Global

 Global Economic Growth Still Sluggish, Says OECD. Global growth is set to remain sluggish, a leading economic agency has said, as while the recovery in developed economies has strengthened, many emerging economies have slowed. The OECD said that activity was expanding in North America, Japan and the UK at "encouraging rates". But it warned that difficulties in emerging economies continued to drag down global growth. A sustainable recovery is not firmly established and risks remain, it said. The Organisation for Economic Cooperation and Development (OECD) said that growth in the second quarter of 2013 in the major advanced economies was stronger than expected. Overall in 2013, the OECD forecasts US growth of 1.7%, just ahead of Japan, with 1.6%. (BBC)

Malaysia

 Fitch Welcomes Fuel Subsidy Cut, Warns More Is Needed. Fitch Ratings welcomed the Malaysian Government’s move cut back on fuel subsidy and rein in import-intensive projects but warned that more needed to be done to address the country’s deteriorating public finances. The ratings agency said the measures announced on Monday were “credit-neutral” over the near term as they were consistent with its fiscal projections, which had already factored in a net 1ppt of GDP reduction in government expenditure in its fiscal projections for the period to 2015, “The fundamental driver of the narrowing current account surplus has been the widening public sector deficit, drawing attention to the health of medium-term public finances,” it said. However, it cautioned that effective fiscal consolidation in the next 12 months would by no means be easy. (The Star)

Asia Pacific

 Singapore Manufacturing Activity Expansion Slows. Manufacturing activity in Singapore expanded at a slower pace in August than in the previous month, an industry survey showed, suggesting a shaky recovery for Asian exporters despite signs of stabilisation in China’s economy. The Singapore Institute of Purchasing & Materials Management’s (SIPMM) Purchasing Managers’ index (PMI) fell to 50.5 last month from 51.8 in July, but stayed above the 50-point level that separates expansion from contraction for a fifth consecutive month. The institute’s PMI for the electronics sector, however, rose to 51.3 in August from 50.3 in July. (Reuters)

 China Sees Stronger Services Sector. China's services sector grew steadily in August as domestic demand picked up, data showed yesterday, adding to signs that government measures have started to steer the nation out of its longest slowdown. The nonmanufacturing purchasing managers' index (PMI) dipped slightly to 53.9 last month from July's 54.1 to be at the same level as in June, the National Bureau of Statistics (NBS) said. A reading above 50 indicates activity in the sector is accelerating, while one below 50 points to a slowdown. (Reuters)

 Australia Holds Rates At Historic Low. Australia's central bank left interest rates on hold yesterday, at a historic low of 2.5 per cent, in a widely expected move four days ahead of national elections. The Reserve Bank of Australia (RBA) last month reduced rates to their lowest level since it was established in 1959, underscoring fears of a slowdown as country's the decade-long mining boom throttles down. Yesterday, RBA governor Glenn Stevens said: "At its meeting today, the board decided to leave the cash rate unchanged at 2.5 per cent." The Australian central bank has cut back its official cash rate by 225 basis points since November 2011 to spur growth in the economy as it grapples with a cool down in investment in the Asia-driven mining boom. (AFP)

USA

 Manufacturing In U.S. Expands At A Faster Pace Than Forecast. Manufacturing is poised to make a bigger contribution to the U.S. expansion after a factory barometer unexpectedly climbed in August to the highest level in more than two years. The Institute for Supply Management’s index rose to 55.7, the strongest since June 2011, from 55.4 a month earlier, the Tempe, Arizona-based group’s report showed today. Readings above 50 indicate growth. The median forecast in a Bloomberg survey of economists was 54. (Bloomberg)

 Construction Spending In U.S. Climbed In July To Four-Year High. Construction spending in the U.S. increased in July to the highest level in four years, propelled by gains in residential real estate. Outlays climbed 0.6 percent to a $900.8 billion annual rate, the most since June 2009, after being little changed in June, the Commerce Department reported today in Washington. The median forecast of 51 economists surveyed by Bloomberg called for a 0.4 percent increase. (Bloomberg)

