Malaysia

World Bank Sees Solid Growth For Malaysian Economy. World Bank expects the Malaysian economy to enjoy solid growth of 5.1 per cent this year as well as in 2014, underpinned by strong consumer and business spending. The growth forecast for 2013 comes within the official forecast of five to six per cent and the World Bank says there is still a lot of value addition of investments in the pipeline this year. Investment growth has been driving up imports of capital goods and construction services.  In its latest Malaysia Economic Monitor which was launched here yesterday, the World Bank said while the momentum in domestic demand looks set to slow down in 2014, global demand is expected to help ailing exports, thus keeping the overall pace of growth unchanged. (Business Times) 

Asia 

China Beige Book Shows Fewer Companies Borrowing as Rates Rise. Chinese bankers are reporting increased lending while fewer companies are taking out loans, an incongruity that helps explain the recent increase in borrowing costs, a private survey showed. The number of companies reporting loan applications in the second quarter fell 13 percentage points from the previous period to 38%, the survey from New York-based China Beige Book International said yesterday. The proportion of banks showing higher lending to businesses rose 10 percentage points to 45%, indicating that “credit appears to be concentrated on a few borrowers,” according to the report. (Bloomberg)

USA

Bond Fund Outflows Hit Record Level on Tapering Fears. Mutual and exchange-traded funds hemorrhaged a record volume of bonds in June, according to a fresh report by TrimTabs Investment Research, as investors fear the impact of a scaling back of the U.S. Federal Reserve's bond purchasing program.  The global sell-off in bonds began on May 22, after the minutes of the Fed's policy meeting signaled that its bond-buying program—which has suppressed yields and boosted stocks—could soon be pared back. Fed Chairman Ben Bernanke echoed these comments at a press meeting last Wednesday, suggesting that asset purchases could be scaled back later this year, if economic data continued to show improvement. Bond market outflows continued on Monday, pushing the yield on 10-year U.S. Treasurys to 2.61 %, close to a 2-year high. Yields on euro zone government bonds also surged upwards, with German 10-year bund yields hitting 1.78 %, a high not seen since April 2012 (Bloomberg)

Europe

German Business Confidence Rises In June. Germany's Ifo index of business sentiment rose slightly in June, raising hopes that the eurozone's largest economy is returning to stronger growth. The index rose to 105.9, up from 105.7 the month before. Germany's economy shrank by 0.7% in the final quarter of 2012, and grew just 0.1% in the first quarter of 2013.  But the Organisation for Economic Co-operation and Development is forecasting 0.4% growth for the year. (BBC)

UK Housing Report Critical Of Government 'Short Termism'. Successive governments have failed to produce a coherent long-term strategy for housing, the Royal Institution of Chartered Surveyors has said. In a report, the Rics housing commission said some of the coalition's policies were providing short-term help for the house-building industry. But it argued that ministers' lack of consistency over the past 50 years has exacerbated the failures of the market. The Rics study concluded that the housing market has not delivered enough homes at affordable prices. It welcomed the government's Help to Buy scheme - which lends people up to 20% of the value of a new-build home - but called for further action to increase the supply of properties. (BBC)

Currencies

Iran Rial Gains 15% Since Rohani Win On Optimism For Thaw. The Iranian rial has gained 15 % since the victory of president-elect Hassan Rohani, who has said he will seek an easing  of international sanctions in an effort to revive the economy. The currency strengthened to 31,500 rial a dollar in unregulated trading shortly before markets closed yesterday, from 36,250 on June 13, the day before Rohani’s surprise first-round election victory, according to Daily Rates For Gold Coins and Foreign Currencies, a Facebook page

used by businessmen based in Iran and abroad. Unlike President Mahmoud Ahmadinejad, who advocated a confrontational approach to Western nations, Rohani has said he will bring more transparency to Iran’s nuclear program in an effort to roll back some of the U.S. and European Union measures against the country, which cut oil exports and pushed inflation to 30 %. The rial had lost more than half of its value against the dollar in the past year amid financial and energy sanctions. (Bloomberg)

Dollar Tapers Gains After Dovish Fed Speeches. The U.S. dollar posted a mixed performance against major rivals Monday, tapering gains or swinging to losses, as Federal Reserve officials sounded a dovish tone in speeches. The ICE dollar index, which measures the U.S. unit against six other major currencies, rose to 82.412 from 82.302 late Friday in North America. The greenback fell against the Japanese yen in recent trade, exchanging hands at $97.66 compared with ¥97.73 late Friday. It had fetched ¥98.55 in Asian trading hours. The euro — which makes up more than half of the comparative basket used for the ICE dollar index by weighting — fell to $1.3122 from $1.3138 late Friday. The U.S. dollar rose against the Canadian dollar to C$1.0482, up from C$1.0456. But the British pound edged higher to $1.5439 from $1.5428. The Australian dollar rose to 92.74 U.S. cents from 92.45 U.S.  cents late Friday. (Market Watch)

Commodities

Oil Ends Up, Off 3-Week Low As Canada Floods Threaten US Imports. Brent and U.S. crude prices rose on Monday, rebounding off a three-week low as record flooding in Canada's main oil-producing province threatened exports to the United States. Brent crude for August delivery settled up 25 cents at $101.16 a barrel, after bottoming at $99.67. Last week Brent fell 4.7 %. U.S. crude for August delivery settled up $1.49 at $95.18 a barrel, rallying off of a three-week low of $92.67. (Reuters)

Gold Down 1 Pct On China Fears, Wall St Margin Calls. Gold fell around 1 % on Monday, extending last week's 7 % slide as fears of a cash crunch in China spooked investors, and a slide in U.S. equities prompted some to liquidate bullion to cover margin calls.     Other precious metals including silver and platinum group metals also tumbled on global economic fears.  Spot gold  was down 1.1 % to$1,282.74 an ounce by 4:01 p.m. EDT (2001 GMT). Among other precious metals, silver fell 2.3 % to $19.61 an ounce, having reached a near-three year low of $19.35 last week. Platinum fell 3.1 % to $1,332.49 an ounce and palladium was down 2 % to $659.72 an ounce.  (Reuters)