Equities

• Asian stocks fell Wednesday as BoJ’s report raised concerns about the global economic recovery
  • The BoJ quarterly Tankan index of sentiment at large manufacturers dropped to 5 in December from 8 in September. A positive number means optimists outnumber pessimists. The expected reading from analysts was 3
  • The MSCI Asia Pacific Index fell 0.7%  to 134.18 in Tokyo
  • Nikkei 225 was little changed at 10309
• US stocks advanced Tuesday on higher than expected retail sales
  • The S&P 500 rose 0.1% to 1,241.59 and DJIA advanced by 0.4%, to 11,476.54

Bonds

• Treasuries increased with longer maturity bonds leading the gains before a government report that economists said will show inflation remained subdued. There is conflict among professionals as to whether the increase in yields is due to a better outlook for the economy or worries over the US budget deficit
• The yield on the benchmark 10-year note fell seven basis points to 3.42% as of early morning in London
• Spain’s credit rating may be cut from Aa1 by Moody’s on concern over rising borrowing costs, potential losses in the banking system and high budget deficit
• The announcement by the rating agency came a day before Spain’s last scheduled bond sale of the year. The risk premium on Spanish 10 year bonds over German equivalents was at 249 basis points Tuesday from 283 basis points on Nov. 30

Commodities

• Tuesday, oil dropped for a second day after report showed US fuel stockpiles rose last week and after the Fed made few changes to a statement on monetary policy
  • January contract fell 0.4 % to $88.28 a barrel in New York
• Gold dropped  0.2% to 1,393.35 an ounce in Singapore following positive information from the US, reducing the demand for precious metals
  • Gold for February delivery contract fell 0.7% to $1,394.70 in New York