Global

 G-20 Wrangles Over Stimulus Exit As Syria Roils Markets. Leaders of the world’s biggest economies at a Group of 20 summit in Russia grappled with threats to the global economy as the effects of the Syrian conflict added to the fallout from a potential stimulus exit. The BRICS countries pledged yesterday in St. Petersburg to create a $100 billion pool of currency reserves to guard against shocks even as Russia said U.S. President Barack Obama sought to ease concern about an abrupt pullback. Chinese and Italian officials warned that military intervention in Syria would risk harming the global economy. (Bloomberg)

Malaysia

 OPR Unchanged At 3.00%. To expectations, the Bank Negara Monetary Policy Committee (BNM MPC) has opted to keep the Overnight Policy Rate at 3.00% and we continue to concur. Similar to their previous meeting, they remain cautious on the effects of recovery in developed economies, which remain somewhat lackluster. In addition to that, there is also growing concern over growth momentum in emerging economies but still feel confident that the domestic economy is able to withstand itself. (Please refer to Economic Viewpoint for further comments)

Asia

 Bank Of Japan Keeps Policy Steady, Says Economy Recovering. The Bank of Japan kept monetary policy steady on Thursday and revised up its assessment of the economy, encouraged by growing signs the benefits of its stimulus policy are broadening. As widely expected, the BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($602 billion) to 70 trillion yen. (Reuters)

USA

 Private Payrolls In U.S. Increased By 176,000 In August. Companies took on 176,000 workers in August, in line with the average over the last two years and a sign that U.S. employers are optimistic about the outlook for demand, a private report based on payrolls showed. The increase in employment, the smallest in three months, followed a revised 198,000 gain in July, according to data today from the ADP Research Institute in Roseland, New Jersey. The median forecast of 43 economists surveyed by Bloomberg called for an August advance of 184,000. Private payrolls have averaged 179,000 in the last two years, data from ADP show. (Bloomberg)

 Jobless Claims In U.S. Decline More Than Forecast. Fewer Americans than forecast filed applications for unemployment benefits last week, indicating the labor market is improving. Jobless claims declined by 9,000 to 323,000 in the week ended Aug. 31, less than the lowest estimate of economists surveyed by Bloomberg, from a revised 332,000, according to Labor Department data issued today in Washington. Another report showed productivity climbed more than previously estimated in the second quarter. (Bloomberg)

 Services Sector Growth Jumps, But Factory Orders Lag. The pace of growth in the U.S. services sector accelerated in August to its fastest pace in almost eight years. A separate report showed that new orders for U.S. factory goods dropped in July. The Institute for Supply Management (ISM) said its services index rose to 58.6, its highest since December 2005, from 56 in July. The reading handily

topped economists' consensus expectations for 55 and beat the high end of forecasts. A reading above 50 indicates expansion in the sector. New orders for factory goods dropped in July by the most in four months, a worrisome sign for economic growth in the third quarter. The Commerce Department on Thursday said new orders for manufactured goods dropped 2.4 %. Analysts polled by Reuters had expected an even sharper decline. The decline was spread broadly across the nation's factories, from those producing computers and machinery to cars and electrical equipment. (Reuters)

 Consumer Comfort In U.S. Declines For A Fourth Straight Week. Consumer confidence fell for a fourth consecutive week to its lowest level since early April as Americans’ views on the economy and buying climate deteriorated. The Bloomberg Consumer Comfort Index eased to minus 32.3 for the period ended Sept. 1, its weakest reading since April 7, from minus 31.7. The gauge has dropped 8.8 points after reaching a more than five-year high in the week ended Aug. 4. The series of declines is the longest since January. (Bloomberg)

 Labor Costs Flat In Q2, Show Dormant US Price Pressure. U.S. labor costs were flat in the second quarter, a sign of minimal inflationary pressures in the economy that could fan concerns inflation is too low. The reading from the Labor Department on Thursday, which revised down an earlier estimate for the data, was well below the 0.8 % gain analysts were forecasting in a Reuters poll. At the same time, the report showed productivity rose 2.3 % during the period, which was a bigger gain than expected and gave a positive sign for the outlook for wages. (Reuters)

