TheChek News Flow

Asian Market Update: USD/JPY hits 5-year highs as speculation builds for more BOJ easingT

***Observations/Insights*** - Adobe reports in line and offers soft near-term guidance, but also raises long-term growth projections, sending shares higher afterhours. - US House of Reps passes the budget deal with a resolute 332-94 margin with minority dissents on both sides of the aisle. - Japanese Yen hit further by reports of diversification at the GPIF pension fund and more speculation of additional BOJ easing as early as Q1 of 2014. - North Korea's Kim Jong-Un has one less uncle; Supreme leader orders that his former right-hand advisor is executed just days after being removed from political duties; South Korea monitoring for any military instability following the purge. - Peru, Chile central banks on hold as expected.

***Economic Data*** - (JP) JAPAN OCT FINAL INDUSTRIAL PRODUCTION M/M: 1.0% V 0.5% PRELIM; Y/Y: 5.4% V 4.7% PRELIM; CAPACITY UTILIZATION M/M: 1.2% V 1.2% PRIOR - (NZ) NEW ZEALAND NOV NON-RESIDENT BOND HOLDINGS: 65.1% V 64.8% PRIOR - (NZ) NEW ZEALAND DEC ANZ CONSUMER CONFIDENCE INDEX: 129.4 V 128.4 PRIOR; M/M: 0.8% V 5.0% PRIOR - (NZ) NEW ZEALAND NOV BUSINESS MANUFACTURING PMI: 56.7 V 55.9 PRIOR (3-month high) - (SG) SINGAPORE Q3 FINAL UNEMPLOYMENT RATE: 1.8% V 1.8% PRELIM - (SG) SINGAPORE OCT RETAIL SALES M/M: -3.2% V +0.9%E; Y/Y: -9.4% V -5.7%E; RETAIL SALES EX AUTO Y/Y: -0.9% V -0.3% PRIOR - (KR) South Korea Oct Conference Board Leading Economic Index m/m: +1.6% v +0.6% prior - (PE) PERU CENTRAL BANK LEAVES REFERENCE RATE UNCHANGED AT 4.00%; AS EXPECTED - (CL) CHILE CENTRAL BANK LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 4.50%; AS EXPECTED

***Fixed Income/Commodities/Currencies*** - (CN) Daily Shibor fixings: O/N: 3.4321% v 3.4600% prior (9th consecutive decline) - (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥250B in 3-5yr JGB, ¥400B in 5-10yr JGB and ¥1T T-bills outright - (AU) Australia MoF (AOFM) sells A$700M in 2017 Bonds; avg yield 3.0148%, bid to cover 4.79x - (US) Weekly Fed Balance Sheet Assets Week ending Dec 11th: $3.950T (record high) v $3.889T prior; M1 y/y change: 8.5% v 8.4% w/w; M2 y/y change: 6.4% v 6.4% w/w

- SLV: iShares Silver Trust ETF daily holdings fall to 10,163 tonnes (lowest since July 11th) from 10,208 tonnes - GLD: SPDR Gold Trust ETF daily holdings fall 6.0 tonnes to 827.6 tonnes (lowest since Jan 2009)

- Japanese yen selloff accelerate in early session after Nikkei reports over building speculation for more easing. USD/JPY hit its highest levels since Oct 2008 above 103.80, while EUR/JPY and AUD/JPY are up over 60pips above 142.80 and 92.70 respectively. AUD/USD and NZD/USD are down are well off the highs in the afternoon session, falling below 0.8920 and 0.8220, helped by the tailwind for the greenback following impressive retail sales numbers reported in the US session ahead of next week's FOMC meeting.

