Asia

 Japan Upgrades Economic Assessment For September. Japan's government upgraded its assessment of the economy in September for the seventh time this year because of rising capital expenditure, in another sign Prime Minister Shinzo Abe's reflationary policies are boosting growth. The upgrade in the monthly economic report suggests the government sees the economy as strong enough to handle scheduled sales tax increases, although it did moderate its views on consumer spending and exports. On deflation, the government's view was unchanged from August, saying Japan is approaching an end to deflation as consumer prices excluding fresh food and energy were firming up. (Reuters)

 World Bank Chief Confident Of Chinese Growth Target. China should hit its gross domestic product growth target of 7.5% this year, World Bank group president Kim Jim Yong said yesterday. But he warned that rising interest rates in emerging markets in response to reports that the United States was preparing to scale back its quantitative easing (QE) programme showed that significant risk remained. “The rise in interest rates as a result of the announcement of the tapering of QE has exposed weaknesses in the economies of emerging markets,” he told reporters. “Our message is very strong to those emerging markets: think about those weaknesses and begin to move.” (Reuters)

 Indian Inflation Unexpectedly Quickens Before Rajan Review. Indian inflation unexpectedly accelerated to a six-month high in August as the rupee’s slide stoked import costs, adding pressure on central bank Governor Raghuram Rajan to sustain efforts to support the currency. The wholesale-price index rose 6.1 % from a year earlier, compared with July’s 5.79 % climb, the Commerce Ministry said in New Delhi today. The median estimate of 25 analysts in a Bloomberg News survey was for a 5.7 % gain. (Bloomberg)

USA

 Manufacturing Rebound Led By Autos Supports Growth. Factories turned out more cars, appliances and home furnishings in August, propelling the biggest increase in U.S. industrial production in six months and indicating manufacturing will contribute more to the expansion. Output at factories, mines and utilities rose 0.4 % after no change the prior month, a report from the Federal Reserve showed today in Washington. Manufacturing, which makes up 75 % of total production, advanced by the most this year. (Bloomberg)

 US Retail Sales Growth Slower Than Expected In August. US retail sales grew at a slowerthan-expected rate in August, despite increased demand for high-priced, one-off items such as cars. Sales were up by a seasonally adjusted 0.2%, as US consumers bought fewer items of clothing, sporting goods and building materials. Economists had expected sales to rise by 0.4%. Sales of cars rose by 0.9% last month according to the Commerce Department, having dropped 0.5% in July. (BBC)

Europe

 ECB's Draghi Says Euro Zone Recovery 'Fragile'. European Central Bank President Mario Draghi said on Monday that the euro zone's economy remained "fragile", unemployment was "still far too high" and reiterated that the euro zone's central bank would keep rates low. Speaking at a German industry event in Berlin, Draghi said while euro zone economic growth of 0.3 % in the second

quarter was welcome, "the recovery is only in its infancy". In July the ECB abandoned its tradition of never pre-committing on future moves by using so-called "forward guidance" to say it would keep its interest rates at current or lower levels for an extended period, a message Draghi reiterated on Monday. (Reuters)

 Spanish Public Debt Reaches Record Level. Spain's public debt reached a record high in June, the country's central bank said. The figure has risen to 942.8bn euros ($1.3 trillion), equal to 92.2% of the country's entire economic output, the bank said. This is nearly 15% higher than the same period last year and above the Spanish government's target limit of 91.4%, despite severe public spending cuts. Austerity measures have led to street protests as unemployment now tops 26%. (BBC)

 Portugal's Economic Progress Under Review. Representatives from the International Monetary Fund, the European Commission and the European Central Bank have begun their latest audit of Portugal's economic health. A raft of reforms was promised by Portugal's leaders in return for its May 2011 bailout. The visit from the so-called troika will determine whether the country receives its next instalment of bailout funds. It is expected to meet the criteria. The visit was originally expected to take place in July of this year, but was postponed following a political crisis. (BBC)

Currencies

 Dollar Pares Loss From Summers Quitting Fed Race. The U.S. dollar pared losses Monday following market reaction to former Treasury Secretary Larry Summers removing himself from consideration to be the next head of the Federal Reserve. The ICE dollar index, which tracks the greenback against six rivals, fell to 81.268 from 81.520 late Friday in North America. Earlier in the session, it had traded as low as 80.968. The dollar’s loss was the euro’s gain, with the European currency rising to $1.3339 from $1.3293 late Friday. Among other majors, the British pound jumped to $1.5901 from $1.5875 late Friday, extending last week’s gain of 1.5%. The Australian dollar appreciated to 93.13 U.S. cents from 92.42 U.S. cents. The Japanese yen also gained, as the dollar slipped to ¥99.09 from ¥99.36. Japanese stock and bond markets were closed for a holiday Monday. (Market Watch)

Commodities

 Brent Hits 3-Week Low Below $111 After U.S.-Russia Deal On Syria. Brent oil futures fell by more than a dollar on Monday to a three-week trough below $111 a barrel as supply worries eased after the U.S. agreed to call off military action against Syria in a deal with Russia to remove Damascus's chemical weapons. Brent crude for delivery in November had dropped 87 cents to $110.83 per barrel by 0249 GMT, after falling to as low as $110.25 earlier, its weakest since Aug. 23. U.S. oil for October delivery was down 82 cents at $107.39 a barrel. It hit a session trough of $106.76. (Reuters)

 Gold Down 1 Pct As Traders Focus On US Fed Tapering. Gold fell 1 % on Monday after the bullion market failed maintain a rally set off by former Treasury Secretary Lawrence Summer's decision to withdraw as a candidate to lead the U.S. Federal Reserve. Spot gold was down 1.1 % at $1,312.09 an ounce at 2:55 p.m. EDT (1855 GMT), having earlier fallen by as much as 1.4 % to $1,307.60. In other precious metals, silver fell 1.6 % to $21.85. Platinum slipped 1.1 % to $1,433.74 an ounce, while palladium rose 0.8 % to $702 an ounce. (Bloomberg)