Europe

 Bank Of England Maintains Interest Rates At 0.5%. The Bank of England's Monetary Policy Committee (MPC) has voted to keep interest rates on hold at 0.5%. It has kept the key borrowing rate at that level since March 2009. The MPC also said it would make no change to the £375bn of monetary stimulus it is providing through its quantitative easing (QE) programme. Last month, BoE governor Mark Carney said the central bank would not consider raising interest rates until the unemployment rate fell below 7%. (BBC)

 Draghi Says ECB Ready To Act As Market Rates Advance. Mario Draghi said the European Central Bank is “ready to act” as rising money-market rates threaten his drive to reassure investors that borrowing costs will stay low. Bond yields extended their gains. “We will remain particularly attentive to the implications that these developments may have to the stance of monetary policy,” the ECB president said at his monthly press conference in Frankfurt today after the bank left its benchmark rate at a record low of 0.5 %. “I’m very, very cautious about the recovery. I can’t share enthusiasm, it’s just the beginning. The shoots are still very, very green.” (Bloomberg)

 ECB Improves Forecast For Eurozone Economy This Year. The European Central Bank (ECB) has improved its outlook for the eurozone economy this year. It now expects the single-currency area to shrink 0.4% compared to its previous forecast in June of a 0.6% contraction. The ECB on Thursday held interest rates at 0.5% despite tentative signs that the eurozone is recovering. The 18-nation bloc emerged from recession in the second quarter of this year, with growth of 0.3% recorded between April and June. (BBC)

 German Factory Orders Drop As Boost From Air Show Fades. German factory orders fell in July after demand was boosted by the Paris Air Show a month earlier. Orders, adjusted for seasonal swings and inflation, dropped 2.7 % from June, when they rose a revised 5 % that was larger than originally estimated, the Economy Ministry in Berlin said today. Economists forecast a July drop of 1%, according to the median of 39 estimates in a Bloomberg News survey. Orders climbed 2 % from a year ago, when adjusted for the number of working days. (Bloomberg)

Currencies

 Dollar Rises As Data Foreshadow Jobs Report. The U.S. dollar gained against rivals Thursday as readings on the labor market and service sector were broadly consistent with steady economic growth. The dollar pushed above 100 Japanese yen intraday Thursday, fetching ¥100.08 in recent trade from ¥99.75 late Wednesday. The ICE dollar index, a gauge of the greenback’s strength against six rivals, rose to 82.618 from 82.143 late Wednesday. The euro traded at $1.3121, lower than $1.3210 late Wednesday, while the pound fell to $1.5589 from $1.5628. In other currency action, the Australian dollar ended its three-session win streak against the dollar, buying 91.23 U.S. cents in recent trade compared with 91.76 U.S. cents late Wednesday. The Indian rupee gained on Thursday, with the dollar buying 66.115 rupees from 67.09 rupees the prior day. (Market Watch)

Commodities

 Crude Oil Up But Gains Capped By Worries About Fed. Oil futures rose on both sides of the Atlantic on Thursday as bullish U.S. economic data and a drawdown in U.S. crude inventories implied increasing use in the world's biggest oil consumer. Brent crude rose 13 cents to $115.04 a barrel by 1:24 p.m. EDT (1724 GMT) after an earlier high of $115.55. U.S. oil gained 81 cents to $108.04 a barrel after earlier reaching $108.54. (Reuters)

 Gold At 2-Week Low As U.S. Data Fuels Fed Tapering Talk. Gold sank almost 2 % to two-week lows on Thursday as upbeat U.S. economic data heightened expectations the U.S. Federal Reserve may soon rein in its massive stimulus program that has bolstered bullion prices. By 4:00 p.m. EDT (2000 GMT), the spot price of gold was down 1.6 % at $1,368.01 an ounce, adding to Wednesday's 1.5 % drop. Silver was down 1.1 % to $23.18 an ounce, while spot platinum was down about 1 % to $1,479.24 an ounce. Spot palladium was down 1.6 % at $684.47 an ounce. (Reuters)