Malaysia

Unchanged, Rates To Stay Pat For The Rest Of 2013. As expected, the Bank Negara Monetary Policy Committee (BNM MPC) has agreed to keep the Overnight Policy rate at 3.00% and we continue to support their decision. There does however, seem to be stronger cautions over the less than sanguine global rebound but they remain optimistic that the current levels continue to be supportive for the domestic economy, which is expected to carry on wayward supporting the economy as a whole. (Please refer to Economic Viewpoint for further comments) 

Production In May Expanded By 3.4% YoY, after posting a revised 4.6% growth (4.7% previously) in April. This beat market expectations for a 2.0% growth. The rebound in mining and continued positive growth in manufacturing contributed to the production growth.  When removing the seasonal factors by means of the 3-month moving average (3mma), industrial production rebounded by 2.6% after two consecutive months of contraction. Compared to the previous month, production grew by 2.2% MoM and for the first five months of the year, production averaged by 1.5% YoY compared to 4.7% in the same period in 2012. (Please refer to Economic Viewpoint for further comments) 

Asia Pacific 

Indonesia Central Bank Surprises Again With Big Rate Hike. Bank Indonesia raised its benchmark policy rate by an unexpected 50 basis points on Thursday, as the central bank continued to surprise with aggressive steps to battle accelerating inflation, halt foreign outflows and bolster its weak currency. Indonesia is scrambling to stop an exodus of foreign funds from Southeast Asia's largest economy that got started after the U.S. Federal Reserve in May signalled it was thinking about winding down its easy money policies. With Thursday's hikes - double what the market anticipated - "we believe that market confidence will be stronger. Therefore, the reversal of capital will be shifted," said central bank deputy governor Perry Warjiyo. (Reuters)

Bank Of Japan Sees Modest Recovery In Economy. The Bank of Japan (BoJ) has said the country's economy is "starting to recover modestly". The upbeat assessment of the economy came as the BoJ left its huge monetary easing programme unchanged. It is the first time the BoJ has described the world's third-largest economy as being on the path towards expansion in more than two years. The bank is to stick to its plan of pumping more than 60tn yen ($606bn) a year into the economy. (BBC)

Australia’s Jobless Rate Hits 5.7%. Australia’s jobless rate jumped to 5.7 % in June, its highest level in almost four years, as the mining-driven economy gears up for a bumpy transition away from its reliance on commodities.  The seasonally adjusted unemployment rate compares with an upwardly revised 5.6 % in May, and is higher than the 5.6 % forecast by analysts. It is the highest level since September 2009 and is just shy of the 5.8 % peak reached at the height of the financial crisis. (AFP)

USA

US Budget Surplus Highest In Five Years In June. The US government reported a budget surplus of $116.5bn (£77.02bn) in June, the most in five years. The improving US economy meant  that tax receipts were higher than expected. Also,  government spending plunged by 47% due to package of spending cuts and tax increases passed in January, know as the sequester. Government owned mortgage firms, Fannie Mae and Freddie Mac, added $66.3bn in payments. They have been in public ownership since 2008. Despite that strong month, the Congressional Budget Office forecasts the annual deficit will be $670bn when the budget year ends on Sept. 30. (BBC)

Consumer Comfort In U.S. Improves To Highest Level  In Five Years. Consumer sentiment climbed for a fourth straight  week, reaching the highest level in more than five years as Americans grew more upbeat about their finances. The Bloomberg Consumer Comfort Index improved to minus 27.3 in the period  ended July 7, its highest level since January 2008, from minus 27.5 a week earlier. A measure of personal finances increased to the second-strongest reading since April 2008, while the buying climate gauge rose to a nine-week high. (Bloomberg)

