn) Dec 1/11/2013 CHINA Consumer Price Index (YoY)% Dec CHINA Producer Price Index (YoY)% Dec JAPAN Current Account Balance YOY% Nov JAPAN Current Account Total (JPY bn) Nov SOUTH KOREA South Korea 7-Day Repo Rate % Jan 11




MARKET DEVELOPMENTS

Asian Stocks Drop for Second Day as Japan Exporters Fall. Asian stocks fell, sending the regional benchmark index lower for a second day, as Japanese exporters declined after the yen strengthened. The MSCI Asia Pacific Index slipped 0.7 percent to 130.55 as of 4:07 p.m. Tokyo time, erasing gains of as much as 0.3 percent. The regional benchmark gauge posted its seventh weekly advance last week, the longest winning streak since March last year, after the U.S. Congress approved a budget deal and manufacturing reports from China and the U.S. added to signs of a global recovery. The Nikkei 225 fell 0.9 percent, a second day of declines. South Koreas Kospi Index dropped 0.7 percent, while Australias S&P/ASX 200 Index slid 0.6 percent. Hong Kongs Hang Seng Index slid 0.9 percent and Chinas Shanghai Composite Index retreated 0.4 percent.

Oil Trades Near Four-Month High as Run Rates, Supply Seen Rising. Oil traded near the highest level in almost four months in New York before a government report that may show refinery utilization rose and stockpiles increased in the U.S., the worlds biggest crude-consuming nation. Crude for February delivery was at $93.29 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 2 p.m. Sydney time. The contract increased 10 cents to $93.19 yesterday, the highest settlement since Sept. 18.

BREAKING NEWS

GLOBAL Wages a Balm for U.S. Workers Facing Payroll-Tax Shock. An improving job market is

boosting wages and providing needed relief just as every American worker gets hit with a tax increase. Hourly earnings climbed 0.3 percent on average in December for a second month, the biggest back-to-back increase since the economic recovery began in mid-2009, Labor Department figures showed Jan. 4. Combined with a lengthening of the workweek, that brought the average weekly paycheck to $818.69, up 1.2 percent from October and the steepest two-month gain since February- March 2007, before the recession began. The boost comes just as the fiscal pact passed by Congress last week lets the payroll tax used to pay for Social Security benefits rise to 2010 levels, reducing paychecks by $41.67 from someone earning $50,000 who is paid twice a month. The higher salaries, together with the lowest gasoline prices in almost a year, will provide a lift to household spending, which accounts for about 70 percent of the worlds largest economy.

Holiday Sales Fail to Boost U.K.The holiday trading period failed to significantly boost sales in the U.K.'s struggling retail sector, data from the British Retail Consortium

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showed Tuesday, adding to fears that the economy contracted in the final quarter of 2012. Total sales, which include sales at stores that have opened in the past 12 months, rose 1.5% in December, compared with an increase of 1.8% in November. Retail sales were subdued for most of 2012 as consumers remained reluctant to spend in the face of stagnant wage growth, relatively high inflation, and the government's continuing austerity measures. The subdued BRC retail-sales figures follow a survey of purchasing managers released Friday that showed activity in the U.K.'s dominant services sector fell for the first time in two years in December 2012.

German Exports Dropped More Than Forecast in November. German exports declined

more than economists forecast in November as the sovereign debt crisis weighed on euro-area demand. Exports adjusted for working days and seasonal changes fell 3.4 percent from October, when they unexpectedly rose 0.2 percent, the Federal Statistics Office in Wiesbaden said today. Thats the steepest decline in more than a year. Economists had forecast a 0.5 percent drop, according to the median of 9 estimates in a Bloomberg News survey. Imports fell 3.7 percent from October. The big problem has been subdued demand in neighboring economies, and November saw a particularly weak level of activity in other euro-area countries, said the head of European research at Standard Chartered Bank in London. On a positive front, we think that the German economy should grind higher in the coming quarters.

