Malaysia

M'sia Up 10 Notches In FDI Index. Malaysia has surged 10 rungs to No. 15 in the 2014 Foreign Direct Investment Confidence Index (FDICI) released by global management consulting firm A.T. Kearney. It said Malaysia benefited from the strong in-bound regional FDI flows and good performance in financial services, heavy industry and primary industry. In a statement yesterday, A.T. Kearney said Malaysia aimed to build on its competitive position in electronics, automotive, and machinery manufacturing to move up the value chain into high-technology, skill-intensive segments. (Bernama)

Asia Pacific

Australia Beats Growth Forecast. Australia's economy grew more than forecast in the first three months of the year, boosted by a rise in exports and domestic consumption. Growth was 1.1% in the January-to-March period, from the previous quarter. Most analysts had forecast growth of 0.9%. The annual growth rate was 3.5% - the highest in nearly two years. However, some analysts said the figures indicated that Australia's economy was still too heavily reliant on the mining sector - which has been a concern. Mining accounted for around 80% of growth in the quarter, according to the figures by the Australian Bureau of Statistics. (BBC)

North America

Service Industries Propel Broad Rebound In U.S. Growth. Service providers from construction companies to retailers expanded in May at the fastest pace in nine months, signaling a broad-based rebound in the U.S. economy after a dismal first quarter. The Institute for Supply Management’s non-manufacturing index climbed to 56.3, the highest reading since August, from 55.2 in April, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion. Seventeen of the 18 industries surveyed showed improvement. (Bloomberg)

Trade Gap Jumps To Two-Year High As Americans Buy Imports. The trade deficit ballooned in April to the widest in two years as Americans bought record amounts of consumer goods, business equipment and automobiles from abroad. The gap grew by 6.9 % to $47.2 billion from the prior month’s $44.2 billion, which was larger than previously estimated, Commerce Department figures showed today in Washington. The April reading exceeded all estimates in a Bloomberg survey of 70 economists and was the biggest since April 2012. Exports were little changed. (Bloomberg)

Companies Add Fewer Workers Than Forecast, ADP Data Show. Companies in the U.S. added fewer jobs than forecast in May, a sign of uneven progress in the labor market, a private report based on payrolls showed. The 179,000 increase in employment was the smallest in four months and followed a 215,000 gain the prior month that was less than initially estimated, according to figures today from the Roseland, New Jersey-based ADP Research Institute. The median forecast of economists surveyed by Bloomberg called for May advance of 210,000. (Bloomberg)

Fed Saw Modest To Moderate Growth As Labor Market Improved. The Federal Reserve said the economy expanded at a modest to moderate pace last month as auto sales led household spending and the labor market improved. “Consumer spending expanded across almost all districts,” the report said today. “Labor market conditions generally strengthened” with “hiring activity steady to stronger” in most of the U.S. Seven of 12 districts saw “moderate” growth, with the rest characterized as “modest,” the Fed said in its Beige Book business survey, which is based on reports from its district banks. (Bloomberg)

Canada Keeps Key Rate At 1%, Sees Low Inflation Risks. The Bank of Canada kept its main interest rate unchanged with a neutral bias on its next move, saying the risks posed by low inflation remain. The benchmark rate on overnight loans between commercial banks stayed at 1 %, where it’s been since September 2010, as anticipated by all 21 economists in a Bloomberg News survey. Canadian and global economic growth were slower than expected in the first quarter while a weaker currency and higher energy costs are only temporarily boosting consumer prices, the bank said. (Bloomberg)

Europe

UK Services Sector Expands By More Than Expected In May. The UK's dominant services sector grew at a faster rate than expected in May, while employment in the sector stayed at a 17-year high recorded in April, a survey has shown. The Markit/CIPS services purchasing managers' index (PMI) eased slightly to 58.6 in May from 58.7 a month earlier. But that was still well above the 50 mark that separates growth from contraction. Markit said the economy was on course to grow by 0.8% in the second quarter. That would push the economy past its previous 2008 peak. (BBC)

Eurozone Business Activity Data Adds To Pressure On ECB. Eurozone business activity grew at a slower pace in May, a survey has indicated, increasing pressure on the European Central Bank (ECB) to take steps to boost growth. The final Purchasing Managers' Index (PMI) from research firm Markit dipped to 53.5, down from 54.0 in April, and short of an initial 53.9 estimate. However, it remained above the 50 level indicating expansion. German businesses saw strong growth, but French business activity fell. The slower rate of growth came despite firms cutting their prices for the 26th month in a row. Despite the slower pace of expansion, Markit said its data suggested the eurozone was on track to record economic growth of 0.4% to 0.5% for the second quarter of the year. (BBC)

Currencies

Dollar Up Vs. Euro As Investors Anticipate ECB Easing. The dollar rose against the euro on Wednesday as investors looked ahead to a European Central Bank decision that’s likely to inject stimulus into the euro-zone economy in an effort to fight persistently low inflation. The euro traded at $1.3605, down from $1.3628 late Tuesday. The ICE dollar index, which pits the greenback against six rivals, rose to 80.668 from 80.535 late Tuesday. The dollar rose to 102.75 yen from ¥102.52 late Tuesday. The Australian dollar inched up to 92.77 U.S. cents from 92.66 U.S. cents late Tuesday. The British pound slightly weakened to $1.6738 from $1.6749. (Market Watch)

Commodities

Oil Drops Back On Hopes For An Easing Of Ukraine Tension. Brent and U.S. crude ended lower on Wednesday as hopes that a peace plan from Ukraine's president-elect might help ease the crisis with Russian separatists cooled oil's earlier rally. Brent crude for July delivery fell 42 cents to settle at $108.40 a barrel. Brent settled back above the 100-day moving average of $100.32, but fell as low as $108.25 in post-settlement trading. U.S. July crude dipped 2 cents to settle at $102.64, after rising as high as $103.69 immediately after the release of U.S. oil inventory data that showed crude oil stocks fell last week. (Reuters)

Gold Falls Ahead Of ECB Policy Meeting, Jobs Data. Gold slipped on Wednesday as investors fretted over the possibility of an upcoming European Central Bank rate cut and uncertainties over key U.S. jobs data due later this week. At 4:00 p.m. ET, the spot price of gold was at $1,243.45 an ounce versus late Tuesday's $1,244.20 in New York. In other precious metals, the spot price of platinum rose 0.6 % to $1,432 an ounce after South Africa's newly appointed mining minister said he hoped to resolve a five-month long mine workers strike, which had been the longest and costliest strike in the industry. Spot palladium rose 0.2 % to $834 an ounce. Spot silver was flat at $18.76 an ounce. (Reuters)