Malaysia

Moody's: Malaysia Can Weather External Financial Shocks. Malaysia’s strong external position and large pool of domestic savings will limit the country’s vulnerability to external financial shocks, according to Moody’s Investors Service Inc. However, it noted that net portfolio inflows into the country from 2010 to 2012 had surpassed the accumulated total of the previous decade and represented a vulnerability should there be a sudden stop or reversal of these flows. The report titled “Malaysia: Favourable Debt Structure, Minimal Currency Risks Mitigates High Public Indebtedness” also noted that Malaysia’s fiscal deficit continued to be wider than A-rated peers. (The Star)

Asia

Bank Of England Agrees Chinese London Currency Clearing Hub. The Bank of England has agreed a deal with the People's Bank of China to make London a hub for Chinese currency dealing. The memorandum of understanding, to be signed on Monday, sets out settlement and clearing arrangements for the renminbi, or yuan, in London. The signing is expected to be followed by the appointment of a London clearing bank for yuan. 62% of yuan payments outside of China already take place in London. Following an agreement with Beijing last year London asset managers are the only ones in the West able to invest directly in Chinese stocks and shares in yuan. (BBC)

USA

US Services, Private Sector Growth Accelerate In March. U.S. private sector economic activity growth accelerated in March at a faster clip than in February as the services sector picked up, even as business creation showed warning signs, an industry report showed on Wednesday. Financial data firm Markit said its "flash" composite Purchasing Managers Index (PMI), a weighted average of its manufacturing and services indexes, hit 55.8 in March, up from 54.1 in February. The preliminary reading on the services sector rose to 55.5 this month from February's 53.3, more than offsetting a decline in the growth rate in the manufacturing sector reported on Monday. A reading above 50 signals expansion in economic activity. (Reuters)

Capital-Goods Orders Signal Slower U.S. Investment. American factories received fewer orders for machinery, communications gear and computers in February, signaling business investment is slowing after an unusually harsh winter put a damper on sales. Bookings for non-military capital goods excluding aircraft fell 1.3 % after a 0.8 % gain in January that was smaller than initially reported, data from the Commerce Department showed today in Washington. The category, which is part of the durable goods report, is considered a proxy for the corporate-spending prospects. (Bloomberg)

Europe

Ukraine Agrees To 50% Gas Price Hike Amid IMF Talks. Ukraine's interim government says it will raise gas prices for domestic consumers by 50% in an effort to secure an International Monetary Fund (IMF) aid package. An official at Ukraine's Naftogaz state energy company said the price rise would take effect on 1 May, and further rises would be scheduled until 2018. Ukrainians are accustomed to buying gas at heavily subsidised rates. But the IMF has made subsidy reform a condition of its deal. (BBC)

Obama To EU: Cut Reliance On Russian Gas. President Barack Obama told the European Union on Wednesday it cannot rely on the United States alone to reduce its dependency on Russian energy, as relations with Moscow chill over its seizure of Crimea from Ukraine. During a visit to Brussels to discuss trade relations and the Ukraine crisis, Obama said concluding a new trans-Atlantic trade pact, now under negotiation, would make it easier for Washington to license more gas exports. The EU relies on Russia for about a third of its oil and gas, and tensions with Moscow have heightened concerns among its 28 members about the security of their energy supplies. Some 40 % of that gas is shipped through Ukraine. (Reuters)

World Bank Warns Of Contraction In Russia. Russia’s economy could contract by 1.8% in gross domestic product (GDP) terms this year if the crisis following Moscow’s annexation of Ukraine’s Crimea deepens, according to the World Bank. ”We assume that political risks will be prominent in the short term,” the bank said in a report on the Russian economy yesterday. ”If the Russia-Ukraine conflict escalates, uncertainty could rise around sanctions from the West and Russia’s response to them.” Yet, the bank said, its high risk forecast of a 1.8% contraction assumes that the international community would still refrain from trade sanctions. The bank also provided a low risk growth scenario for this year, which assumes a short-lived impact from the crisis, with GDP growth of 1.1%. (Reuters)

Currencies

Euro Down Vs. Dollar As ECB Officials Talk Stimulus. The euro was under pressure against the U.S. dollar

Wednesday, dragged lower as European monetary policy officials indicated willingness toward supporting more stimulus measures to aid the regional economy. The euro traded at $1.3805, less than the $1.3827 that the shared currency bought late Tuesday. The ICE dollar index, which measures the U.S. currency against a basket of six major rivals, rose to 80.003 from 79.939 late Tuesday. In other foreign-exchange action, the U.S. dollar bought ¥102.30 versus ¥102.29, and the British pound edged up to $1.6581 from $1.6532. The Australian dollar rose to 92.23 U.S. cents from 91.66 U.S. cents. (Market Watch)

Commodities

U.S. Crude Gains $1 To Top $100/Bbl On Cushing Drawdown. U.S. crude gained more than $1 per barrel on Wednesday as inventories at the future's delivery point dropped for the eighth straight week, while Brent held steady, supported by supply outages in Nigeria and Libya and tensions over Russia's annexation of Crimea. Brent for May delivery posted a 4-cent gain to settle at $107.03 a barrel, while U.S. crude, known as West Texas Intermediate or WTI, rose $1.07 to settle at $100.26 a barrel. (Reuters)

Gold Slips Toward $1,300 On Strong US Durable Goods Data. Gold fell to near $1,300 an ounce on Wednesday as encouraging U.S. manufacturing data reduced bullion's appeal to institutional investors as a hedge against economic uncertainty, sending prices to their lowest in more than five weeks. Spot gold was down 0.6 % at $1,302.31 an ounce by 2:32 p.m. EDT (1832 GMT), having fallen to $1,300.09 in earlier trade, its lowest since mid-February. Among other precious metals, silver was down 0.9% to $19.74 an ounce, and palladium dropped 0.9 % to $774.60 an ounce. Platinum fell 0.8 % to $1,401.50 an ounce. (Reuters)