Pakistan Seen Needing IMF Bailout as Rupee Plunges Before Vote. Pakistan may

require an International Monetary Fund bailout after a tumble in foreign reserves and a plunge in its currency to a record low, as a struggling economy saps support for the government before a general election. The rupee has slid 7 percent versus the dollar in the past year, with reserves down about 19 percent to $13.8 billion on a trade gap and aid repayments. The rupee is under serious pressure, said an economist at Standard Chartered in Karachi. The central bank doesnt have the ability to defend it. To restore stability in the foreign-exchange markets, they need IMF endorsement, said ex-Commerce Minister Mohammad Zubair Khan, now a World Bank adviser. Pakistan is evaluating a possible loan from the IMF as a buffer against shocks, Saleem H. Mandviwalla, the minister of state for finance, told reporters. An earlier, partially disbursed $11.3 billion IMF loan program expired in September 2011 after Pakistan failed to meet the conditions attached to it. The nation has to repay about $7.5 billion to the lender from 2012 to 2015, Moodys Investors Service said in July.

Australia Posts Widest Trade Gap Since 08 on Record Imports. Australias trade deficit

widened in November to the most since 2008 as transport equipment helped drive imports to a record, while overseas shipments of iron ore gained in the mining-driven economy. Imports outpaced exports by A$2.64 billion ($2.77 billion), compared with a revised A$2.44 billion shortfall in October, the Bureau of Statistics said in a report in Sydney today, the widest since March 2008. The data underscore central bank

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Governor Glenn Stevenss decision to reduce interest rates four times last year as commodity prices retreated. Policy makers are trying to revive demand outside of a resources boom that may crest in the first half of 2013, while a higher currency is fueling imports. People are happy to use the high Aussie dollar to spend where its affordable, said a Sydney-based economist at JPMorgan Chase & Co. who noted a jump in imported cars. Exports seem to be stabilizing. Exports rose 1 percent to A$24.7 billion, while imports advanced 2 percent to A$27.3 billion. Coal shipments abroad dropped 2 percent, the report showed, while transport equipment imports surged 57 percent.

REGIONAL

Japan to Buy ESM Bonds Using Forex Reserves to Help Weaken Yen. Japan will buy bonds issued by the European Stability Mechanism to help weaken the yen, Finance Minister Taro Aso said. The bond transactions will be funded by the countrys foreign exchange reserves, Aso told reporters today in Tokyo. The nation hasnt decided on the purchase amount, he said. Buying ESM bonds may help Prime Minister Shinzo Abe push down the yen while avoiding criticism of his currency policies from trading partners such as the U.S. and South Korea. The Europeans would be happy to see Japan buy ESM bonds, so Japan can avoid criticism from abroad and at the same time achieve its objective, said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. and a former central bank official. The yen pared gains after Asos comments, falling to as low as 87.83 per dollar. The U.S. criticized Japan for undertaking unilateral sales of the yen in 2011, after Group of Seven economies jointly intervened to weaken the currency in the aftermath of the record earthquake and tsunami that year.

Gold Lures Japan Pension Funds as Government Pledges Inflation. Japanese pension funds, the worlds second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the government seeks to target inflation to bolster economic growth, according to an adviser to the funds. Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present, said Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011. New Prime Minister Shinzo Abes pledge to spur inflation to 2 percent and end the yens appreciation means Japanese pension funds now have to hedge against rising prices and a currency declines after two decades of stagnation. Theyre set to jump into gold after 12 straight years of gains with the precious metal now 14 percent below its all-time high reached 2011. Gold priced in yen reached a record a week ago.

China growth can beat 8 percent for 20 years on reform, Lin says. Chinas economy has

the potential to grow annually over the next 20 years should the nation reduce support for state companies and unshackle banks, according to Lin Yifu, a former World Bank chief economist. To harness its potential, the country needs to widen income distribution and cap widespread corruption, he said. Lin predicted that Chinas gross domestic product

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will rise as much as 8.5 percent this year, driven by investment in infrastructure, upgrades of equipment and machinery, and personal consumption. China can sustain such a fast pace of growth in the long term by using technologies created in developed economies at relatively low cost, Lin said. China is following 13 other countries that have maintained an expansion rate of more than 7 percent annually for 25 years, including Singapore and South Korea, he said. Chinese banks need to be given more freedom to set interest rates, according to Lin. The current economic model sees lenders channel cheap capital to companies controlled by the government and elites, sowing the ground for corruption, he said.

