Global

 IMF Cuts Growth Forecast For Emerging World. The International Monetary Fund (IMF) sliced its growth expectations for emerging countries on Tuesday, but maintained its forecast for advanced economies. In its latest world outlook report, the IMF predicted emerging countries would average growth of 4.5 % year-on-year in 2013, down from an estimate of 5.0 % growth three months earlier. It also cut its outlook for emerging world growth in 2014, to 5.1 %. Meanwhile, the international body held its growth estimate for developed countries — including the euro area, the U.S., the U.K., Japan and Canada — at 1.2 % in 2013 and 2.0 % in 2014. "Real GDP (gross domestic product) growth has disappointed in the emerging market and developing economies, while it has been broadly in line with projections in advanced economies. The reasons for the weaker growth differ across emerging market and developing economies and may include tightening capacity constraints, stabilizing or falling commodity prices, less policy support and slowing credit after a period of rapid financial deepening," the IMF said in the report. (CNBC)

 World Bank Planning To Trim US$400m From Budget. The World Bank plans to cut US$400 million from its budget as part of a sweeping reorganisation to make the global development lender more efficient and responsive, its chief financial officer said on Monday. The savings, which have not yet been publicly disclosed, are part of the World Bank's first major strategic realignment in 17 years. The US$400 million figure will be presented to the World Bank's member countries later this week during its annual meetings, along with a new strategy to focus the institution on its poverty-fighting goals. (Reuters)

USA

 Obama: Republicans Using 'Extortion' On Debt Limit. US President Obama has said he is willing to hold budget talks with Republicans, but not until they agree to lift "threats" against the economy. Mr Obama said they were committing "extortion" by demanding policy concessions in return for raising the US debt limit and reopening government. The US government shut down last week when Congress failed to agree a budget. Republican leaders on Tuesday reiterated calls for Mr Obama to open negotiations over ending the impasses. (BBC)

Europe

 IMF Raises UK Forecast. The International Monetary Fund (IMF) has trimmed its forecast for global economic growth at the same time as lifting its UK growth projection. The forecast for UK growth this year received a significant upgrade to 1.4%, up from July's estimate of 0.9%. And for next year the IMF expects UK growth of 1.9%, up from July's projection of 1.5%. The IMF's upgrades for its outlook on the UK are larger than those it made for any other country in its World Economic Outlook - its twice-yearly assessment of the global economy. It credited recent data indicating higher consumer and business confidence, for the increase. However, it warned that it would still take years for the UK economy to recover fully from the 2008 financial crisis. (BBC)

 Greece Sees Economy Growing, Finally. Greece expects its economy to grow next year - at last. In its draft budget presented on Monday, the government forecast the economy would grow 0.6 per cent next year, its first annual increase since 2007. This year it is predicted to shrink four per cent, leaving the economy 25 per cent smaller than when it first slid into recession in 2008 during the global financial crisis. The government even expects some jobs growth and a continued mprovement in the state of the country's public finances. (AP)

 German Factory Orders Unexpectedly Fall On Weak Recovery. German factory orders (GRIORTMM) unexpectedly fell in August, backing up the European Central Bank’s view that the economic recovery in the euro area is fragile. Orders, adjusted for seasonal swings and inflation, dropped 0.3 % from July, when they fell a revised 1.9 %, the Economy Ministry said today in an e-mailed statement. Economists forecast an increase of 1.1 % in August, according to the median of 40 estimates in a Bloomberg News survey. Orders climbed 3.1 % from a year ago, when adjusted for the number of working days. (Bloomberg)

 Serbia: Lazar Krstic Outlines New Austerity Reforms. Serbia has announced plans to cut public sector wages by as much as a quarter, as part of wide-ranging austerity measures. The reform package also includes raising taxes and slashing subsidies for loss-making companies. Finance Minister Lazar Krstic said Serbia would be bankrupt within two years if it did not take action now. The country is mired in a deep recession, with 25% of the workforce unemployed. (BBC)

 Slovenia May Seek Help For Its Faltering Banks. The head of Slovenia's central bank, Bostjan Jazbec, has said it will consider asking for outside help if the country's funding costs stay high. He also said Slovenia's GDP would shrink by 2.6% this year, more than April's 1.9% forecast. Slovenia's banks are largely state-owned and saddled with bad loans worth 22.5% of its GDP. Mr Jazbec's comments are likely to fuel speculation over whether Slovenia will be bailed out by the EU. (BBC)

Currencies

 U.S. Dollar Edges Higher Against Japanese Yen. The U.S. dollar rebounded slightly against safe-haven currencies such as the Japanese yen and Swiss franc on Tuesday, but foreign-exchange action was muted as investors stayed focused on the budget stalemate in Washington. The dollar edged up to ¥96.89 from ¥96.77 late Monday, when it touched the lowest level in nearly two months against the Japanese currency. The dollar rose slightly to 0.9037 Swiss franc from 0.9030 franc in the prior session. The ICE dollar index, which tracks the greenback against a basket of other major currencies, was at 79.999 versus 79.933 late Monday. The euro was marginally weaker at $1.3575 from $1.3577 late Monday and the British pound was at $1.6082, slightly down from $1.6091. The Australian dollar edged up to 94.33 U.S. cents from 94.27 U.S. cents late Monday. (Market Watch)

Commodities

 Oil Rises On Geopolitical Risk, U.S. Debt Uncertainty. Crude oil prices on both sides of the Atlantic gained on Tuesday as geopolitical risk crept back into the markets, even as the dollar index turned positive after a mid-morning phone call between U.S. President Barack Obama and U.S. House Speaker John Boehner over the budget crisis. Brent rose 48 cents to settle at $110.16 a barrel, after earlier posting gains of over $1. U.S. oil rose 46 cents to $103.49, after earlier gaining over $1. U.S. crude has traded largely between $102 and $109 since early July. (Reuters)

 Gold Eases On Profit Taking, U.S. Budget Impasse In Focus. Gold prices eased on Tuesday as investors took profits, but losses were limited as growing uncertainty about the U.S. budget impasse and a looming deadline to raise the U.S. debt ceiling bolstered bullion's safe-haven appeal. Spot gold fell 0.2 percent to $1,319.10 an ounce by 3:43 p.m. EDT (1943 GMT).Among other precious metals, silver eased 0.1 % to $22.29 an ounce. Platinum gained 0.6 % to $1,399.99 an ounce on fears that mine strikes in South Africa could hurt supply. Palladium rose 1.3 % to $710.37 an ounce. (Reuters) 

Source: Kenanga