Malaysia

Car Sales Up 12.7pc In May. Sales of passenger and commercial vehicles rose 12.7 % to 55,939 units in May against 49,634 in the same period last year. The Malaysian Automotive Association (MAA) yesterday said out of the units sold, 49,865 were passenger vehicles, while the balance 6,074 commercial vehicles. Between Janaury and May, the total industry volume was 14,724 units, or 5.7 %, higher than the same period in 2013. MAA expects similarly strong sales performance this month due to festive offers and promotions. (NST)

Asia Pacific

Philippines Raises Special Deposit Rate, Holds Benchmark. The Philippine central bank raised the rate it pays on special deposit accounts to curb liquidity and price pressure, even as it kept its benchmark interest rate unchanged for a 13th meeting. Bangko Sentral ng Pilipinas raised the rate on SDAs to 2.25 % effective immediately, according to a statement in Manila today. The decision was predicted by three of seven economists surveyed by Bloomberg News, with the rest forecasting no change. It kept the rate it pays lenders for overnight deposits at a record-low 3.5 %, as seen by 13 of 18 economists surveyed. (Bloomberg)

Vietnam Devalues Dong For First Time In A Year To Spur Exports. Vietnam’s central bank devalued the dong for the first time in a year to help spur exports and vowed to ensure the stability of the currency as tension rises over a Chinese oil rig in disputed waters. The State Bank of Vietnam devalued the dong by weakening its reference rate for the currency by 1% to 21,246 per dollar, according to a statement on its website late yesterday. The change, effective today, allows the dong to fluctuate as much as 1 % on either side of the central bank’s fixing. (Bloomberg)

Japan Business Mood Defies Economic Headwinds, Backs BoJ Optimism. Confidence of Japanese manufacturers held steady in June while the service-sector mood rebounded from the prior month, an encouraging sign for the economy as it tries to hold its ground in the face of soft exports and weakening consumption. The readings in Thursday's Reuters Tankan poll - which strongly correlates with the Bank of Japan's key tankan quarterly survey - reinforce policymakers' confidence that the world's third-largest economy can weather the pain of a recent national sales tax increase. In the Reuters Tankan, the index of sentiment among manufacturers stood at plus 19, unchanged from May, and up 1 point from three months ago. At plus 29, the service-sector gauge was up 8 points from May but down 2 points from March. Indexes are calculated by subtracting the percentage of pessimistic responses from optimistic ones. A positive reading means optimists outweigh pessimists. (Reuters)

NZ Economy Grows At Fastest Annual Pace In 6 Years. New Zealand's economy expanded at its fastest annual rate in more than six years during the first quarter driven by a surge in construction, bolstering the case for another interest rate rise next month to curb growing price risks. The economy grew a seasonally adjusted 3.8 % in January-March from a year ago, Statistics New Zealand figures showed on Thursday, its best pace since the September 2007 quarter and slightly exceeding economists' forecasts for a 3.7 % rise. Driving the NZ$226 billion ($195.7 billion) economy at the start of the year was a 12.5 % pick-up in construction activity, the biggest quarter rise since March 2000. (Reuters)

USA

Jobless Claims Drop As Confidence In U.S. Picks Up. Fewer Americans are filing applications for unemployment benefits, consumer confidence is rising and manufacturing is picking up as the world’s largest economy shows additional signs of strengthening. Jobless claims fell by 6,000 to 312,000 in the week ended June 14, the Labor Department reported today in Washington. Households this month were the most optimistic about the economic outlook in a year, factories in the Philadelphia region expanded at a faster pace and the index of leading indicators rose in May for the fourth straight month, other reports showed. (Bloomberg)

Leading Economic Indicators In U.S. Rise For Fourth Month. The index of U.S. leading indicators rose in May for the fourth straight month, showing the economy will gain momentum following a slowdown at the start of 2014. The Conference Board’s gauge, a measure of the outlook for the next three to six months, increased 0.5 % after a 0.3 % gain in April, the New York-based group said today. The median forecast of 44 economists surveyed by Bloomberg called for a 0.6 % advance. (Bloomberg)

