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Asian equities opened the week broadly lower: as investors are taking cautious positions
ahead of earnings releases, which start with Alcoa tomorrow.
Mild risk aversions took major currencies lower against the dollar and yen.
The World Bank lowered its growth forecast for East Asia and Pacific and noted that "China's
slowdown this year has been significant, and some fear it could still accelerate".
Also, it warned that "economic projections for E-A-P (East Asia and Pacific) are surrounded
by considerable uncertainties, and a variety of risks continue to loom over the global
and regional economy."
Risk from the euro was stemmed by recent policy moves but there are still the main risks of
"financial market disruptions" and the U-S "fiscal cliff".
Growth projection on China was revised to 7.7% this year and 8.1% in 2013, down from
8.2% and 8.6% respectively.
East Asian growth projection was lowered to 7.2% this year and to 7.6% in 2013, down from
7.6% and 8% respectively.
E-U finance ministers are meeting today in Luxembourg.
E-U Commissioner for Economic and Monetary Affairs Rehn said that negotiations on Grease's
13.5 Billion Euros austerity targets have "progressed well" and he expected the eurogroup
to "give a positive and supportive statement" on such progresses.
Rehn noted that it will take some more time for troika's report to finalize.
He also emphasized that it's important Grease's situation is concluded in the coming weeks.
Spain will also be a topic of discussion in the meeting.
Spain's Deputy Prime Minister Soraya Saenz de Santa-maria said last week that they'll
need "all the elements on the table and also the certainty that it would materialize" before
making a decision on a bale-out.
Last C-F-T-C data showed that Euro net shorts were basically unchanged at 50,300 contracts
on October 2nd.
Sterling net longs rose for another week to 30,100 contracts, hitting another 2012 high.
Yen longs continue to stay in range and rose slightly to 29,300.
Australian dollar net long dropped sharply from 63,700, down from the 2012 high of 89,600
in the prior week.
Canadian dollar net longs also dropped slightly to 101,200, down from 105,300.
The overall picture supports major currencies were basically in consolidation with Sterling
quietly building up some strength.
Meanwhile, The Aussie's sharp fall in net longs should be noted, and that was even before
the Reserve Bank of Australia's rate cut.