Malaysia Funds Subway With First Exchange Bonds. Malaysia, Southeast Asias biggest local-currency bond market, will let retail investors fund Kuala Lumpurs new subway as it starts marketing its first exchange-traded notes to individuals. DanaInfra Nasional Bhd., the state-owned company thats financing the rail network, is kicking off the offerings and plans to complete the sale of Islamic bonds by Feb. 8, according to a statement today. The notes will pay a minimum profit rate of 3.7 percent, depending on demand and market interest, it said. The country joins Indonesia, Thailand and the Philippines in tapping the general public for funds and providing an alternative investment to bank deposits and equities. Malaysia sold a record amount of debt last year as companies help fund the governments $444 billion development program to build railways, roads and power plants. Malaysia had $318 billion of debt outstanding as of Sept. 30, compared with $265 billion in Thailand and $237 billion in Singapore, according to data from the Asian Development Bank. The governments development spending helped contribute to one of the highest levels of debt in Southeast Asia at 51.8 percent of gross domestic product. That compares with 24.1 percent in Indonesia, 50.9 percent in the Philippines and 44.9 percent in Thailand, according to data compiled by Bloomberg.


BIS Press Release: BIS appoints Peter Zllner to head its Banking Department

The BIS has announced the appointment of Peter Zllner as Head of its Banking Department. His appointment takes effect on 1 May 2013 and is for a five-year term. Mr Zllner's appointment fills the vacancy being created by the retirement of Gnter Pleines, who has been at the BIS since 1981 and has headed its Banking Department since 2005. Mr Zllner is currently a Member of the Governing Board and Executive Director for Financial Market Operations at the Central Bank of the Republic of Austria (OeNB).

http://www.bis.org/press/p130107a.htm

BIS Press Release: Christian Noyer to continue as Chairman of BIS Board

The BIS has announced the re-election of Christian Noyer, Governor of the Bank of France, for a second three-year term as Chairman of the BIS Board. The term will commence on 7 March 2013 after the expiration of Mr Noyer's current term of office. He first assumed his responsibilities as Chairman of the BIS Board on 7 March 2010.
http://www.bis.org/press/p130107a.htm

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http://www.bis.org/press/p130107b.htm

BIS Publication: Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools

The Basel Committee has issued the full text of the revised Liquidity Coverage Ratio (LCR) following endorsement on 6 January 2013 by its governing body - the Group of Central Bank Governors and Heads of Supervision (GHOS). The LCR is an essential component of the Basel III reforms, which are global regulatory standards on bank capital adequacy and liquidity endorsed by the G20 Leaders.

http://www.bis.org/publ/bcbs238.htm (Press Release)

http://www.bis.org/publ/bcbs238.pdf (Publication)

IMF Press Release: Statement at the Conclusion of the Visit by IMF Director Masood Ahmed to Egypt

Mr. Masood Ahmed, Director of the Middle East and Central Asia Department of the IMF, visited Cairo on January 7, 2012. At the conclusion of his visit, Mr. Ahmed made the following statement: The IMF remains committed to support Egypt in addressing its increasing economic challenges and moving to a more inclusive model of economic growth through a socially-balanced homegrown program. I am encouraged by the authorities commitment to take steps necessary to achieve fiscal and external sustainability. Following our discussions today, and based on the work that is to be carried out, we agreed that an IMF technical team would visit Cairo in the coming weeks to resume discussions on possible IMF financial support.

http://www.imf.org/external/np/sec/pr/2013/pr1306.htm





(%chg) China 6.2306 6.2306 6.2298 6.2241 0.09 0.1 Hong Kong 7.7503 7.7513 7.7508 7.7516 -0.01 0.0 Indonesia 9,793.0 9,788.0 9,670.0 9,827.0 -1.60 -1.8 Japan 86.75 88.15 87.79 87.4 0.45 -0.1 Korea 1,064.4 1,063.7 1,063.8 1,062.9 0.08 0.1 Malaysia 3.058 3.0468 3.0427 3.0422 0.02 -0.2 Philippines 41.005 40.925 40.913 40.82 0.23 0.1 Singapore 1.2218 1.2272 1.2323 1.2288 0.28 -0.7 Thailand 30.6 30.5 30.5 30.4 0.13 -0.4 Vietnam 20,840.0 20,843.0 20,840.0 20,840.0 0.00 0.0




