Malaysia

Inflation For The Final Month Of 2013 Edged Up By 3.2% Annually, mainly on higher prices of food and beverage as well as continued adjustment to increased fuel prices. Though this is higher than consensus estimate of 3.1% and ours of 3.0%, the full-year inflation average is spot on with our estimate of 2.1%, compared to 1.7% in 2012. On a monthly comparison, the CPI rate increased by 0.3% MoM. The core inflation (minus food and beverages) rose by 2.6% YoY, following a 2.5% increase in the October but had no increases when compared to the previous month. For the whole of 2013, core inflation rate averaged at 1.4%. (Please refer to Economic Viewpoint for further comments)

Malaysia Vehicle Sales Up 4.5% To 655,793 In 2013. The Malaysian Automotive Association (MAA) says total industry volume (TIV) for 2013 rose 4.5% to 655,793 units and it expects volume to reach 670,000 in 2014. It said on Wednesday the TIV was above the 2012 sales record of 627,753 units. Sales for 2013 also outperformed the MAA's 2012 TIV forecast of 640,000. MAA said the TIV achieved in 2013 was the fourth consecutive year in a row when it exceeded the 600,000 mark. On the outlook for January 2014, MAA expected the sales volume to be maintained at the December 2013 level due to the continuation of the aggressive promotional campaigns and rush for delivery in conjunction with the Chinese New Year celebrations. (The Star)

Asia Pacific

Thailand Unexpectedly Holds Rate After Emergency Declared. Thailand unexpectedly held its key interest rate, even as it cut its economic growth forecast after Prime Minister Yingluck Shinawatra yesterday declared a state of emergency in Bangkok to control anti-government protests. The Bank of Thailand kept its one-day bond repurchase rate unchanged at 2.25 %, with monetary policy committee members voting four-to-three in favor of the decision, it said in Nakhon Pathom province today. Seven out of 21 economists in a Bloomberg survey predicted the outcome, while the remainder expected the rate to be cut by a quarter of a percentage point. (Bloomberg)

Bank Of Japan Sticks To Record Easing As Inflation Picks Up. The Bank of Japan refrained from boosting unprecedented easing as accelerating inflation marks progress in its bid to stamp out 15 years of falling prices in Asia’s second-biggest economy. Governor Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base by an annual 60 trillion to 70 trillion yen ($671 billion) today after a two-day meeting in Tokyo, in line with the forecasts of all 36 economists surveyed by Bloomberg News. The BOJ maintained its projection that core consumer prices will rise 1.9 % in the year starting April 2015, excluding the effect of sales-tax increases, and scrapped a reference to the economy facing “uncertainty.” (Bloomberg)

Australian Inflation Accelerates Above RBA’s Midpoint. Australian inflation unexpectedly accelerated above the midpoint of the central bank’s target range last quarter, reducing scope for policy makers to lower interest rates further. The trimmed mean gauge of core prices rose 2.6 % in the three months through December from 12 months earlier, the Bureau of Statistics said in Sydney today, compared with the median forecast of 23 economists for a 2.3 % gain. The consumer price index advanced 2.7 %, compared with economists’ forecast for a 2.4 % increase. (Bloomberg)

North America

Canada Keeps 1% Lending Rate As Dollar Falls. The Bank of Canada kept its main interest rate unchanged and said the strength of the country’s dollar is hurting exporters, sending the currency to four-year lows. Policy makers kept the benchmark rate on overnight loans between commercial banks at 1 %, where it’s been since September 2010, as expected by all 21 economists in a Bloomberg News survey. Governor Stephen Poloz said his next interest rate move depends on how economic data change the balance of risks to the world’s 11th-largest economy. (Bloomberg)

Europe

UK Unemployment Rate Drops To 7.1%. The UK unemployment rate has dropped to 7.1%, close to the point at which the Bank of England has said it will consider raising interest rates. The number of people out of work fell by 167,000 to 2.32 million in the three months to November, the Office for National Statistics (ONS) said. The ONS also said the number of people claiming Jobseeker's Allowance fell by 24,000 to 1.25 million in December. (BBC)

China And UK Trade At 'Record High'. Bilateral trade between China and the United Kingdom hit a "record high" in 2013, according to the Chinese ambassador to the UK, Liu Xiaoming. The state-owned Xinhua news agency quoted Mr Liu as saying that bi-lateral trade between the two surpassed $70bn last year. He said the UK's exports to China grew more than other EU countries. The UK has been pushing to boost trade ties with Beijing in an attempt to tap into China's domestic market. (BBC)

Currencies

Dollar Surges Against Loonie After BOC Statement. The U.S. dollar surged against the Canadian dollar Wednesday after the Bank of Canada left interest rates on hold and stressed that inflation could be weaker than expected. The dollar jumped to 1.1085 Canadian dollars from 1.0977 Canadian dollars late Tuesday. The ICE dollar index, a gauge of the greenback’s strength against six rivals, rose to 81.185 from 81.102 late Tuesday. The British pound increased to $1.6576 from $1.6473 late Tuesday after the U.K. unemployment rate dropped to 7.1% in the three months to November. The Australian dollar rose to 88.52 U.S. cents from 88.11 U.S. cents late Tuesday after the country’s latest inflation reading slightly lowered expectations for an interest-rate cut. The dollar was strengthened slightly to ¥104.48 from ¥104.34 late Tuesday. The euro fetched $1.3548, down from $1.3561 late in the prior session (MarketWatch)

Commodities

Brent Rises Above $107 As Outlook For Demand Growth Improves. Brent futures rose above $107 a barrel on Wednesday as outlook reports indicated global oil demand will rise more quickly this year as economic growth in industrialised countries accelerates. Brent crude increased 34 cents to $107.07 a barrel by 0316 GMT. On Tuesday, Brent hit a nearly two-week high of 108 and ended 38 cents up. U.S. oil was up 45 cents to $95.42 a barrel, after earlier touching its highest in more than two weeks at $95.49. (Reuters)

Gold Drops On Technical Weakness, Dollar; Fed Eyed. Gold prices fell on Wednesday, extending the previous session's 1 % pullback, due to technical weakness and strength in the dollar. Spot gold fell 0.4 % to $1,235.80 per ounce on the day by 4:15 p.m. EST (2115 GMT). Silver fell 0.6 % to $19.73 per ounce, while palladium inched up 7 cents to $743.97. Platinum was up 0.3 % at $1,452.74, consolidating after hitting a three-month peak recently as strikes were set to begin on Thursday at the South African mines of top producers. (Reuters)