Malaysia

Budget 2015 To Focus On Helping People Cope With Rising Cost Of Living. Various measures are to be taken under Budget 2015 to help the people cope with the rising cost of living. “These include increasing food production levels, as well as curbing profiteering by the middlemen and speculative activities,” said Prime Minister Datuk Seri Najib Tun Razak. “The Domestic Trade, Cooperative and Consumerism Ministry will continue to step up enforcement and monitor prices more closely. “In the long run, we are also looking into ways of how the rakyat can be empowered through better education and continuous upskilling to increase productivity and to earn higher wages,” Najib added. Budget 2015 is scheduled to be tabled in Parliament on Oct 10. (The Star)

Asia

China Cuts Bureaucracy For Investment. China has simplified procedures for the government to approve investment projects to increase transparency and efficiency, the country's top economic planner said on Monday, the latest effort to streamline administration and devolve more power to firms. The government will only vet certain aspects of projects considered strategic, such as those pertaining to environmental protection, economic security and monopolies, according to new rules. Companies will be given more autonomy in deciding matters such as investment returns and financing, the government said, without giving more details. (Reuters)

South Korea May Consumer Sentiment Slips To Eight-Month Low. South Korea's composite consumer sentiment index in May slipped to its lowest in eight months, dampening hopes for a firm recovery in domestic consumption in Asia's fourth largest economy, central bank data showed on Tuesday. The composite consumer sentiment index (CCSI) fell to 105 in May from 108 in April, a survey by the Bank of Korea showed. May's number was the lowest level since a reading of 102 seen in September last year. A reading above 100 indicates that consumers who expect economic and living conditions to improve in the coming month outnumber those who expect them to worsen. The index has remained above 100 since December 2012, but has been slowly crawling down from a near 3-year high seen in January. (Reuters)

BOJ Says QQE Prevents Not Just Deflation But Excessive Inflation. Bank of Japan deputy governor Kikuo Iwata has signalled the possibility of withdrawing the central bank’s massive monetary stimulus if the economy overheats and nudges up inflation well above its 2% price target. Iwata voiced confidence that Japan was making steady progress in meeting the central bank’s inflation goal with prices rising not just because of a weak yen, which inflates import costs, but strength in domestic demand. He also said heightening inflation expectations in Japan would help prevent excessive rises in the yen, which had weighed on the export-reliant economy during 15 years of deflation. (Reuters)

India Current-Account Gap Shrinks In Boost For Modi’s Government. India’s current-account deficit narrowed to a fresh four-year low as higher tariffs reduced gold imports, giving Prime Minister Narendra Modi’s government more room to bolster Asia’s third-largest economy. The shortfall was $1.2 billion in January through March, compared with $4.2 billion for the prior quarter, the Reserve Bank of India said in a statement in Mumbai yesterday. The deficit was equivalent to 0.2 % of gross domestic product for the quarter, while the gap for the fiscal year shrank to 1.7 % from a 4.7 % in the previous 12 months. The current account is the broadest measure of trade. (Bloomberg)

Europe

Draghi Says Timing Key As ECB Watches For Negative Spiral. European Central Bank President Mario Draghi signalled policy makers are ready to take action in June should they see low inflation becoming entrenched. “What we need to be particularly watchful for at the moment is, in my view, the potential for a negative spiral to take hold between between low inflation, falling inflation expectations and credit, in particular in stressed countries,” Draghi said in a speech at an ECB conference in Sintra, Portugal. “The key issue today, however, is timing.” (Bloomberg)

Ireland Unemployment Rate Falls By 0.2% In The Quarter. The unemployment rate in Ireland has fallen less than expected in the first quarter of the year. The change, from 12.2% to 12%, failed to reach a 11.8% rate estimated in recent claims data. Unemployment fell for the eighth quarter in a row from a high of 15.1%, but did not match the Eurozone average of 11.8%. The number of employed people rose by 1,700 from the previous quarter, the Central Statistics Office said. However, in the fourth quarter of last year there was a 10,600 gain in the number of people employed. (BBC)

Currencies

Currency Swap Facility For Malaysia And South Korea. Bank Negara and the Bank of Korea have activated a currency swap facility worth up to RM5bil, or five trillion won, to facilitate trade settlements between companies in Malaysia and South Korea. Under the Malaysia-Korea Currency Swap-Financed Trade Settlement Facility, Bank Negara will provide Korean won funds to banks in Malaysia that in turn will facilitate Malaysian firms’ use of the currency for trade settlement. Similarly, the Bank of Korea will facilitate South Korean firms’ usage of Malaysian ringgit for their trade settlement by providing Malaysian ringgit funds to banks in South Korea. (The Star)

Dollar Falls Versus Euro, Rises Against Yen. The U.S. dollar fell against the euro on Monday, but the single currency stayed near three-month lows after European Central Bank President Mario Draghi hinted of monetary policy easing. The dollar rose to $1.3642 from $1.3630 in late North American trading on Friday. The dollar was on solid footing against the Japanese yen trading at 101.90 from ¥101.97 in the prior session. The ICE dollar index, which weighs the greenback against six other currencies, rose to 80.291 from 80.374 in Friday's late North American trading. (Market Watch)

Commodities

Brent Slips To Near $110/Bbl After Ukraine Election. Brent crude eased to near $110 a barrel on Monday, down from last week's two-and-a-half month high, as worries over Ukraine eased slightly following a presidential election. July Brent crude closed down 22 cents at $110.32 a barrel after hitting a two-and-a-half month high at $111.04 on May 22. U.S. crude futures for July delivery were down 17 cents at $104.18 a barrel, after settling on Friday at their highest since April 21. (Reuters)

Gold Steady, But Ukraine Election Win May Weigh. Gold held steady below $1,300 an ounce on Monday after ending flat for two straight weeks, but a Ukraine presidential election win by a pro-West candidate could bring stability to the country and undermine the precious metal's safe-haven status. Spot gold was up 11 cents at $1,292.61 an ounce by 1750 GMT. Platinum fell less than 1 % to $1,465.80 an ounce, not too far from an 8-1/2-month high hit last week. Palladium was last quoted at $824.30 an ounce, near a 2-1/2-year peak. Silver fell 0.1 % to $19.40 an ounce. (Reuters)