Asian Market Update

Daily Forex Fundamentals | Written by Trade The News | Sep 16 08 04:56 GMT |

AIG downgraded by Moody's, S&P, Fitch AIG downgraded by Moody's, S&P, Fitch and AM Best: 'The main reason for the rating actions is the combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses,' explained Standard & Poors credit analyst Rodney A. Clark. Implications of AIG downgrade: The downgrades mean that AIG's counterparties can now demand that it post an additional $14.5B in collateral (according to filing dating back to August). 'It is not clear how quickly AIG would have to produce those funds,' wrote the WSJ. 'In addition, AIG or its counterparties could demand early termination based on the downgrades, resulting in payments of up to about $5.4 billion, the filing said.' Sources close to the company said that if AIG can't secure funding by Wednesday, it may have to file for bankruptcy. Latest on Lehman: The WSJ reports that Lehman may reach a deal to sell parts of its business to Barclays Hewlett-Packard said that it will cut 24,600 workers over the next three years as it merges operations with EDS. Forex: The USD gained some ground in Asia against the EUR, GBP, AUD and NZD. USD/JPY traded lower, testing 104.00 in early trades. Between 17:00 EDT and 0:10 EDT: EUR/USD -0.26%, GBP/USD -0.47%, USD/CHF -0.17%, USD/JPY -0.37%, AUD/USD -2.28%, NZD/USD -1.45%, AUD/JPY -2.61%, NZD/JPY -1.82%. Equities: Asian stocks plunged on Tuesday, with financials leading most of the downside. South Korean shares were the worst hit in Asia, falling as much as 6% in early trades. At 0:04 EDT Japan's Nikkei is -5.28%, the S&P/ASX200 is -2.32%, South Korea's KOSPI is -5.33%, Hong Kong's Hang Seng index is -5.33%, and the Shanghai composite index is -3.16%. The S&P500 futures contract lost -1.48% since the U.S. close, last trading at 1,178.40. Mitsubishi UFJ, one of Japan's largest lenders, saw its largest decline since July 2004. Chinese equities traded sharply lower despite the PBoC's surprise rate cut, with the Shanghai Composite briefly dipping below 2,000 for the first time since Nov 2006. Commodities: Nymex crude oil lost -4.15% between 18:00 EDT and 0:09 EDT on long liquidation, last trading at $91.74/bbl. Spot gold lost some ground in Asia, down -1.27% to trade at $777/oz. Trade The News Staff Trade The News, Inc. Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.