US Jobless Claims Jump Above Forecasts; Prices Still Tame. The number of Americans filing new claims for unemployment benefits rose last week, although the level still appeared to point to healing in the nation's job market. Initial claims for state unemployment benefits increased by 16,000 to a seasonally adjusted 360,000, the Labor Department said on Thursday.  The reading was likely clouded by seasonal factors. The Labor Department can have a tough time seasonally adjusting claims in early July because many factories shut down during that period for retooling, but the scheduling for the shutdowns varies from year to year. Meanwhile, prices for U.S. imports and exports fell in June for the fourth straight month. Export prices fell by 0.1 %, matching the expectation in a Reuters poll, Labor Department data showed on Thursday. The drop probably reflects weakness in global demand which has been hit by Europe's debt crisis and slowing growth in China. Import prices slipped 0.2 % last month, dragged down by another month of declining costs outside of the fuels category. Petroleum prices rose 0.2 %. (Reuters)

Bernanke Supports Continuing Stimulus Amid Debate Over QE. Federal Reserve Chairman Ben S. Bernanke called for maintaining accommodation even as the minutes of policy makers’ June meeting showed them debating whether to stop bond buying by the Fed in 2013. “Highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy,” Bernanke said yesterday in response to a question after a speech in Cambridge, Massachusetts. (Bloomberg)

Europe

Greek Unemployment Hits New Record High (Again). From police to garbage collectors, Greek municipal workers took to the streets of Athens for a fourth day running on Thursday to protest against government plans to slash public sector jobs, while unemployment figures hit a new high. Fuelled by three years of austerity Athens has imposed in return for bailout funds from its foreign lenders, unemployment inched up to 26.9 % in April, the statistics service ELSTAT said - the highest since it began publishing jobless data in 2006. (Reuters)

Currencies

Bernanke-Inspired Liquidation Slams U.S. Dollar. The dollar remained under pressure versus major rivals Thursday, hit by a round of apparent liquidation a day after Federal Reserve Chairman Ben Bernanke assured investors that the central bank is in no hurry to raise interest rates. The ICE dollar index, which measures the U.S. unit against six other major currencies, traded at 82.707, down from 84.027 late Wednesday in North American trade. The index hit a three-year high earlier this week. The dollar fetched ¥98.95 in recent action, compared with ¥99.47 in North American trade late Wednesday. The euro had jumped past the $1.31 level after the Bank of Japan meeting to trade as high as $1.3146.  The shared currency fetched $1.3095 in recent trade, up from $1.2964 late Wednesday. The British pound climbed to $1.5182 from $1.4919. The embattled Australian dollar saw volatile trade, rising as high as 93.05 U.S. cents before giving up gains to trade at 91.86 U.S. cents in recent trade, up from 91.70 cents on Wednesday. (Market Watch)

Commodities

Brent Near Three-Month Peak As Dollar Wilts On Fed Stance. Brent crude steadied around three-month highs on  Thursday, supported by expectations the Federal Reserve will keep its stimulus programme to aid the U.S. economy, while a sharp decline in crude inventories lifted U.S. oil to near 16-month peaks. Brent crude for August delivery was little changed at $108.45 a barrel by 0137 GMT after settling at $108.51 on Wednesday when it touched a three-month top of $108.69. U.S. crude was off 4 cents at $106.48 a barrel, after peaking at $106.95 earlier, its highest since March 2012. The front-month contract jumped nearly 3 % in the previous session, its biggest daily rise since May. (Reuters)

Gold Rises 1.4 Pct As Fed Stimulus Extension Hopes. Gold rose 1.3 % to a near three-week high on Thursday, within striking distance to $1,300 an ounce, as investors flocked to the bullion market as a hedge after U.S. Federal Reserve Chairman Ben Bernanke reasserted that monetary stimulus will stay for some time. Spot gold climbed as much as 2.7 % to $1,298.36, its highest since June 24. It was last traded up 1.4% to $1,281.40 an ounce by 2:00 p.m. EDT (1800 GMT). Gold's strength also pushed silver to a threeweek high of $20.26 an ounce. It was last up 3.6 % at $20.02. Platinum rose 2.3 % to $1,403.24, while palladium edged up 0.3 % to 714.97 an ounce, respectively. (Reuters)