Westpac Exec:Why a Market Correction is in the Making

We're setting up assuming Sydney will become a renminbi trading hub,said Rob Whitfield,Group Executive of Westpac Institutional Bank.The November G20 meeting is absolutely an incentive to a free trade agreement with China.A China slowdown would slow down the economy.It would certainly affect our performance.*
I do see that we will really see a significant,meaningful asset price correction.Credit spreads are narrow,forcing a move by many into higher risk assets.Junk bond yields are at all time lows.Asset bubbles are emerging as share markets have posted successive record highs in recent times despite tapering and mixed economic results.It is my view that the current environment is ripe for a market correction that both looks and feels like what we experienced in 1994.At that time,US Treasury bond prices plummeted,causing the Fed to raise rates,which resulted in higher borrowing costs and a market correction.
Such an event need not freeze the credit markets this time the way the global financial crisis did,however.The financial system has been reformed since then.
The failures that perpetuated the recent crisis today no longer exist,Mr.Whitfield pointed out,and our ability to withstand shocks is much stronger.*
There's massive risk on the Scottish independence vote.A lot of the uncertainty has been priced in.Certainly there are lots of signs we've started to see a sea change with the US dollar,a big divergence between the US and the rest of the world.A lot of ugly ducklings are out there.It filters through the Federal open market committee on Wednesday-more event risk.There could be a lot of dollar-buying across the board,and Treasury-selling.If Fed chair Janet Yellen surprises it,the market will feel very disappointed.*
Westpac(WBK)

Monday Newsline:Portugal's Better;China PMI;Langer Wins

Portugal will end its three-year,78 billion euro bailout from the EU and IMF on May 17,as it says it has financial reserves for one year and no longer needs an emergency line of credit.Portugal's exports and austerity measures have strengthened the economy to this level.The country's unemployment rate is at 15.3% and its debt to GDP is 129%.*
Australian bank Westpac showed a profit increase of 8%,while ANZ Bank's profit rose 11%.Westpac said the improvement was due to loan growth and wealth management fees.*
China National Nuclear Corporation is to be publicly listed in Shanghai.The IPO aims to raise 2.6 billion dollars.CNNC is China's second largest nuclear plant operator.*
The HSBC China Manufacturing PMI came in at 48.1,the fourth straight monthly decline.Below 50 indicates contraction in the sector.Deflationary pressure is still there in China,said Yao Wei,China economist at Societe Generale.We think the economy will remain relatively weak.A hard landing for China would be 5% growth.It's all about reform at the end of the day,Ms.Wei noted.*
Most Asian markets were lower Monday on the contraction of Chinese manufacturing.US stock futures were also lower on fears that the Ukraine crisis is getting out of hand,with large demonstrations and a deadly fire in Odessa,while the price of safe haven gold rose.*
In Champions Tour golf,German Bernhard Langer won the Insperity Invitational at The Woodlands,Texas by one stroke.It was his third win at the tournament,and with it he consolidated his lead in the Charles Schwab Cup standings.American Fred Couples took second,and Colin Montgomerie of Scotland came in third.

Australian Bank Shares Strong,Hyundai Slims Down

The major Australian banks Commonwealth Bank of Australia,National Australia Bank and Westpac rose 0.8% in Monday trading,shrugging off news that the four biggest banks will be required to set aside a further 1% of equity capital.The ASX 200 index climbed 0.51%.*
Other Asian markets also rose Monday,cheered by the US beating its GDP forecast last week,and the IMF announcing Sunday it would be raising its outlook for US growth on these strong results and the budget deal recently signed in Washington.The Shanghai Composite was up 0.24%,while the Hang Seng climbed 0.44%.Japanese markets were closed for the Emperor's Birthday holiday.*
South Korea's Hyundai Group is selling its three financial units to raise cash to reduce debt,as well as concentrate on its shipping,logistics and elevator machinery businesses.The sale is expected to bring in 3.1 billion dollars.*
Apple Computer has reached a deal with China Mobile allowing it to sell the iPhone in China as of next month.The move is expected to present Samsung with major competition in the vast Chinese market.*
In golf,Europe came swiftly from behind to win The Royal Trophy match play tournament at the Dragon Lake Golf Club in Guangzhou,China by one point.It was Europe's fifth win out of seven.