(%chg) China 2,269.1 2,233.3 2,285.4 2,276.1 -0.41 0.3 Hong Kong 22,656.9 22,666.6 23,329.8 23,111.2 -0.94 -0.9 Indonesia 4,316.7 4,316.7 4,392.4 4,397.5 0.12 1.2 Japan 10,395.2 10,395.2 10,599.0 10,508.1 -0.86 1.1 Korea 1,997.1 1,997.1 2,011.3 1,997.9 -0.66 -1.6 Malaysia 1,689.0 1,681.3 1,694.2 1,687.3 -0.41 0.7 Philippines 5,812.7 5,812.7 6,044.9 6,048.9 0.07 3.2 Singapore 3,167.1 3,191.8 3,223.1 3,205.1 -0.56 0.1
http://www.bis.org/press/p130107b.htmhttp://www.bis.org/publ/bcbs238.htmhttp://www.bis.org/publ/bcbs238.pdfhttp://www.imf.org/external/np/sec/pr/2013/pr1306.htm

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Thailand 1,391.9 1,391.9 1,420.1 1,416.9 -0.23 0.7 Vietnam 413.7 413.7 434.2 447.2 2.99 6.9


3-MONTH INTERBANK LENDING RATE (%) 7-Jan 8-Jan bps change 7-Jan 8-Jan bps change China 2.120 1.620 -50.00 3.903 3.903 0.01 Hong Kong 0.097 0.097 0.00 0.398 0.398 0.00 Indonesia 4.197 4.188 -0.96 4.958 4.960 0.12 Japan 0.098 0.100 0.25 0.309 0.309 0.00 Korea 2.750 2.750 0.00 2.860 2.850 -1.00 Malaysia 3.000 3.000 0.00 3.210 3.210 0.00 Philippines -1.089 0.370 145.90 0.016 -0.078 -9.40 Singapore 0.029 0.029 0.00 0.377 0.377 0.00 Thailand 2.750 2.750 0.00 2.868 2.868 0.00 Vietnam 3.583 3.450 -13.30 7.000 6.875 -12.50


7-Jan 8-Jan bps change China 58.50 60.00 1.50 Hong Kong 43.81 42.50 -1.31 Indonesia 124.31 129.82 5.51 Japan 70.93 72.42 1.49 Korea 60.40 62.18 1.78 Malaysia 68.40 73.00 4.60 Philippines 94.50 96.67 2.17 Thailand 86.50 86.99 0.49 Vietnam 201.88 205.33 3.44

Note: Negative values indicate lower pricing of risk and positive values indicate higher pricing of risk.


1,646.9 1,651.5 0.28





China 3,298.9 3,206.1 3,240.0 3,240.0 3,272.9 3,285.1 n.a n.a n.a Hong Kong 295.6 291.9 295.0 296.3 298.2 301.2 301.7 305.2 317.3 Indonesia 116.4 111.5 106.5 106.6 109.0 110.2 110.3 111.3 112.8 Japan 1,289.5 1,277.7 1,270.5 1,272.8 1,273.2 1,277.0 1,274.2 1,270.9 n.a Korea 316.8 310.9 312.4 314.4 316.9 322.0 323.5 326.1 327.0 Malaysia 135.9 136.0 134.2 134.5 134.9 137.5 138.3 139.1 139.2 Philippines 76.5 76.1 76.1 79.8 80.7 82.0 81.7 83.9 84.2 Singapore 246.1 237.7 243.4 244.1 246.2 252.1 254.2 255.8 259.3 Thailand 178.5 172.6 174.7 175.3 179.2 183.6 181.5 181.6 181.6 Vietnam 19.5 19.9 19.7 20.0 n.a n.a n.a n.a n.a

