Malaysia

Zeti: Ringgit In For Period Of Greater Volatility. The ringgit may experience greater volatility in the coming months, especially with a lot of uncertainties in the international financial system, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz yesterday. "There is a lot of uncertainty in the international financial system. There will be some gradual re-pricing of risk. As a result, we are in for a period of greater volatility," she said when commenting on the outlook for the ringgit.  "What's important is that while there may be immediate reactions to developments that have taken place, any of this re-pricing by investors should in the end be aligned to fundamentals. I believe that there will be a convergence towards pricing according to fundamentals. (Business Times) 

Malaysia's Vehicle Sales Up 4.1% To 313,488 Units In Jan-June. Vehicle sales rose 4.1% to 313,488 units in the January-June 2013 period from 201,269 units a year ago, according to the Malaysian Automotive Association (MAA). The association said on Monday it was maintaining its total industry volume (TIV) forecast at 640,000 units for 2013. The MAA said the forecast was mainly due to the possibility of further tightening of the hire purchase loans approval process by Bank Negara Malaysia. Its president Datuk Aishah Ahmad however said aggressive sales campaigns and introduction of new models at competitive prices in the second half of the year should continue to spur buying interest. (The Star)

Unemployment On The Rise In Malaysia. Malaysia's unemployment is on the rise, with the seasonally adjusted unemployment rate at 3.4% in May compared with 3% in April and 3% a year ago. The Statistics Department said on Monday the number of unemployed persons increased in May by 35,800 persons (8.9%) to 439,4000 against 403,6000 in April. "The number of employed persons decreased by 80,900 (0.6%) to 13.04 million persons," it said. The labour force participation rate fell in May by 0.4% to 66% compared to 66.4% in April. "The decline was due to the decrease in the number of persons in the labour market by 45,000 persons (0.3%) to 13.48 million and an increase of 110,000 persons (1.6%) outside the labour force from 6.83 million to 6.94 million persons. (The Star)

Bank Negara Global Reserves At RM438.7b. Bank Negara Malaysia’s international reserves stood at RM438.7 billion (equivalent to US$137.9 billion) as at July 15 this year.  The reserve is sufficient to finance 9.6 months of retained imports and is 4.3 times the shortterm external debt, Bank Negara said yesterday. (Business Times) 

Asia 

No Capital Flight From China. China is not seeing any capital flight despite signs that global funds are exiting emerging markets on rising expectations of the US tapering off its bond-buying programme, China's foreign exchange regulator said on Monday. The State Administration of Foreign Exchange (SAFE) added that China's macro control policies and the business activities of domestic companies must adjust to a rising trend of two-way fluctuations in the Chinese yuan currency. "Currently, we do not have signs of active and sudden flight of foreign capital," SAFE said in a statement on its website. "There is wide acknowledgment in the market that the yuan currency rate is at its equilibrium level and the trend of two-way fluctuations is rising," it added.  (Reuters) 

Americas

Sales Of Existing U.S. Homes Unexpectedly Decrease. Previously owned home sales fell unexpectedly in June as tight supply and increasing rates for mortgages imperiled the real-estate market recovery in the U.S. Purchases fell 1.2 % to a 5.08 million annualized rate, the National Association of Realtors reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for a 5.26 million pace. Demand was the second-strongest since November 2009 following May’s downwardly revised 5.14 million rate. (Bloomberg)

Brazil Cuts $4.5 Billion In Spending To Meet Fiscal Goal. Brazil’s government is cutting spending for the second time in two months to help meet its fiscal target as it forecasts slower growth this year in Latin America’s biggest economy. The government is reducing expenditures by 10 billion reais ($4.5 billion) and lowering this year’s economic growth forecast to 3 % from 3.5 %, Finance Minister Guido Mantega said today. The government will meet its primary budget surplus target, which excludes interest payments, of 2.3 % of GDP this year without reducing investments, he said. (Bloomberg)

Europe

Bundesbank Says German Growth Slows After Strong Second Quarter. The Bundesbank said the German economy, Europe’s largest, is set to slow after a rebound in the second quarter of the year. “Signs of a slowdown in economic growth are increasing” in line with expectations, the Frankfurt-based central bank said in its monthly report today. “The assessment that  the German economy expanded strongly in the second quarter after a weather-related weak start to 2013 is being confirmed  by current indicators. Important contributions to growth in the second quarter should come from industry and construction.” (Bloomberg)

Portugal Bond Yields Fall As Government Vows To Stick To Bailout. Portuguese bond yields fell and stocks rallied on Monday after the two parties leading the coalition government vowed to keep an international bailout deal on track. Portugal's Prime Minister Pedro Passos Coelho confirmed he would announce a cabinet reshuffle and that the leader of the junior  coalition partner, Paulo Portas would be deputy prime minister in the new arrangement. On Monday, 10-year Portuguese bond yields dropped to 6.5 %, near a three-week low and the Portuguese PSI 20 stock index rose 1.95 %. (CNBC)

Currencies

Russia Makes Currency Interventions. The central bank sold US$200 million (RM636 million) in currency market interventions on July 18, limiting the rouble’s losses, data showed yesterday.  The central bank increases interventions as the rouble nears the boundary of the corridor for the rouble against a dollar-euro currency basket — which extends from 31.75 to 38.75 roubles — as per latest official statement. (Reuters)

Dollar Falls Broadly As Investors Wait For Labor Data. The U.S. dollar pulled lower Monday, extending a pattern of weakness visible for almost two weeks, as existing home-sales fell in June and Japan’s prime minister’s party netted a win in the country’s upper house. The ICE dollar index, which measures the greenback against six other major currencies, including the yen, fell to 82.235 from 82.633 late Friday in North America. The dollar fell below 100 Japanese yen, fetching ¥99.60 in recent trade, down from ¥100.60 on Friday. Among other major pairs, the  euro traded at $1.3185, up from $1.3139. Portugal’s president late Sunday backed the current coalition government of Prime Minister Pedro Passos Coelho. The British pound also gained against the greenback, trading at $1.5352, versus $1.5268. The Australian dollar fetched 92.42 U.S. cents, higher than 91.76 U.S. cents late Friday. (Market Watch) 

Commodities

U.S Crude Ends Lower On Profit-Taking, Brent Up Slightly. U.S. oil prices pulled back sharply on Monday from last week's 16-month high as traders sold to lock in profits from a blistering rally that briefly sent U.S. crude to a premium over Brent for the first time in nearly three years. The WTI contract for August delivery lost $1.14 cents, settling at $106.91. September WTI fell 93 cents to settle at $106.94, converging with the expiring August contract as traders settled their front-month positions. September Brent crude gained slightly, climbing 8 cents to settle at $108.15. (Reuters)

Gold Surges Above $1,300-An-Ounce Level, Bears Seek Cover. Gold surged 3 % and hit a one-month high on Monday, vaulting back over a technical threshold at $1,300 an ounce as speculators fearing a reversal of the recent downward price trend rushed to buy back bearish bets. Spot gold was up 3 % at $1,334.31 an ounce by 3:35 p.m. EDT (1935 GMT), after hitting a high of $1,338.91, its loftiest price since June 20. Silver rallied 5.4 % to $20.51. Among other precious metals, platinum rose 1.4% to $1,443.75 an ounce, while palladium eased 0.1% to $743.97. (Reuters)