Malaysia

M'sian 2012 Gross Fixed Capital Formation Hits Rm242bil, Highest In 7 Years. The country's gross fixed capital formation (GFCF) was valued at RM242bil in 2012, the highest since 2005, according to the Statistics Department. In real terms, GFCF posted a value of RM202bil (2011: RM168bil). For 2012, the expansion  in GFCF was supported by the services as well as mining and quarrying activities. Manufacturing which recorded a 10% growth in 2012, continued to contribute to GFCF's growth. In a statement, the Statistics Department said the share of GFCF increased to 25.7% of gross domestic product (GDP) compared with 22.3% in 2011. Since 2010, the growth of GFCF has outpaced the growth of GDP. (The Star)

Asia 

PBOC Says It Will Ensure Stability Of China Money Market. China’s central bank said it will use tools to safeguard stability in money markets and tight liquidity is set to ease, giving  the first official signs of relief for a cash squeeze in the world’s second-largest economy. The People’s Bank of China has provided liquidity to some financial institutions to stabilize money-market rates and will use short-term liquidity operations and standing lending-facility tools to ensure steady markets, according to a statement posted to its website yesterday. It also called on commercial banks to improve their liquidity management. (Bloomberg)

USA

Consumers To Factories Point To Durable Expansion. Consumers and companies are starting to act as if the U.S. economic expansion is here to stay. Purchases of new homes jumped in May to a five-year high, while business investment plans improved for a third straight month, figures from the Commerce Department showed today in Washington. Builders sold 476,000 new properties at an annualized rate last month, a 2.1 % gain from April, exceeding all estimates in a Bloomberg survey and the most since July 2008, the Commerce Department figures showed. The median selling price climbed to $263,900, up 10.3 % from May 2012. The last time households were this confident was in January 2008, according to another report. Orders for non-defense capital goods excluding aircraft, a proxy for future business investment in computers, electronics and other equipment, climbed 1.1 % in May after rising 1.2% and 1.1 % in each of the prior two months. Shipments of those products, a measure used in calculating gross domestic product, rose 1.7 %, the biggest gain since November. (Bloomberg)

Consumer Confidence in U.S. Increases More Than Forecast.  Confidence among U.S. consumers climbed in June to the highest level in more than five years, an indication spending will probably accelerate after cooling this quarter. The Conference Board’s index rose to 81.4, exceeding all forecasts in a Bloomberg survey and the highest since January 2008, from a revised 74.3 in May, data from the New York-based private research group showed today. The median forecast of 77 economists surveyed by Bloomberg called for a reading of 75.1. (Bloomberg)

Orders For U.S. Durable Goods Rose More Than Forecast.  Orders for U.S. durable goods rose more than forecast in May, reflecting broad-based gains that signal manufacturing is stabilizing. Bookings for goods meant to last at least three years climbed 3.6 % for a second month, the Commerce Department reported today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 3 % increase. Excluding transportation gear, where demand is volatile month to month, orders advanced 0.7%, also topping projections. (Bloomberg)

US Home Prices See Biggest Annual Rise Since 2006. US home prices have seen their biggest annual rise since 2006, a closelywatched survey suggests. The Standard & Poor's/Case Shiller index, which monitors single-family home prices across 20 cities, rose 12.1% in April compared to the same month last year. The jump, due to increasing demand and a shortage of supply, was bigger than many analysts had been expecting. Month-on-month, the index rose 2.5% in April compared to March. (BBC)

Europe

'Normal' Interest Rates A Long Way Off. Bank of England governor Sir Mervyn King has warned that world economies are "nowhere near" a return to "normal" interest rates. Sir Mervyn was speaking in his last public appearance as governor, in front of the Treasury Committee. He said that the unwinding of stimulus measures and raising of interest rates would only come after a significant economic improvement. He also criticised governments for failing to do enough. Sir Mervyn warned that  indications from the US Federal Reserve that stimulus measures would be wound down were being misinterpreted. (BBC)

UK Housing And Business Lending Diverge, Banks' Data Shows. More evidence of momentum in the housing market has emerged from the latest figures from UK banks, but business lending continues to shrink. The number of mortgages approved in May for house purchases rose by 24% compared with the same month in 2012.This followed an upward trend since the start of the year, the British Bankers' Association (BBA) said. However, there was a £1.7bn contraction in lending to non-financial businesses in May, the BBA added. It said that businesses were using cash as well as equity and bond market funding instead of loans from the major banks. (BBC)

Dutch Economy Contracts More Than Initially Estimated. The Dutch economy, the fifth largest in the euro area, contracted more than initially estimated in the first quarter, as estimates of consumer spending and investment were revised down. Gross domestic product fell 0.4 % from the previous three months,  according to final figures published by the national statistics bureau in The Hague on its website today. All eight economists in a Bloomberg survey had forecast that the bureau would maintain its initial estimate of a 0.1 % contraction released on May 15. The Netherlands is going through its third recession in four years. (Bloomberg)

Hungary Cuts Main Rate To Record As Bank Targets Growth. Hungary’s central bank cut its main interest rate to a record low and pledged “increased caution” as policy makers looked past a market rout sparked by the U.S. Federal Reserve saying it may phase out stimulus. The Magyar Nemzeti Bank lowered the benchmark two-week deposit rate to 4.25 % from 4.5 % in an 11th consecutive quarter-point cut, matching the forecast of all 25 economists in a Bloomberg survey. (Bloomberg)

Currencies

Dollar Up As Strong Housing Data Support Tapering. The U.S. dollar rose against rivals on Tuesday after a string of strong economic data reinforced expectations the Federal Reserve will move to slow its program of asset purchases later this year. The ICE dollar index, which measures the U.S. unit against six other major currencies, rose to 82.553 from 82.412 late Monday in North America. The euro — which makes up more than half of the comparative basket used for the ICE dollar index by weighting — fell to $1.3095 from $1.3122. The British pound fell slightly to $1.5430 from $1.5439. The dollar on Tuesday rose against the Japanese yen, trading at ¥97.76, up from ¥97.66 on Monday. The buck exchanged hands at 1.0507 Canadian dollars compared with C$1.0482 late Monday. The Australian dollar eased to 92.65 U.S. cents from 92.74 cents. (Market Watch)

Commodities

Oil Ends Flat In Thin Trade, Brent/WTI Spread Narrows. Crude oil prices ended near flat in a sluggish day of trading on Tuesday as stronger equity markets put a floor under prices and Brent's premium over U.S. crude slid below $6. Front-month U.S. crude oil futures finished the day 14 cents higher at $95.32 per barrel. U.S. crude is down nearly $4 from a $99.01 high made last Wednesday. Brent crude oil ended 10 cents higher at $101.26 per barrel. Brent has dropped more than $5 from its high near $107 last week. (Reuters)

Gold Slips As Robust Data Boosts Dollar. Gold eased on Tuesday as a raft of positive U.S. housing and consumer confidence data lifted the dollar for a fifth straight session and reinforced expectations the Federal Reserve could rein in its monetary stimulus program in the next few months. Spot gold was down $5.93, or 0.46 %, at $1,275.09 an ounce at 3:28 p.m. EDT (1928 GMT), off an earlier high of $1,288.80. It continued to underperform other precious metals, oil and copper. Silver was down 0.46 % at $19.56 an ounce. Spot platinum was up 1.52 % at $1,348.75 an ounce, while spot palladium was up 0.7 % at $663.72 an ounce. (Reuters)