Global

 IMF Says Domestic Investors Can Curb Capital Flow Volatility. Emerging markets can better resist capital flow volatility by taking measures to encourage their residents to invest abroad in good times and repatriate the funds when needed, according to a study by the International Monetary Fund. Countries where a surge of capital inflows was offset by domestic residents’ purchase of foreign assets fared better during the global financial crisis as international investors pulled out, the IMF said in a chapter of its World Economic Outlook released today. That showed policy makers have other options than capital controls or currency interventions, it said. (Bloomberg)

Asia

 S. Korea August Output At 9-Month High. South Korea’s industrial output grew at the fastest pace for nine months in August on robust car and mobile phone production, state data showed. Production in the mining, manufacturing, gas and electricity industries rose 1.8% from a month ago, following a revised 0.3% fall in July, according to Statistics Korea. It was the fastest expansion since the 2.1% growth posted in November last year. Compared with a year ago, the August output rose 3.3% – the highest year-on-year gain since January. (AFP)

 China September Manufacturing Index Misses Preliminary Estimate. A Chinese manufacturing index (EC11CHPM) rose less than analysts forecast in September, unexpectedly weakening from a preliminary estimate in a result that casts doubt on the strength of the economy’s rebound. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was less than last week’s 51.2 preliminary reading and the 51.2 median estimate in a Bloomberg News survey. (Bloomberg)

 India Current-Account Gap Below Estimates As Gold Imports Curbed. India’s current-account deficit widened less than economists estimated in the second quarter after the government tightened curbs on gold imports to tackle a shortfall that’s weighed on the rupee. The deficit was $21.8 billion in April through June, compared with $18.1 billion in the previous quarter, the Reserve Bank of India said in a statement in Mumbai yesterday. The median of 26 estimates in a Bloomberg News survey was for a $23 billion gap. The current account is the broadest measure of trade, tracking goods, services and investment income. (Bloomberg)

North America

 US Government Shutdown Nearer As House Republicans Huddle. The U.S. Congress headed into the final hours before the first partial government shutdown in 17 years with neither side budging or negotiating before a midnight deadline. House Republicans, led by Speaker John Boehner, plan to meet at 2 p.m. in the Capitol basement to plan their next move. The House is urging the Senate to link a delay of the 2010 Affordable Care Act to a short-term extension of government funding. Senate Democrats, who are also meeting today, plan to strip that language, leaving the House only a few hours to act. President Barack Obama said he’s “not at all resigned” to a shutdown and will speak with congressional leaders today. (Bloomberg)

 Canadian Consumer Confidence At Highest Since 2011. Canadian consumer sentiment climbed to the highest in more than two years as employment rose and the housing market remained buoyant, according to the new Bloomberg Nanos Canadian Confidence Index. The index, a weekly measurement of the economic mood of Canadians, rose to 59.75 in the period ended Sept. 27, from 59.23 the previous week. That’s the highest since March 2011 for the index, which tracks consumers’ perceptions of the strength of the economy, job security, real estate and their financial situation. The data reflect recent improvement in economic reports. Job security among Canadians rose this month after Statistics Canada reported Sept. 6 that the economy added 59,200 jobs in August, the second highest total this year. (Bloomberg)

Europe

 Eurozone Inflation Falls To Lowest Rate In Three Years. Eurozone inflation is running at its lowest rate in more than three years. Consumer price inflation fell to an annual rate of 1.1% in September from 1.3% in August according to Europe's statistics agency Eurostat. A fall in energy prices helped to ease inflation. Price rises in food, alcohol and tobacco moderated, also helping. Economists say slowing inflation gives the European Central Bank (ECB) more freedom to help the eurozone's weak economic recovery. The ECB targets an annual inflation rate of below, but close to 2%. (BBC)

Currencies

 Dollar Posts Biggest Quarterly Decline In 2 Years. The dollar edged lower against some rivals Monday, netting the largest quarterly decline in two years, as investors braced for a shutdown of the U.S. government. The British pound rose to $1.6185 from $1.6140 late Friday, while the euro was little changed at $1.3524 versus $1.3520. The ICE dollar index, a gauge of the greenback against six rivals, edged down to 80.237 in recent trade from 80.260 late Friday. The greenback erased earlier losses to trade the Japanese Yen at ¥98.26 versus ¥98.23 late Friday. Meanwhile, the Australian dollar edged up to 93.26 U.S. cents from 93.15 U.S. cents. (Market Watch)

Source: Kenanga