Global

IMF Head Warns US Debt Crisis Threatens World Economy. IMF managing director Christine Lagarde says failure to raise the US debt ceiling would be a far worse threat to the global economy than the current shutdown. The shutdown is due to a budget standoff between President Barack Obama and Congress. But a worse problem looms: the US will run out of money if there is no agreement to raise the borrowing limit. Ms Lagarde's comments were echoed by the US Treasury. It says a debt default could lead to a financial crisis as bad as 2008 or worse. (BBC)

Malaysia

Malaysia Approves 428 Manufacturing Projects, RM28.3bil Investments. Malaysia approved 428 manufacturing projects where investments of RM28.3bil were approved in January-July of 2013. The Malaysian Industrial Development Authority (MIDA) said on Thursday of the RM28.3bil in investments of which RM18.2bil (64.3%) were foreign investments and RM10.1bil (35.7%) domestic. "Malaysia remains a competitive investment location and continues to attract manufacturing projects with significant levels of investments," it said. MIDA said in terms of value, Johor received the largest amount in approved investments in the manufacturing sectorduring the January-July period at (RM8.7bil), followed by Sarawak (RM5.6bil), Malacca (RM2.9bil), Sabah (RM2.8bil) and Selangor (RM2.6bil). (The Star)

Asia

China Official Services PMI Hits Six-Month High, Supported Third-Quarter Pickup. Activity in China's services sector expanded at the fastest pace in six months in September as demand grew, cementing a modest pickup in the world's second-largest economy. The official purchasing managers' index (PMI) for the non-manufacturing sector rose to 55.4 in September - the highest reading since March - from 53.9 in August, the National Bureau of Statistics (NBS) said on Thursday. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing. (Reuters)

USA

Service Industries In U.S. Grow At Slower Pace Than Forecast. Service industries in the U.S. expanded in September at a slower pace than forecast, indicating a pause in the momentum of the biggest part of the economy before the federal government shut down. The Institute for Supply Management’s non-manufacturing index dropped to 54.4 from the prior month’s 58.6, the biggest decrease since November 2008, the Tempe, Arizona-based group said today. A gauge above 50 shows expansion. The median estimate in a Bloomberg survey of economists was 57. (Bloomberg)

Jobless Claims In U.S. Rose Less Than Forecast Last Week. Fewer Americans than forecast filed applications for unemployment benefits last week, indicating U.S. employers were maintaining staff counts in the days leading up to the government shutdown. Jobless claims rose by 1,000 to 308,000 in the week ended Sept. 28, from a revised 307,000, a Labor Department report showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a rise to 315,000. Continuing claims jumped as California worked through its backlog of applications following a change in computer systems. (Bloomberg)

Europe

Recovery In Euro Zone Services Sector Picks Up In September: PMI. The nascent recovery in euro zone businesses strengthened in September as order books filled at a faster rate and layoffs slowed to a trickle, surveys showed on Thursday, pointing to very mild growth in the third quarter. Markit's Euro zone Services Purchasing Managers Index (PMI), a monthly survey of businesses, rose to 52.2 in September from August's 50.7, little changed from a preliminary reading of 52.1. Readings above 50 signify growth. (Reuters)

UK Services Growth Reaches 16-Year High. Activity in the UK services sector grew at its fastest pace since 1997 in the third quarter of the year, a closely-watched survey has indicated. The Markit/CIPS PMI services index said the rise was due to growth in financial services, bolstered by the housing market, and the business sector. The survey raises hopes that the economy as a whole saw strong growth in the July-to-September period. The PMI survey showed services continued to grow strongly last month. The activity index for the sector recorded 60.3 in September, which was marginally down from August's near seven-year high of 60.5. Any score above 50 indicates growth. (BBC)

Portugal Passes Latest Eurozone Bailout Test. Representatives from the International Monetary Fund, the European Commission and the European Central Bank have approved Portugal's economic progress. A programme of cuts and reforms was promised by Portugal's leaders in return for its May 2011 bailout. The latest visit from the so-called troika means the next instalment of bailout funds will be granted. But the government has been unable to persuade the lenders to ease the target for next year's budget deficit. "The programme remains broadly on track," the troika said in a statement. (BBC)

Currencies

Dollar Falls To Eight-Month Low Against Euro. The dollar hit an eight-month low against the euro on Thursday as investors grew more concerned about the economic effects of a prolonged shutdown and debt-ceiling debate. The euro jumped to $1.3619 from $1.3585 late Wednesday. That’s the highest level since the euro’s 2013 closing high of $1.3638, set on Feb. 1, according to FactSet data. The ICE dollar index, a measure of the greenback’s strength against six other currencies, fell to 79.755 from 79.875 late Wednesday, on track to decline for the fifth straight session. The U.S. dollar fell to 97.24 Japanese yen from ¥97.38 in the prior session, hitting the lowest level in more than a month on concerns about the debt limit. The British pound fell to $1.6158 from $1.6229 in the prior session. The Australian dollar rose to 94.00 U.S. cents from 93.80 U.S. cents late Wednesday. (Market Watch)

Commodities

Brent Slips Below $109 As U.S. Shutdown Drags On, Stocks Build. Brent futures slipped below $109 a barrel on Thursday, after posting their biggest gain in two weeks in the previous session, on worries a prolonged U.S. government shutdown would hurt demand in the world's biggest oil consumer. Brent crude slipped 24 cents to $108.95 by 0444 GMT, after settling $1.25 higher. U.S. oil fell 36 cents to $103.74, after ending $2.06 higher. (Reuters)

Gold Gains On U.S. Shutdown, Soft Service Sector Data. Gold rose on Thursday after softer U.S. services sector data raised expectations that the Federal Reserve would delay any reduction in economic stimulus, especially with September employment data delayed by the U.S. government shutdown. Spot gold steadied around 0.17 % higher at $1,316.89 an ounce by 4:12 EDT (2012 GMT), having trimmed early losses. Silver fell 0.46 % to $21.61 an ounce after rising 2.8 % on Wednesday, its biggest one-day gain in two weeks. Spot platinum was down 1.41 % to $1,368.99 an ounce and spot palladium dropped 2.34 % to $699.22 an ounce. (Reuters)

Source: Kenanga