Malaysia

 Govt Aims To Cut Nation's Uncollected Taxes By Half. The Government will be taking various measures to reduce the country’s uncollected taxes known as the “black economy” from the current 30% to 15% by 2020. Deputy Finance Minister Datuk Ahmad Maslan said the black economy was essentially the portion of a nation’s taxes that remained undeclared due to illegal activities or tax avoidance. “Most developed countries record about 15% of loss in income due to the black economy. “We currently stand at 30% and we hope to reduce this %age with the introduction of the goods and services tax and easier methods for tax payment such as the e-filing,” he told reporters after conducting an official visit to the state Customs Department headquarters yesterday. (The Star)

Asia

 Thailand Cuts Growth Outlook. Thailand cut its growth outlook this year and said policy would stay supportive as poor manufacturing output suggested South-East Asia’s second-largest economy may struggle to emerge from recession. The fifth straight month of contraction in manufacturing output, worst than the market had expected, has fanned debate on when the economy can pull out of a downturn. Thailand is grappling with a current account deficit and capital outflow pressures ahead of a tapering in US monetary stimulus. Thailand’s finance ministry yesterday cut the outlook on growth for 2013 to 3.7% from 4.5% projected in June due to weak exports and slower domestic demand. (Reuters)

 China C.Bank To Keep Policy Steady, Push Reforms. China's central bank said on Sunday that it would keep policy steady with timely fine-tuning to cope with economic uncertainties while forging ahead with yuan and interest rate reforms. China's economic performance and inflation remained stable but there would be "difficulties and challenges" ahead, the People's Bank of China said in a statement after a regular meeting of its monetary policy committee. While maintaining prudent monetary policy, the central bank will make pre-emptive and timely policy fine-tuning to help stabilise economic growth, it said. (Reuters)

 Shanghai Free-Trade Zone Launched. A free-trade zone in Shanghai, China's economic hub, has been launched as the world's second-biggest economy prepares to test long-awaited economic reforms. Commerce Minister Gao Hucheng attended the opening ceremony for the zone, which covers 29 sq km (11 sq miles). Mr Gao said the zone would help "implement a more active opening-up strategy". Restrictions on foreign investment will be eased inside the area and interest rates will be set by markets. Among other measures to be trialled inside the zone are allowing China's heavily-regulated currency, the yuan, to be swapped freely for other currencies, China's State Council said on Friday. (BBC)

USA

 Consumer Spending In U.S. Climbs 0.3% As Incomes Pick Up. Consumer spending in the U.S. rose in August for a fourth consecutive month as a pickup in incomes supported the biggest part of the economy. Household purchases, which account for about 70 % of the economy, climbed 0.3 % after a revised 0.2 % advance in July that was more than previously estimated, the Commerce Department reported today in Washington. The advance in August matched the median forecast of economists in a Bloomberg survey. Incomes rose 0.4 %, the most in six months. Disposable income, the money left over after taxes, rose 0.3 % after adjusting for inflation, the most in five months. It increased 0.2 % in July. (Bloomberg)

 US Shutdown Looms Amid Political Rifts Over Health Law. The US government has less than 48 hours to avert a shutdown of government services amid political divisions over President Obama's healthcare law. On Sunday, the Republican-run House of Representatives voted to pull the law's funding, raising chances of a shutdown. The government needs to agree a new policy-wide spending bill before the US fiscal year ends at midnight on Monday. If it fails, non-essential federal services face closure, with employees sidelined or left working without pay. (BBC)

Europe

 German Inflation Remains Unchanged At Three-Month Low. German inflation was unchanged at the lowest rate in three months in September, helping bolster domestic consumption in Europe’s largest economy. Annual consumer-price growth, calculated using a harmonized European Union method, was 1.6 %, the Federal Statistics Office in Wiesbaden said today. That’s in line with the median estimate of 22 economists in a Bloomberg News survey. It also matches August’s rate of 1.6 %, which was the lowest since May. Prices were unchanged from the previous month. (Bloomberg)

 Italian Government Bonds Drop On Political Tensions. Italian bonds dropped, with 10-year yields posting the biggest weekly increase in more than a month, as political tension that threatened the survival of the coalition government deterred buyers. Price declines yesterday pushed the yield to the highest level since Sept. 17. Former premier Silvio Berlusconi’s allies this week threatened to step down from the coalition if he is expelled from the Senate after his conviction for tax fraud. German bund yields fell by the most since July 2012 as European Central Bank officials signaled that monetary policy will stay expansionary to support the recovery. Italy’s 10-year yield climbed 13 basis points, or 0.13 %age point, this week to 4.42 % at 5 p.m. London time yesterday, the biggest increase since the period ended Aug. 23. The 4.5 % bond maturing in May 2023 fell 0.995, or 9.95 euros per 1,000-euro ($1,354) face amount, to 101.01. (Bloomberg)

 IMF And EU Mission To Greece Takes Breather After Progress. Greece's international lenders called a temporary halt to their latest mission to Athens on Sunday, saying they had made good progress and expected to resume talks with the government soon. The pause in talks between the two sides had already been flagged at the end of the first week of work by the inspectors, who are seeking to determine the size of a third bailout for Greece and what Athens will have to do for it. "To allow completion of technical work, policy discussions in Athens will pause, and are expected to resume in the coming weeks. In the meantime, contacts will continue between staff and the Greek authorities," the European Union, International Monetary Fund, and European Central Bank said in a joint statement. (Reuters)

Currencies

 Dollar Slides On Budget Fears; Carney Lifts Pound. The dollar fell Friday on worries about a looming U.S. government shutdown and concerns about when the Federal Reserve will pare its bond-buying program. The ICE dollar index, which measures the greenback against a basket of six other currencies, fell to 80.260 from 80.535 late Thursday. The dollar also fell against the Japanese yen, buying ¥98.23, down from ¥98.85. The Australian dollar slipped to 93.15 U.S. cents from 93.50 U.S. cents on Thursday. The euro rose to $1.3520 from $1.3483. Meanwhile, the pound rose after Bank of England Governor Mark Carney told a local U.K. newspaper that he saw no need for further bond buying to spur the U.K. economy. The U.K. currency traded at $1.6140, up from $1.6039 late Thursday, and remained around there as U.S. markets opened. (Market Watch)

Commodities

 Crude Ends Session On A Weak Note, Extending Recent Losses. Brent crude oil fell in volatile trading on Friday, on track for its third straight weekly loss as diplomatic strides on Iran's nuclear program and Syria's chemical weapons drained geopolitical risk premium from the markets. Brent crude for November delivery traded down 50 cents around $109 a barrel. U.S. crude for delivery in November settled down 16 cents at $102.87 a barrel. (Reuters)

 Gold Rallies 1 Pct On U.S. Fiscal Worries. Gold jumped more than 1 % on Friday as wrangling over the U.S. budget and jitters over the outlook for Federal Reserve policy stoked buying interest, with buying accelerating sharply on a break of a key chart level. Spot gold was at $1,337.90 an ounce at 1424 GMT, up 1.1 %, while U.S. gold futures for December delivery were up $14.30 an ounce at $1,338.40. Silver was up 0.7 % at $21.78 an ounce, tracking gold. Spot platinum was up 0.8 % at $1,416.24 an ounce, while spot palladium was up 0.5 % at $721.84 an ounce. (Reuters)

Source: Kenanga