Outside Malaysia

US stocks extend climb as Dow sets record on bank stock rally

US stocks climbed as investors bought financial companies, extending the group’s advance to 22% since the presidential election. The S&P 500 Index added 0.4% to 2,270.76. The Dow Jones Industrial Average rose 91.56 points (0.5%) to 19,974.62.

BOE’s McCafferty sees prolonged period of above-target inflation

UK inflation will accelerate quickly above the Bank of England’s 2% target and could stay there for a prolonged period, according to policy maker Ian McCafferty. McCafferty said there are “limits” to how much officials will tolerate an overshoot above their 2% target, but any action must be weighed against its potential impact on the broader economy. He said the Monetary Policy Committee is as equally likely to tighten or ease policy in its next move.

UK retail sales grow at fastest pace in more than a year

UK retail sales grew at their fastest annual pace in more than a year this month, according to the Confederation of British Industry (CBI), which also warned that pressure on shoppers’ budgets could increase over the coming year. The CBI’s monthly retail-sales index climbed to 35 in December, the highest since September 2015, from 26 in November.

May holds out prospect of Brexit agreement by September 2018

The UK will discuss adopting a transition phase to ease its departure from the European Union (EU) in Brexit talks with the bloc, Prime Minister Theresa May said, as she promised to give more details of her thinking early next year. Businesses and the UK government might need time to adjust to leaving the EU and a temporary arrangement to smooth the way could be the solution, she said. May said she still intends to keep to her timetable and suggested that the negotiations could be finished within 18 months, leading to a final deal by September 2018.

Bank of Japan keeps policy unchanged, upgrades economic outlook

The Bank of Japan closed a tumultuous year for monetary policy with an upgrade to its assessment of the economy while keeping its yield-curve and asset-purchase programs unchanged. The central bank forecast a moderate recovery trend to continue amid a pickup in exports, better business sentiment and resilience in private consumption. However, inflation expectations remain weak and risks to the outlook abound, ranging from developments in the Chinese and US economies to Brexit and geopolitical uncertainties.

RBA balanced weaker jobs, strong housing in decision to hold

Australia’s central bank balanced “considerable uncertainty” in labor market momentum and resurgent property prices in Sydney and Melbourne in its decision to leave interest rates unchanged. “The board has sought to balance the benefits of lower rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets,” the Reserve Bank of Australia said. “Members recognized that this balance would need to be kept under review.”

Oil extends gain as industry report said to show supply drop

WTI extended a gain as an industry report was said to show US crude stockpiles fell last week. Brent for February settlement rose US$0.43 (0.8%) to US$55.35 a barrel.

Source: Affin Hwang Research - 21 Dec 2016