Europe

 OECD Lifts European Growth Forecasts On Recovery. The Organization for Economic Cooperation and Development lifted its growth forecasts for Germany, France and the U.K. while urging the region’s most-indebted nations to step up changes to improve competitiveness. Germany will expand 0.7 percent this year instead of the 0.4 percent predicted in May, while France will grow 0.3 percent instead of shrinking 0.3 percent as previously predicted, the Paris-based organization said in an interim report published today. Growth in the U.K., which isn’t part of the euro bloc, will be 1.5 percent, instead of the 0.8 percent forecast in May. (Bloomberg)

 Spain's Jobless Total Holds Steady. Spain's unemployment total remained at 4.7 million in August, government figures show, with the jobless figure dropping by just 31 people last month. The tiny reduction means the jobless total has now fallen for six months in a row. Spain's unemployment rate is 26.3%, the second highest in the eurozone and only below Greece where the jobless rate is 27.6%. The eurozone's unemployment rate stood at 12.1% in July. (BBC)

Currencies

 Malaysia Ringgit Hits 3-Week High After Fuel Subsidies Cut. The Malaysian ringgit hit a three-week high on Tuesday, outperforming some Southeast Asian currencies, as offshore funds bought it after the government cut fuel subsidies to reduce the country's fiscal deficit. The ringgit advanced 0.29 percent to 3.2645 as of 0307 GMT, after hitting 3.2590, its strongest since Aug. 13. That compared with a 0.23 percent gain for the Thai baht and 0.27 percent appreciation of the Philippine peso. The ringgit has suffered monthly losses since May when Najib's coalition extended its 56-year rule but had its worst-ever election performance. During the four months, it lost 7.4 percent against the dollar, according to Thomson Reuters data. One factor putting pressure on the ringgit in those months was an absence of reforms to reduce the fiscal deficit. (Reuters)

 Dollar Jumps After Surprise Manufacturing Gain. The dollar accelerated its march higher Tuesday as U.S. manufacturing data beat expectations, ahead of the monthly jobs report later this week and its implications for monetary policy. The ICE dollar index, which tracks the U.S. currency against six rivals, surged to an intraday high of 82.50 after the ISM data. The index was at 82.344 in recent trade, up from 82.118 on Monday. U.S. markets were closed for Labor Day on Monday. The dollar’s gain was the euro’s loss, with the European unit easing to $1.3166 from $1.3217 on Monday after failing to get much of a bounce Monday from upbeat euro-zone manufacturing data. The dollar inched up to ¥99.30 from ¥99.24 late Monday. In other currency action Tuesday, the British pound fell to $1.5559 from $1.5582 on Monday. But the Australian dollar jumped to 90.40 U.S. cents from 90.02 U.S. cents. (Market Watch)

Commodities

 Brent Holds Above $114 As Demand Hopes Offset Easing Syria Worries. Brent futures eased on Tuesday as worries over a military strike on Syria eased, but held above $114 a barrel as investors focused on prospects of a revival in demand growth with factory output across most of the world improving. Brent crude slipped 15 cents to $114.18 a barrel by 0309 GMT. U.S. oil fell 98 cents to $106.68 from Friday's settlement. Due to the Labor Day holiday, there was no Monday settlement for the benchmark. (Reuters)

 Gold Up 1.4 Pct As Republicans Back U.S. Strike On Syria. Gold climbed 1.4 percent on Tuesday after President Barack Obama won the backing of two top Republicans in Congress in his call for limited U.S. strikes on Syria to punish President Bashar al-Assad for suspected use of chemical weapons against civilians. Spot gold rose as high as $1,416 an ounce and was last up 1.4 percent to $1,413.51 an ounce by 3:24 p.m. EDT (1924 GMT). Among other precious metals, silver was up 0.7 percent to $24.30 an ounce. Platinum rose 1.2 percent to $1,532.80 an ounce and palladium gained 0.4 percent to $715.47 an ounce. (Reuters)