Malaysia

Inflation In The Month Of February Edged Up By 3.5% YoY, higher than market expectation of 3.4% (but spot on with ours), due to continued pressures from an increase in the electricity tariff and the implementation of the minimum wage. This is the highest level seen since March 2009. The core inflation (minus food and beverages) increased by 3.3%, the highest rate seen since November 2008. On a monthly comparison, the CPI rate rose by 0.3% MoM. For the first two months of the year, inflation averaged at 3.5%. (Please refer to Economic Viewpoint for further comments)

RM424.2bil Reserves. Bank Negara’s international reserves stood at RM424.2bil as of March 14, 2014. In a statement yesterday, the central bank said the reserves’ position was sufficient to finance 8.9 months of retained imports and was 3.3 times the short-term external debt. “The main components of the international reserves are foreign currency reserves (US$116.6bil), International Monetary Fund reserves (US$900mil), Special Drawing Rights (US$2bil), gold (US$1.4bil) and other reserve assets (US$8.7bil),” it said. (Bernama)

USA

Fitch Ratings Takes Us Off Negative Ratings Watch. Fitch Ratings on Friday affirmed U.S. long-term foreign and local currency credit ratings at 'AAA' with a stable outlook, taking the country off negative ratings watch. In a statement, Fitch said its action resolves the Rating Watch Negative it placed the ratings under last October amid an impasse in U.S. debt ceiling negotiations that raised the risk of a default. "The federal debt limit was suspended in mid-February in a timely manner and in a way that avoided casting uncertainty over the full faith and credit of the U.S., in contrast to the crises in August 2011 and October 2013," the ratings agency said. (CNBC)

Treasury 2-Year Notes Plunge As Yellen Spurs Rate-Rise Concern. Treasury two-year notes tumbled, sending yields up the most in nine months, after Federal Reserve Chair Janet Yellen’s timetable for higher interest rates sent financial markets reeling. Treasuries also fell this week as Russia completed the process of annexing Crimea and Ukraine withdrew its military forces from the Black Sea region. The two-year note yield rose eight basis points, or 0.08 percentage point, to 0.42 % this week in New York, according to Bloomberg Bond Trader prices, the largest weekly climb since the five days through June 21. It touched 0.44 %, the highest level since Sept. 13. Benchmark 10-year yields increased nine basis points to 2.74 %, after dropping 13 basis points last week. The 2.75 % note due in February 2024 fell 3/4, or $7.50 per $1,000 face amount, to 100 1/32 this week. (Bloomberg)

Europe

Ukraine Crisis Gives New Impetus To EU-U.S. Trade Talks, U.S. Says. Russia's annexation of Crimea underlines the need for the United States and the European Union to deepen their economic ties via an ambitious trade deal that would also allow Europe to import U.S. gas, Washington's top trade official said on Saturday. Days before U.S. President Barack Obama and EU officials hold a summit in Brussels, U.S. Trade Representative Michael Froman said the rationale "could never be stronger" for a U.S.-EU free-trade pact, despite growing public hostility to it. "Recent developments just underscore the importance of the transatlantic relationship. "From both a strategic and economic perspective, the rationale for the T-TIP could never be stronger," he said, referring to the proposed accord's official name, the Transatlantic Trade and Investment Partnership. (Reuters)

Currencies

Dollar Falls, But Notches Weekly Rise Post-Fed. The U.S. dollar edged lower against the Japanese yen and euro Friday, but notched a weekly gain as traders continued to focus on a Federal Reserve meeting that left markets  anticipating earlier policy rate hikes than initially expected. Against the yen, the dollar slipped to ¥102.15 from ¥102.39 late Thursday, but gained 0.9% this week. The euro rose to $1.3796, from $1.3781 Thursday. Nonetheless, it fell 0.9% on the week. The ICE dollar index, which measures the greenback against a collection of its rivals, was down at 80.089, versus 80.187 in the prior session. (Market Watch)

Commodities

Crude Oil Futures Rise On Fears Over Sanctions Against Russia. Crude oil futures rose on Friday as fresh U.S. and European sanctions on Russia renewed fears of a supply disruption from the world's second largest oil producer. Brent rose 47 to settle at $106.92 per barrel, having earlier spiked $1.32 to a session high of $107.77 per barrel. The European benchmark still fell for a fourth week in a row. U.S. crude for May delivery, which became the front-month contract on Friday, settled 56 cents higher at $99.46 per barrel, rising modestly after falling for the week prior. (Reuters)

Gold Up Yet Posts Big Weekly Drop On Fed Worries. Gold rose on Friday on bargain hunting, though the market posted its biggest weekly drop since November following the Federal Reserve's latest indication that an interest rate hike could come in early 2015. Spot gold was up 0.5 % to $1,334.76 an ounce by 2:32 p.m. EST (1832 GMT), after falling to $1,320.24 on Thursday, its weakest since end-February. In other precious metals, silver rose 0.3 % to $20.29 an ounce and platinum gained 0.1 % to $1,427.70 an ounce. Palladium rose as much as 4.5 % to $797.00 an ounce, its highest since August 2011. It was last trading up 3 % at $785.59. (Reuters)