Asia

 FDI into China up 6.37% in first eight months. Foreign direct investment (FDI) into China rose 6.37% year-on-year in the first eight months of 2013, the government said Tuesday, adding it was a sign of investor confidence in the world's second-biggest economy. Incoming FDI, which excludes financial sectors, reached US$79.77bil for the January-August period, the commerce ministry said in a statement. For August alone the figure was US$8.38bil, up 0.62% on last year. That represented a substantial slowdown after rises of 24.13% in July and 20.12% in June. But commerce ministry spokesman Shen Danyang said that was mainly due to a high base figure a year ago. (AFP)

 Sri Lanka, China To Close Free-Trade Deal. Sri Lanka and China will finalise a free-trade agreement ahead of a Commonwealth summit in Colombo in November, a government minister said on Tuesday. The two sides have been hammering out details of the duty-free goods under the deal, Investment Promotion Minister Lakshman Yapa Abeywardena told reporters in Colombo. China has been investing heavily in Sri Lanka, with loans and expertise instrumental in building ports, highways, railways and power plants in the Indian Ocean nation. The minister gave no details of the pact with China, but said Sri Lanka's US$3.7bil garment manufacturing industry would feature strongly. Trade is currently heavily skewed in China's favour, with the powerhouse exporting US$2.66bil worth of goods to Sri Lanka last year, and Sri Lanka's exports to China totalling US$113mil. (AFP)

 Turkey Bank Keeps Rates Unchanged With ‘Cautious Stance’. Turkey’s central bank kept its three main interest rates unchanged today, holding off on matching monetary-policy tightening in other developing countries. Central bank Governor Erdem Basci kept the benchmark one-week repurchase rate at 4.5 %, abiding by a commitment made last month. He also kept the overnight lending and borrowing rates, which mark the upper and lower ends of his interest-rate corridor, at 7.75 % and 3.5 % respectively. The decisions matched the expectations of nine economists surveyed by Bloomberg. (Bloomberg)

USA

 Cost Of Living In U.S. Increases Less Than Forecast. The cost of living in the U.S. rose less than forecast in August, a sign it will take time for inflation to reach the goal of Federal Reserve policy makers as they consider trimming stimulus designed to bolster the economy. The consumer-price index increased 0.1 %, the least in three months, after a 0.2 % gain in July, Labor Department figures showed today in Washington. The core measure, which strips out food and fuel, also rose 0.1 %. Another report showed homebuilder confidence held this month at the highest level since 2005. (Bloomberg)

 Homebuilder Confidence In U.S. Holds At Highest Level Since 2005. Homebuilder confidence held in September at the highest level in almost eight years, a sign housing will remain a bright spot for the U.S. economy. The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005, a report from the Washington-based group showed today. Readings greater than 50 mean more builders view conditions as good than poor. (Bloomberg)

 U.S. Net Inflow Of Long-Term Securities Rises To $31.1 Billion. Foreign investors were net buyers of U.S. long-term portfolio assets in July as China and Japan boosted their holdings of Treasuries. The net long-term portfolio investment inflow was $31.1 billion after a revised $67 billion outflow in June, the Treasury Department said in a statement today in Washington. Net purchasing of long-term Treasuries by private foreign investors was $49.8 billion compared with selling of a net $40.1 billion the prior month, the department said. (Bloomberg)

 US Budget Deficit To Rise To 3.5 % Of GDP By 2023. Near-term improvements in the U.S. debt and deficit outlook will be more than overtaken by the rising costs of caring for an aging population over the next 30 years, the Congressional Budget Office said on Tuesday. In new long-term forecasts, the CBO projected that with no changes to tax and spending laws, the deficit would reach 6.4 % of gross domestic product by 2038 compared to 3.9 % this year. Public debt held would reach 100 % of GDP in 2038 versus 73 % this year, the non-partisan CBO forecast. (Reuters)

Europe

 European Car Sales Drop 5% In August. European car sales fell 5% in August compared to the same month last year according to the European Auto Manufacturers' Association. In total 653,872 new cars were registered in August. The UK was the only major market to show growth, up 10.5%. France's Peugeot saw the biggest decline, sales fell 18%, while Europe's biggest car maker, Volkswagen saw an 11% fall in sales and BMW posted a 9.9% rise in August. The figures relate to the 27 countries in the European Union plus those in the European Free Trade Association. For the first 8 months of the year 7.84 million cars have been registered, the lowest figure for January to August since the Auto Association started to collect figures in 1990. (BBC)