***Speakers/Political/In the Papers*** - (CN) PBoC should keep liquidity at moderate loose level - Chinese press - (CN) China Ministry of Commerce: China ends dumping duties on some US vehicles; Effective from Dec 15th - financial press - (CN) Beijing City may promote trials for SOE preferred stock - Chinese press - (CN) China Academy of Macroeconomic Research: Sees 2014 GDP at 7.8% - (JP) According to QUICK Corp, over 70% of analysts surveyed expect further easing by the BOJ in H1 of 2014; 2% expect additional easing in the April-June quarter and 19% see it happening by the end of March - Nikkei - (JP) According to Federation of Electric Power Companies, Japan's 10 power companies generated 71.96B kwh in Nov, -0.5% y/y - (JP) Japan Fin Min Aso: Japan to almost double bilateral currency swap with Indonesia and Philippines - (JP) Japan Pension Fund (GPIF) to diversity portfolio beyond bonds, stock for the first time; to target overseas infrastructure - Japanese press - (KR) South Korea sees no specific movement by North Korea military - press - (KR) North Korea's Jang Song Thaek said to have been executed by authorities - financial press - (AU) Australia PM Abbott: Australia Central Bank (RBA) may get involved in currency market sometimes - (NZ) BNZ chief economist: May see 2014 GDP above 4%; House prices to continue rising amid strong job market - NZ press

- (US) US HOUSE OF REPRESENTATIVES PASSES 2-YEAR BUDGET PLAN; Voting results: 332-94 (62 Republicans and 32 Democrats voted against the deal) - NPD: Nov total video game sales $2.55B v $791.1M m/m, +7% y/y

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +0.9%, S&P/ASX +0.6%, Kospi -0.3%, Shanghai Composite flat, Hang Seng +0.4%, Mar S&P500 +0.3% at 1,773, Feb gold +0.2% at $1,227, Jan crude oil +0.1% at $97.56/brl

US markets: - CNDO: Presents interim data from autism study at Neuropsychopharmacology Meeting; +20.8% afterhours - ADBE: Reports Q4 $0.32 v $0.32e, R$1.04B v $1.04Be; +7.8% afterhours - DGX: Raises 2013 EPS guidance to $3.90-3.95 v $3.91e; Affirms Rev down 3.5% y/y; +1.3% afterhours

- UTX: Guides initial FY14 EPS $6.55-6.85 v $6.83e, R$64B v $66Be; Sees FY13 EPS around $6.15 v $6.15e (prior forecast $6.10-6.15); Rev $63B v $63.1Be - investor day slides; -1.1% afterhours - INTC: Google said to be considering plans to design its own server chips using ARM technology - financial press; -2.0% afterhours - ZQK: Reports Q4 $0.04 (adj) v $0.04e, R$476M v $509Me; -4.9% afterhours - APC: Kerr McGee unit has been held liable over Tronox spinoff; May have to pay over $5B - press; -9.3% afterhours

Notable movers by sector: - Materials: Showa Denko 4004.JP +1.3% (capex plans) - Consumer staples: Fonterra FCG.NZ +0.9% (FY14 guidance) - Industrials: AVIC Sanxin Co Ltd 002163.CN -4.4% (FY13 guidance); Ningbo Port 601018.CN +6.3%, Ningbo Marine 600798.CN +10.1%, Jiangsu Aucksun 002245.CN +4.3% (China State Council on Zhoushan Islands development) - Financials: Financial Street Holdings 000402.CN +2.2% (FY13 guidance) - Technology: Aisino Co Ltd 600271.CN +2.6% (announces acquisitions); Shenzhen H&T Intelligent Control 002402.CN +2.1% (issues shares on Capex); High Tech Computer Corp 2498.TW +2.5% (favorable UK court decision); Epistar 2448.TW +4.0%, Everlight 2393.TW +5.9%, Lextar 3698.TW +6.4% (positive comments from Credit Suisse) - Energy: Sinopec Shanghai Petrochemical 338.HK +5.5%, Sinopec Yizheng Chemical Fibre 1033.HK +7.2%, Liaoning Huajin Tongda Chemicals 000059.CN +5.8% (China NDRC raises fuel prices) - Healthcare: Jiangsu Sihuan Bioengineering 000518.CN +3.6% (issues share for clean fuel project)

Closing Market Summary: Major Averages Slide While Russell 2000 Outperforms

WRAPX The major averages finished the session on a lower note as the S&P 500 lost 0.4% while the Nasdaq shed 0.1%. The Russell 2000, which paced the retreat on Tuesday and Wednesday, added 0.2%, trimming its December loss to 3.5%.

After spending the first half of the session in a steady retreat, the S&P 500 found technical support in the 1772 area. Upon reaching that level, the index reversed sharply, and marched back to its flat line. There was no particular catalyst responsible for the turn, but steady inflows into influential cyclical sectors paved the way for a broad-market rebound. Although the S&P 500 battled back to its flat line, final-hour selling pressured the index to a modest loss.

