Global

 Emerging Mart Banks, Firms Borrow US$6trl. Companies and banks in developing countries have borrowed almost US$6 trillion (RM19.44 trillion) from foreign lenders, a 50 per cent jump in four years. But unlike the 1990s, a big chunk of this debt is from local subsidiaries — and in local currencies. That lowers the risk of a funding crunch. Borrowers in developing countries owed foreign lenders US$5.85 trillion at the end of the first quarter, according to the Bank for International Settlements. But after excluding localcurrency loans by the local affiliates of foreign banks, claims were US$3.45 trillion. (Reuters)

Malaysia

 Inflation In August Tapered Slightly To 1.9% YoY after increasing by 2.0% in July. This is due to a general fall of prices across the board, particularly food & beverages and the transportation index. On a monthly comparison, inflation rate increased by 0.1% MoM. Inflation averaged at 1.7% YoY for the first eight months of the year, compared to 1.8% in the same period in 2012. The core inflation (minus food and beverages) moderated slightly to 1.1% YoY (July: 1.2%), and by 0.2% MoM. Year-to-date it averaged at 1.0% to 1.3% in 2012. (Please refer to Economic Viewpoint for further comments)

Asia

 Asia Business Sentiment Drops Sharply In Third Quarter. Business sentiment among Asia's top companies deteriorated in the third quarter, led by businesses in export engines such as China and South Korea, ending three consecutive quarters of improving sentiment, the latest Thomson Reuters/INSEAD Asia Business Sentiment survey showed. The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the third quarter from 71 in the second quarter when it reached the highest level in more than a year. An index reading above 50 indicates an overall positive outlook. Some of the weakest readings came from north Asia's economies of China, South Korea and Taiwan, and regional trading hub Singapore, all of which turned in readings of 50 - highlighting the impact of a stuttering global economy. (Reuters)

 China Home Prices Rise For Eighth Straight Month. New home prices rose in 69 of 70 major Chinese cities in August from the previous year, official data showed on Wednesday, the same showing as in July, backing the case for more cooling measures from the government. New home prices in Beijing rose 14.9 percent on year in August, compared with 14.1 percent in July, while prices in Shanghai climbed an annual 15.4 percent for August versus 13.7 percent in July, according to the National Bureau of Statistics. (CNBC)

 Vietnam's Bad Debts Hit 4.58% Of Loans At End-July. Bad debts accounted for 4.58% of total loans by Vietnamese banks at the end of July, an official newspaper reported. Based on commercial banks’ reports, their nonperforming loans totalled 138.98 trillion dong (US$6.58bil) in July, the central bank-run Banking Times newspaper said. The State Bank of Vietnam, the central bank, has yet to report its number on banks’ bad debt as of July. According to the central bank, the bad debt ratio at the end of June was 4.46%. To deal with bad debts, the central bank in July launched an asset firm to buy them from banks, a move touted as one of its biggest reforms but widely seen as a band-aid fix for its ailing, credit-starved economy. (Reuters)

USA

 Fed Refrains From QE Taper, Keeps Bond Buying At $85b. The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs more evidence of lasting improvement in the economy and warning that an increase in interest rates threatened to curb the expansion. “Conditions in the job market today are still far from what all of us would like to see,” Chairman Ben S. Bernanke said at a press conference today in Washington after a two-day meeting of the Federal Open Market Committee. “The committee has concern that rapid tightening of financial conditions in recent months would have the effect of slowing growth.” (Bloomberg)

 Home Starts Weaker Than Forecast As Fed Keeps QE. Builders began work on fewer U.S. homes than projected in August, helping explain why Federal Reserve policy makers decided to maintain stimulus aimed at sustaining the economic expansion. Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated, a Commerce Department report showed today in Washington. The median estimate of 83 economists surveyed by Bloomberg called for 917,000. Permits, a proxy for future projects, dropped more than forecast. (Bloomberg)

 CEO Expectations For U.S. Economy Ease As Headwinds Persist. Fewer chief executive officers in the U.S. project a pickup in sales and capital spending in the next six months as the budget debate in Washington puts hiring plans on hold, a survey showed. The Business Roundtable’s economic outlook index dropped to 79.1 in the third quarter from a one-year high of 84.3 in the previous three months, the Washington-based trade group said today. Measures greater than 50 are consistent with economic expansion. Today’s reading is close to the long-term average of 79.3. (Bloomberg)

Europe

 Bank Of England Upgrades UK Growth Forecast. The Bank of England has upgraded its growth forecast for the UK economy. Minutes from September's meeting of the Bank's Monetary Policy Committee show that third-quarter growth is expected to be 0.7%, up from 0.5% forecast in last month's Inflation Report. The minutes also show that the MPC voted unanimously to keep interest rates and quantitative easing (QE) on hold this month. No MPC members saw a case to expand economic stimulus measures. (BBC)