 UK Inflation Rate Falls To 2.7% In August. UK inflation measured by the consumer prices index (CPI) fell to 2.7% in the year to August, from 2.8% in July. It means prices are still rising faster than wages, which rose by 1.0% on average over the same period. The Office for National Statistics said the drop was due to air fares, petrol and diesel, and clothing prices rising more slowly than in August 2012. Inflation as measured by the retail prices index (RPI) rose to 3.3% in August from 3.1% in July. (BBC)

 German Investor Confidence Rises To Three-Year High. Confidence among German investors has reached its highest level for three years, a survey suggests, boosting optimism for a eurozone recovery. A poll of investor confidence by German think-tank ZEW rose to 49.6 points in September, up from 42 in August and the highest level since 2010. The figure was higher than expected and the euro strengthened against the dollar after the survey was released. The ZEW index was based on a survey of 260 analysts and investors. (BBC)

 Crisis In Greece: Pm Samaras Sees Recovery By 2019. Greek Prime Minister Antonis Samaras has said the debt-ridden country could return to pre-crisis living standards within six years. "According to most [experts], we will not need a couple of decades, not a couple of generations, but only six years," he said in a speech. He spoke in Rome before travelling to Brussels to meet EU officials. International lenders are due to conduct a new audit of Greece, where strikes against cuts are under way. Greece's economy has shrunk by 23% since 2008, and international lenders expect it to diminish by a further 4.2% this year. The country has received two aid packages totalling about 240bn euros ($321bn) and will need about 10bn euros more to cover a funding gap. (BBC)

Currencies

 Dollar Slips Ahead Of Federal Reserve Guidance. The U.S. dollar continued to weaken Tuesday, as Federal Reserve policy makers started a two-day meeting that’s expected to result in a modest scaling back of the central bank’s bond-buying program. The ICE dollar index, which tracks the greenback against six rivals, fell to 81.167, down from 81.268 late Monday in North America, while the WSJ Dollar Index edged down to 73.46 from Monday’s close at 73.54. The euro gained a little ground after a stronger-than-expected reading from the September ZEW index of German investor expectations. The euro traded at $1.3355 in recent action, up from Monday’s $1.3339, and the British pound rose slightly to fetch $1.5904 versus $1.5901. The Japanese yen fell, with the dollar ticking up to ¥99.16 from ¥99.09. The Australian dollar rebounded after initially extending losses on the release of minutes from the latest Reserve Bank of Australia policy meeting. (Market Watch)

Commodities

 Brent Ends At Six-Week Low As Fears Over Syria Fade. Brent crude oil prices settled at a six-week low on Tuesday as major world powers met to draft a resolution to destroy Syria's cache of chemical weapons, calming investor fears of an imminent U.S. military response. The resumption of some Libyan output also pressured prices. Brent crude for November delivery settled $1.88 per barrel lower at $108.19, after trading as low as $107.41, the lowest settlement price since Aug. 8. The contract dipped below the 200-day moving average at $108.53. The benchmark slid 2.4 % on Monday, its steepest one-day decline since June 20. U.S. crude for October delivery settled $1.17 per barrel lower at $105.42, below the 50-day moving average of $106.60, after trading as low as $105, its lowest since Sept. 3. The contract expires at the end of trading on Friday. (Reuters)

 Gold Slips On Tame U.S. Inflation, Market Braces For Fed. Gold fell on Tuesday on muted U.S. inflation data and as investors braced for the expected announcement by the Federal Reserve of a reduction in its bond-buying stimulus. Spot gold fell 0.2 % to $1,310.55 an ounce by 3:13 p.m. EDT (1913 GMT). On Monday, gold tumbled 1.5 % to a five-week low of $1,303.85. In other precious metals, silver edged up 0.1 % to $21.72 an ounce, after falling 2.3 % in the previous session. Platinum fell 0.9 % to $1,420.99 an ounce, while palladium gained 0.2 % to $702.72 an ounce. (Reuters)