Malaysia

Broad Money In Circulation Narrowed In November With M3 Posting A 6.7% YoY Growth compared to 7.9% in October. The overall moderation in M3 expansion is the result of lower net claims on the Government and net portfolio outflows throughout the month. Year-to-date, M3 growth expanded at a 6.0% pace compared to 8.3% seen in the same period in 2012. On the other hand, loans growth in November remained at the same pace of 9.9% YoY, a considerable chunk due to the purchase of residential property, a final hurrah before new macro prudential measures to reign in the property sector comes into play in 2014. The overall household sectors loans growth remains steady at 11.9%. (Please refer to Economic Viewpoint for further comments)

Asia

Singapore Growth Quickened In 2013 As Lee Pursues Economic Shift. Singapore’s growth quickened in 2013 and the country is making progress in economic restructuring while strengthening social safety nets, Prime Minister Lee Hsien Loong said. Gross domestic product rose 3.7 % last year, Lee, 61, said in his New Year message released yesterday. That’s in line with the government forecast of 3.5 % to 4 % growth and compares with the median in a Bloomberg News survey of economists for a 3.55 % expansion. The economy grew 1.3 % in 2012. (Bloomberg)

China Manufacturing Index Falls As Xi Grapples With Growth Risks. A Chinese manufacturing gauge slipped to a four-month low in December, underscoring challenges for President Xi Jinping as he tries to sustain economic momentum while rolling out reforms. The Purchasing Managers’ Index was at 51, the National Bureau of Statistics and China’s logistics federation said yesterday in Beijing. That was less than the median 51.2estimate in a Bloomberg News survey of 29 economists and November’s 51.4. A separate manufacturing index is due to be released today by HSBC Holdings Plc and Markit Economics. (Bloomberg)

Xi Says In New Year’s Address China Will Progress On Reform. Xi Jinping, delivering his first New Year’s address as China’s president, said the country must press ahead with reforms in 2014 to improve livelihoods and make the country “rich and strong.” China enters 2014 facing slowing economic growth, rising environmental concerns and higher tensions with Japan over a territorial dispute that has damaged a $366 billion trade relationship. Tackling those challenges will be up to Xi, who as head of the Communist Party, military and state has amassed the greatest individual sway over his nation since former paramount leader Deng Xiaoping. “In 2014 we will make new strides along the path of reform,” Xi said in a speech broadcast on state radio yesterday. “I firmly believe that new glories will be awaiting the Chinese people.” (Bloomberg)

USA

Gain In U.S. Consumer Confidence Lifts Spending Outlook. American consumers turned more confident in December as hiring picked up, brightening the outlook for spending heading into 2014. The Conference Board said its sentiment index climbed to 78.1 from 72 in November, exceeding the median forecast of economists surveyed by Bloomberg and the strongest year-end reading since 2007. Other reports showed home prices climbed at the fastest pace in more than seven years and manufacturing was in a sustained expansion. (Bloomberg)

Home Prices In 20 U.S. Cities Climb By Most In Seven Years. Home prices in 20 U.S. cities rose in October from a year ago by the most in more than seven years, signaling the real-estate rebound will keep bolstering household wealth in 2014. The S&P/Case-Shiller index of property prices in 20 cities climbed 13.6 % from October 2012, the biggest 12-month gain since February 2006, after a 13.3 % increase in the year ended in September, a report from the group showed today in New York. The median projection of 22 economists surveyed by Bloomberg called for a 13.5 % advance. (Bloomberg)

Chicago Business Activity Caps Best Three Months Since 2011. Business activity in the U.S. expanded December, capping the strongest three months in more than two years and adding to signs manufacturing gains will be sustained into 2014. While the MNI Chicago Report business barometer declined to 59.1 from 63 in November, numbers greater than 50 signal expansion. The index averaged 62.7 over the past three months, the highest since the period ended May 2011. Manufacturing, which makes up about 12 % of the economy, has been expanding as demand for automobiles, construction materials and appliances keep factory assembly lines humming. A pickup in business investment and economic improvement overseas would help sustain gains and support economic growth into the new year. (Bloomberg)

Europe

Cameron Pledges 5-Part Plan To Drive Growth As Economy Improves. U.K. Prime Minister David Cameron said 2014 will be the year “in which Britain begins to rise” after a period of financial crisis. The government has a five-part plan to drive the recovery and will focus on cutting the deficit and income taxes, creating new jobs by backing small businesses, capping welfare benefits and curbing immigration, Cameron wrote in the Times today. He also pledged to keep education a priority. The U.K. returned to growth in the first three months of last year after shrinking in the final two quarters of 2012. The economy expanded 0.8 % in the third quarter of 2013. (Bloomberg)

Currencies

Euro Wins, Yen Loses Against Dollar In 2013. The euro netted the biggest gains against the U.S. dollar among major currencies in 2013, a year dominated by expectations of changing monetary policy around the globe. The euro gained 4.3% against the greenback in 2013. In recent trade, the euro edged down to $1.3758 from $1.3800 late Monday. Similarly, the British pound gained 2% against the greenback this year as the Bank of England has kept its balance sheet steady, she said. In recent trade, the pound rose to $1.6560 from $1.6515 late Monday. In recent trade, the dollar rose to ¥105.28 from ¥105.10 late Monday. The Australian dollar also had a losing 2013, surrendering about 14% of its value against the greenback. On Tuesday, the Aussie inched higher to 89.23 U.S. cents from 89.11 U.S. cents. The ICE dollar index , which tracks the greenback against six other major currencies, rose to 80.155 from 80.009 late Monday. (Market Watch)

Commodities

Brent Ends 2013 Nearly Flat, U.S. Crude Up 7 Pct On The Year. Brent crude fell on Tuesday, ending 2013 almost unchanged following a year in which traders balanced a spate of supply disruptions from Middle East and Africa against surging output from the United States. Weighed down by expectations oil shipments from some shuttered Libyan ports would resume soon, Brent finished the year just 31 cents its end-2012 level of $111.11 a barrel. The international benchmark traded in a $22 range from $96.75 to $119.17 this year, the narrowest band since 2006. U.S. crude closed the year 7.2 % firmer as traders headed into 2014 eyeing improving demand, the end of the Federal Reserve's monetary stimulus and the dramatic overhaul of the world's largest oil market caused by the shale revolution. U.S. crude traded within a $27 range throughout 2013, also the narrowest band since 2006. (Reuters)

Gold Notches Biggest Annual Loss In Three Decades. Gold fell to a six-month low in thin year-end trade on Tuesday, notching up its biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets. In choppy trade on Tuesday, spot gold fell 1 % to its lowest since June 28 at $1,184.50 an ounce, before recovering its lost ground. Prices were up 0.38 % at $1,201.13 per ounce at 2:29 p.m. EDT (1929 GMT). Silver was down 1.13 % to $19.43 an ounce. Silver is down 36 % this year in its worst annual performance since at least 1982, making it the worst-performing precious metal in 2013. Spot platinum was up 0.8 % at $1,376.0 an ounce and on course to post an 11 % annual loss. Best-performing palladium rose 0.9 % to $718.10 an ounce and was ending year up 2 %. (Reuters)