*Stocks in Asia picked up on the US market strength on Friday and had solid gains across the board
. Australia added 1.9%, the Nikkei was up 1.8%, Shanghai was 1.6% higher and the Hang Seng gained 0.7%. European indexes are however a bit lower on the session, with the Dax currently off by about 0.4%; the UK is closed for a bank holiday. US stock futures are essentially unchanged as I write.
*The Bank of Japan held an emergency policy meeting overnight. They kept their target rate steady at 0.10% but they expanded the special credit program by Y10 trillion up to Y30 trillion as they expressed the need to pay more attention to downside economic risks. Although they took note that the foreign exchange and stock markets have been unstable recently and there is growing uncertainty about their economy and the US as well. They continue to expect a moderate recovery; but beating deflation remains a critical challenge and BoJ boss Shirakawa says they can't rule out the possibility they may have to lower their economic forecast. However, Shirakawa declined comment on the strength of the Yen and the market began bidding up the currency right after his comments concluded; US/JY is down sixty pips at the moment at 84.62 and EU/JY is down 120 pips at 107.55. Prime Minister Kan says there will be a full stimulus package decided on next month and stressed that the his government will continue to work closely with the BoJ. Also a government spokesman reiterated concern over prolonged Yen gains and that they will take bold action on the Yen gains when necessary; for the time being the market seems determined to find the line in the sand on the value of the Yen.
*For the third month in a row in July New Home Sales in Australia were down, this time the month on month decline was 7.0%.
*The July reading of Personal Income and Spending is due out at 7:30am CDT. Income is forecast to grow 0.3% and the estimate for Spending is also +0.3%. The PCE Core inflation measure is expected to rise 0.1% on a month on month basis and to be +1.4% on a year over year basis.
*The August reading of the Dallas Fed's Manufacturing Activity Index is due out at 9:30am CDT, it is expected to be -16.0; it was -21.0 in July.
*St. Louis Fed boss Bullard will give some opening remarks at a conference on regulatory reform sponsored by his bank at 12:30pm CDT.