Europe

Eurozone Recovery Not Strong Enough, Says IMF. The recovery in the eurozone is not strong enough, according to the International Monetary Fund (IMF). That's the assessment IMF head Christine Lagarde is delivering to eurozone finance ministers at a meeting in Luxembourg. The IMF also says the European Central Bank (ECB) should consider buying financial assets with newly created money, if inflation remains low. But the IMF's regular eurozone health check sees some signs of progress. "Strong policy actions have laid the foundations for economic recovery," it says. (BBC)

Euro Zone Bailout Fund ESM Considering Non-Euro Bond Issuance. The euro zone permanent bailout fund, the European Stability Mechanism (ESM), may issue bonds denominated in other currencies than the euro next year to attract new investors, the ESM's Managing Director Klaus Regling said on Thursday. The 500 billion euro fund was created during the euro zone sovereign debt crisis as a backstop for governments cut off from markets. Such foreign issuance would help the ESM attract new investors for example from among those U.S. hedge funds that invest only in instruments denominated in dollars and similarly with Japanese investors. (Reuters)

China Hints At Purchase Of Greek Bonds, Reiterates Targets. China signalled it would buy bonds when Greece issues debt again, in a show of support for a financially-stricken nation that hopes to become a gateway into Europe for Chinese products. Kicking off a three-day visit to Greece, Chinese Premier Li Keqiang pledged to remain a long-term investor in Greek bonds and reiterated growth and CPI targets for the Chinese economy, though he warned the global economy remained uncertain. Bailed out twice after nearly going bankrupt, Greece is hoping Chinese investment will help spur its battered economy to growth again. China, in turn, sees Greece's strategic location as a portal into both Europe and Africa for the distribution of Chinese products. (Reuters)

U.K. Retail Sales Drop As Food Slump Offsets World Cup. U.K. retail sales fell for the first time in four months in May as a World Cup boost failed to offset a slump in demand at food stores. Sales including auto fuel declined 0.5 % from April, the Office for National Statistics said today in London. That matched the median forecast of economists in a Bloomberg News survey. Food sales slid 2.4 % after surging the previous month during the Easter holiday. Sales at other retailers jumped 2.2 %, helped by demand for replica football jerseys before the World Cup tournament that started this month. (Bloomberg)

Currencies

Pound Tops $1.70 For First Time Since 2008. The pound jumped against the dollar Thursday as the Federal Reserve’s silence on when it could raise interest rates bolstered views that U.K. rates are likely to rise before those in the U.S. The pound shot up to $1.7038 from $1.6991 late Wednesday, topping $1.70 for the first time since October 2008, according to FactSet. The ICE Dollar Index, which pits the greenback against six rivals, inched down to 80.327 from 80.380 late Wednesday. In other action, the dollar traded at ¥101.96 versus ¥101.92 late Wednesday. The euro inched up to $1.3604 from $1.3594 in the prior session. (Market Watch)

Commodities

Oil Hits 9-Month High Above $115 A Barrel On Iraq Conflict. Brent crude hit a nine-month high of more than $115 a barrel on Thursday as the United States said it would send military advisers to Iraq, raising concerns about the escalating conflict. Brent rose 80 cents to $115.06 a barrel to settle at its highest since Sept. 9. It had reached a high of $115.71 earlier in the session. The U.S. crude oil futures contract for July, which expires on Friday, rose 46 cents to settle at $106.43. (Reuters)

Gold Surges 3 Pct In 'Frantic' Short Covering After Fed. Gold surged over 3 % for its best day in eight months on Thursday as the Federal Reserve's lack of commitment to raise interest rates and continued tensions in the Middle East unleashed a wave of short covering. Spot gold was up 3 % at $1,315.90 an ounce by 3:52 p.m. EDT (1952 GMT), having earlier hit $1,321.70, a two-month high. Silver gained 4.1 % to $20.68 an ounce, having earlier hit $20.91, a three-month high. Platinum rose 1.6 % to $1,467.70 an ounce and palladium was up by 1.5 % to $835.05 an ounce. (Reuters)