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EXTERNAL LIQUIDITY RATIOS

Reserves -







China 3,285.1 504.3 572.8 6.5 5.7 Hong Kong 317.3 144.7 711.2 2.2 0.4 Indonesia 112.8 50.5 38.3 2.2 2.9 Japan 1,270.9 70.9 2,255.1 17.9 0.6 Korea 327.0 150.9 132.6 2.2 2.5 Malaysia 139.2 58.0 32.4 2.4 4.3 Philippines 84.2 19.3 8.0 4.4 10.5 Singapore 259.3 118.2 924.3 2.2 0.3 Thailand 181.6 67.2 57.2 2.7 3.2 Vietnam 20.0 29.9 6.9 - -


Country Indicators Period Last Previous INDONESIA Consumer Confidence Index Dec 116.4 120.1

SELECTED ECONOMIC RELEASES CALENDAR (7 January 2013 11 January 2013)



1/7/2013 INDONESIA Consumer Confidence Index Dec INDONESIA Foreign Reserves (USD bn) Dec SINGAPORE Foreign Reserves (USD mn) Dec PHILIPPINES Foreign Reserves (USD mn) Dec HONG KONG Foreign Currency Reserves (USD bn) Dec 1/9/2013 THAILAND Benchmark Interest Rate Jan 9 MALAYSIA Imports YoY% Nov MALAYSIA Exports YoY% Nov SOUTH KOREA Unemployment Rate (SA)% Dec 1/10/2013 JAPAN Official Reserve Assets (USD bn) Dec THAILAND Consumer Confidence Economic Dec CHINA New Yuan Loans (RMB bn) Dec CHINA Imports YoY% Dec CHINA Exports YoY% Dec CHINA Trade Balance (USD bn) Dec PHILIPPINES Total Exports (YoY)% Nov INDONESIA Bank Indonesia Reference Rate% Jan 10 SOUTH KOREA Bank Lending to HH (KRW Tln) Dec CHINA Foreign Exchange Reserves (USD bn) Dec 1/11/2013 CHINA Consumer Price Index (YoY)% Dec CHINA Producer Price Index (YoY)% Dec JAPAN Current Account Balance YOY% Nov JAPAN Current Account Total (JPY bn) Nov SOUTH KOREA South Korea 7-Day Repo Rate % Jan 11




MARKET DEVELOPMENTS

Asian Stocks Climb on U.S. Earnings. Asian stocks climbed, halting a two- day retreat, as Japans Nikkei 225 (NKY) Stock Average reversed losses after the yen weakened. The MSCI Asia Pacific Index climbed 0.4 percent to 131.28 as of 3:30 p.m. Tokyo time, erasing earlier losses of as much 0.3 percent. The benchmark gauge posted its seventh weekly advance last week, the longest winning streak since March, after the U.S. Congress approved a budget deal and Japanese shares rallied on expectations the new government would call for more stimulus. The Nikkei 225 increased 0.7 percent, reversing a loss of 1 percent. The Philippine Stock Exchange Index (PCOMP) climbed 0.7 percent, heading for a record close. Australias S&P/ASX 200 Index added 0.4 percent. Hong Kongs Hang Seng Index rose 0.2 percent, while Chinas Shanghai Composite Index slipped 0.6 percent. South Koreas Kospi Index lost 0.3 percent.

Gold Advances After Biggest Gain in a Week on Chinese Demand. Gold extended gains after climbing the most in a week yesterday amid signs of increased demand in China before the Lunar New Year. Spot gold gained as much as 0.3 percent to $1,664.10 an ounce and was at $1,662.35 at 3:07 p.m. in Singapore. Prices rose 0.8 percent yesterday, the most since Jan. 2, as data showed imports by China from Hong Kong climbed to a seven-month high in November. Volumes for cash bullion of 99.99 percent purity on the Shanghai Gold Exchange yesterday were almost double the daily average in 2012, data tracked by Bloomberg show.

Oil Fluctuates on Signs U.S. Crude, Fuel Stockpiles Increasing. Oil fluctuated in New York after an industry report showed rising stockpiles in the U.S., the worlds biggest crude-consuming nation. U.S. crude inventories

market update for asean+3 jan2013

Documents

percent of households

spending cuts

budget bill

percent global rally

house of representatives

tax gains

biggest oil consumer

worlds biggest economy