Malaysia

Malaysia Continues To Draw French Investors. Malaysia continues to attract investments from French companies with the latest being a factory to manufacture aircraft components in Sendayan, Negri Sembilan. Prime Minister Datuk Seri Najib Tun Razak said the investments were evidence of the strong relationship between both countries. Speaking at a joint press conference with French Prime Minister Jean-Marc Ayrault here yesterday, Najib described the investments as exciting. Ayrault said his country was ready to support all the projects to help Malaysia become a  developed country by 2020. “Malaysia is France’s second largest economic partner in Asean and there are some 260 French companies here. They are ready to support all the projects to help Malaysia achieve the developed status by 2020,” he said. (The Star)

Foreign Funds' Buying Spree Gets Less Frenzied. Foreign funds continued to be Bursa Malaysia's net buyer for the third consecutive week, albeit with a reduced buying interest. Foreign funds' net inflow slipped 18 per cent week-on-week to RM138 million in the week ended July 26 from RM168.3 million a week before, as a risk-aversion strategy ahead of major global events due to happen this week.  Based on average daily gross purchase and sale, foreign participation rate stood at RM808 million, the bottom most in 22 weeks.  As of last Friday, the cumulative net foreign purchase of Malaysian equity amounted to US$5 billion (RM16 billion). As for regional markets, foreign investors were the net sellers in Thailand and Indonesia, with net outflow of US$2.43 billion and US$470 million, respectively. (Business Times) 

Asia 

Credit Squeeze In Asia Now Worst Since Financial Crisis. Bank lending conditions in emerging Asian nations have tightened the most since the global financial crisis, according to the latest survey from the Institute of International Finance (IIF). The IIF's index of bank lending conditions in emerging Asia fell in the second quarter to 45.7, below the key 50-level that divides easing and tightening territory and its lowest level since the beginning of the survey in 2009. Asia also showed the tightest lending conditions of global emerging regions. The survey questioned 133 banks across Latin America, Europe, Asia and the Middle East- Africa region and Asia's headline figure of 45.7 was the lowest. Latin America was second-worst at 47.6 while Africa and the Middle East had the best result at 52.9. (CNBC)

RBI Says Restoring India Rupee Stability Is Key Policy Objective. The Reserve Bank of India said steadying the rupee to help preserve economic stability has become the priority for monetary policy and that more steps are needed to curb the nation’s current-account deficit. “The priority for monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth,” the Reserve Bank said in an economic review before today’s rate decision in Mumbai. Such a strategy will work only if reinforced by “structural reforms” to reduce the deficit and spur investment, it said. (Bloomberg)

USA

Pending Sales Of Previously Owned U.S. Homes Decline 0.4%. Fewer Americans signed contracts in June to buy previously owned homes, showing rising mortgage rates are beginning to restrain the housing market. The index of pending home sales dropped 0.4 %, less than forecast, to 110.9 in June after climbing a month earlier to the highest level since December 2006, figures from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey of 40 economists called for a 1 % decline. (Bloomberg)

Treasuries Fall On Fed-Tapering Speculation Before GDP, Jobs. Treasuries fell, with 10-year note yields reaching almost the highest level in more than two weeks, before the Federal Reserve meets this week to discuss whether to taper its $85 billion a month debtpurchase program. The difference in yield between Treasuries maturing in two and 30 years reached the widest in almost two years. The benchmark 10-year yield rose four basis points, or 0.04 percentage point, to 2.60 % as of 5 p.m. in New York, according to Bloomberg Bond Trader data. The price of the 1.75 % note due May 2023 declined 10/32, or $3.13 per $1,000 face amount, to 92 21/32. The yield reached 2.63 % on July 25, the most since July 10. (Bloomberg)

Europe

IMF Approves $2.3 Billion Aid For Greece. The International Monetary Fund on Monday approved a further 1.7 billion euros ($2.3 billion) in funds for Greece's bailout program after completing the fourth review of the cash-strapped euro zone state. Greece last week adopted the last piece of legislation its international lenders required to release the next batch of rescue loans, after two months of wrangling over unpopular measures to overhaul the economy. The total funds from the IMF, the European Commission and the European Central Bank comprise 5.8 billion euros. (Reuters)

Currencies

U.S. Dollar Falls Below 98 Japanese Yen. The U.S. dollar tumbled below 98 yen on Monday, extending its losing streak against the Japanese currency to its third session. The dollar dropped to 97.84 Japanese yen from ¥98.25 late Friday in North America. That’s the lowest level since June 26’s close of ¥97.79, according to FactSet data. The ICE dollar index, a gauge of the greenback’s movement against six other major currencies, was at 81.663,  near 81.665 late Friday in North America. The index fell 1.1% last week. The euro traded at $1.3263, down from $1.3274 on Friday. The British pound fell to $1.5349 from $1.5381. In other currency action, the Australian dollar fell to 92.00 U.S. cents from Friday’s level of around 92.28 U.S. cents and the New Zealand dollar fell to 80.26 US. cents from 80.87 U.S. cents Friday. (Market Watch)

Commodities

Brent Little Changed Above $107, Weak Demand Weighs As Dollar Supports. Brent futures were little changed above $107 a barrel on Monday as concerns surrounding demand growth were countered by a weak dollar and fears about supply disruptions. Brent crude slipped 6 cents to $107.11 a barrel by 0351 GMT, after ending 48 cents lower and sliding for a second straight week. U.S. oil fell 37 cents to $104.33 after settling 79 cents down. (Reuters)

Gold Eases After 3-Week Gain, Investors Await Fed Meet. Gold slipped on Monday, as investors took profits after three weeks of gains and turned their attention to a U.S. Federal Reserve policy meeting later this week that is widely expected to reaffirm its nearzero interest rate stance. Spot gold steadied 0.25 % lower at $1,329.90 an ounce by 3:45 p.m. EDT (1945 GMT). Spot silver was down 0.50% at $19.90 an ounce, having touched a one-month high of $20.60 last week. The gold/silver ratio rose to its highest since August 2010 at nearly 67. Platinum rose 1.05 % to $1,440 an ounce and palladium gained 2.35 % to $740 an ounce. (Reuters)