Financials (unch) and industrials (+0.1%) led the afternoon bounce while energy (+0.5%) joined the rally in progress.

The financial sector was buoyed by regional banks as the SPDR S&P Regional Banking ETF (KRE 39.14, +0.26) jumped 0.7%.

Elsewhere, the industrial space received support from defense contractors with the PHLX Defense Index advancing 0.5%. Transport displayed intraday strength,but the Dow Jones Transportation Average surrendered its gain into the close. The bellwether complex settled flat. For its part, the energy sector finished near its session high even as crude oil surrendered its gain, ending flat at $97.46/bbl.

While most cyclical groups took part in the afternoon climb, the tech sector (-0.7%) struggled to keep pace with the broader market. Networking names pressured the largest S&P 500 sector after Oracle (ORCL 33.60, -0.96) was downgraded at RBC Capital Markets and Morgan Stanley. Oracle fell 2.8% while peers F5 Networks (FFIV 81.99, -2.25) and JDS Uniphase (JDSU 11.80, -0.38) lost 2.7% and 3.1%, respectively.

One tech component, Facebook (FB 51.83, +2.45), was immune to the sellingpressure following news the stock will be added to the S&P 100 and S&P 500. On the countercyclical side, the utilities sector (+0.1%) outperformed while consumer staples (-1.4%), health care (-0.8%), and telecom services (-0.4%)lagged. Notably, the health care space wa pressured by managed-care names like Humana (HUM 100.47, -1.46) and UnitedHealth Group (UNH 71.01, -1.13 while biotechnology rallied. The iShares Nasdaq Biotechnology ETF (IBB 215.72,+1.53) advanced 0.7%. Today's selling contributed to an increased demand for volatility protection,sending the CBOE Volatility Index (VIX 15.61, +0.19) to its highest close since October 15. Trading volume was just above average as 740 million shares changed hands onthe floor of the New York Stock Exchange.

Treasuries registered modest losses, sending the 10-yr yield up two basis points to 2.88%.

Initial claims for the week ending December 7 spiked to 368,000 (consensus 315,000) from 300,000. The Department of Labor said it is still experiencing problems with seasonal adjustment volatility, which means the headline is probably not as disappoint as it seems at first blush.

Separately, the retail sales data produced a cleaner read of things and it haspainted a mostly encouraging picture for personal consumption activity. Retail sales increased 0.7% overall in November following an upwardly revised 0.6% increase (from 0.4%) in October. Excluding autos, retail sales increased 0.4%on top of an upwardly revised 0.5% increase (from 0.2%) in October.

Sales gains were pretty broad-based. The notable exceptions were gasoline station sales (-1.1%), which tracked lower gasoline prices and clothing and accessories stores (-0.2%), which tailed off following a strong 2.6% increase in October.

Also of note, October business inventories increased 0.7% after increasing 0.6% in September. The Briefing.com consensus expected business inventories toincrease 0.3%.

The big upward surprise in inventories resulted from a large surprise in the previously released wholesale inventories report. Total business inventories include manufacturers, merchant wholesalers, and retailers. Typically, manufacturers (0.1%) and wholesalers (1.4%) are known prior to the release,but in this case the wholesaler data was not released until after the consensus made its prediction.

Tomorrow, November PPI and core PPI will be released at 8:30 ET.

o Nasdaq +32.4% YTD o Russell 2000 +29.9% YTD o S&P 500 +24.5% YTD o DJIA +20.1% YTD

UG >> Range is 10-10.25 (-5.9% at low end vs. close) / GS sole

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BN 12/12 16:58 *GM SAYS ALLIANCE WITH PSA CONTINUES BN 12/12 16:57 *GM SELLING STAKE VIA PVT PLACEMENT TO INSTITUTIONAL INVESTORS BFW 12/12 16:57 *GM SELLS ENTIRE 7% STAKE IN PSA PEUGEOT CITROEN BN 12/12 16:56 *GM REPORTS SALE OF PSA EQUITY STAKE

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*GM SELLS ENTIRE 7% STAKE IN PSA PEUGEOT CITROEN 2013-12-12 16:56:57.460 GMT

--MOLLY KISSLER

-0- Dec/12/2013 16:56 GMT