Global

Global Bank Profits Hit $920 Billion As Chinese Lenders Boom. China's top banks accounted for almost one-third of a record $920 billion of profits made by the world's top 1000 banks last year, showing their rise in power since the financial crisis, a survey showed on Monday. China's banks made $292 billion in aggregate pretax profit last year, or 32 % of the industry's global earnings, according to The Banker magazine's annual rankings of the profits and capital strength of the world's biggest 1,000 banks. Last year's global profits were up 23 % from the previous year to their highest ever level, led by profits of $55 billion at Industrial and Commercial Bank of China (ICBC). Banks in the United States made aggregate profits of $183 billion, Banks in the eurozone contributed just 3 % to the global profit pool, down from 25 % before the 2008 financial crisis, the study showed. Italian banks lost $35 billion in aggregate last year, the worst performance by any country. Banks in Japan made $64 billion of profit last year, or 7 % of the global total, followed by banks in Canada, France and Australia ($39 billion in each country), Brazil ($26 billion) and Britain ($22 billion), The Banker said. (Bloomberg)

BIS: Central Banks Warned Of 'False Sense Of Security'. The Bank for International Settlements (BIS) has warned that ultra-low interest rates have lulled governments and markets "into a false sense of security". The Basel-based organisation - usually dubbed the "central banks' central bank" - urged policy makers to begin to normalise rates. "The risk of normalising too late and too gradually should not be underestimated," the BIS said. Markets have rallied since January. "Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy and underlying economic developments globally," the BIS said in its annual report. It said that low interest rates had helped increase demand for higher risk investments on stock markets as well as in property and corporate bonds markets. While global growth has improved, the BIS said it was still below its pre-crisis levels. (BBC)

Malaysia

M'sia's Growth To Pick Up In 2014, Household Debt A Risk: World Bank. Malaysia's economy is expected to expand 5.4% this year, picking up from a growth of 4.7% in 2013, as brightening exports outweigh an easing of domestic demand as fiscal and monetary tightening take effect, the World Bank said on Friday. Exports, a mainstay of the South-East Asian economy, are likely to grow 6.3% this year and 6.2% in 2015 as global recovery boosts demand for the country's key shipments such as oil and electronics, the bank said. "Export growth will be driven by higher energy, commodity and petrochemical production, as new investments start to come online," the World Bank said in its annual Economic Monitor report on Malaysia's outlook. However, the report added that high levels of household debt were a risk to growth as interest rates looked set to rise. (Reuters)

M’sia Has One Of The Highest Foreign Consumption Of Its Value-Added Products. Malaysia enjoys one of the highest shares of foreign consumption of its value-added products in the world, according to the World Bank’s Economic Monitor 2014. Nearly 60 % was consumed by foreigners in 2009. “This included the value-added of exporting firms and also of suppliers to export-oriented industries,” it said. This means that the external demand is highly significant to the Malaysian economy and higher than it appears from net exports (22 % of GDP) or the output from externally-oriented industries (38 % of GDP). As a small and open economy, Malaysia’s path to high-income status is tied to its trade performance. Over the past decades, Malaysia’s past economic success has been linked with open international trade and its further growth will require further boosting trade competitiveness. (NST)

Asia

Japan Consumer Price Growth At 32-Year High. Consumer prices in Japan rose at an annual rate of 3.4% in May, the fastest pace in 32 years, as the effect of the sales tax hike started to be felt. Japan raised its sales tax rate from 5% to 8% on 1 April. The price growth in May follows a 3.2% jump in April and is a big boost for Japan's attempt to trigger inflation. Japan has been battling deflation, or falling prices, for best part of the past two decades and that has hurt domestic demand and stifled growth. The Japanese government has taken various steps over the past few months to try and reverse this trend, and the country's central bank has set a target of a 2% inflation rate. (BBC)

Japan Jobless Rate Hits 16-Year Low, Signals Spending Rebound Ahead. Japan's unemployment rate hit a 16-year low in May, suggesting the economy will rebound in the third quarter from a sales tax hike and consequent slump in consumer spending. The jobless rate in the world's third-largest economy fell to 3.5 %, the lowest since 1997 and a level the Bank of Japan says is near full employment. At the same time, the availability of jobs rose to its highest level since 1992, good news for Prime Minister Shinzo Abe as he tries to cement a recovery after two decades of stagnation. The strong employment numbers were published alongside other data on Friday showing Japan's household spending fell 8 % in the year to May, four times the drop projected in a median market forecast and more than the 4.6 % decline in April. The tumble was due mainly to a pull-back in spending on housing, cars and household appliances - all of which saw a surge in demand before the sales tax hike on April 1. (Reuters)

India's Modi Eyes First Labor Overhaul In Decades To Create Jobs. Prime Minister Narendra Modi has set in motion the first major revamp in decades of India's archaic labor laws, part of a plan to revive the flagging economy, boost manufacturing and create millions of jobs. Successive governments have agreed labor reform is critical to absorb 200 million Indians reaching working age over the next two decades, but fears of an ugly union-led backlash and partisan politics have prevented changes to free up labor markets. Now, with the benefit of a single party majority in the lower house of parliament for the first time in 30 years, laws that date back to just after the end of British rule are set for an overhaul. Officials at the labor ministry say this is a top priority in the government's first 100 days in office. (Reuters)

USA

U.S. Consumer Sentiment Rises In Final June Reading. U.S. consumer sentiment rose in June as consumers remained optimistic the sluggish first quarter was due to difficult winter conditions, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final June reading on the overall index on consumer sentiment came in at 82.5, up from 81.9 the month before. It was above the median forecast of 82.0 among economists polled by Reuters and above the preliminary reading of 81.2. (Reuters)

Europe

UK Economic Growth Boosted By Business Investment. UK economic growth in the first quarter was helped by the fastest expansion in business investment in two years, official figures have shown. Business investment grew by 5% in the first three months of this year, almost double an earlier estimate of 2.7%. But the Office of National Statistics kept its estimate for economic growth in the quarter unchanged at 0.8%. Business investment is one of the factors used to assess the amount of "spare capacity" in the economy. In February the Bank of England estimated there was between 1% and 1.5% of spare capacity in the economy. Spare capacity most often stems from underinvestment by businesses. (BBC)

Currencies

Dollar Index Falls To Five-Week Low. The dollar on Friday posted weekly losses against major rivals, with a popular gauge of the currency’s strength falling to its lowest level in more than five weeks. The ICE dollar index, which pits the greenback against six other currencies, fell 0.39% for the week from $80.331 to $80.0410 on Friday. The dollar fell 0.69% to ¥101.42 Friday from ¥102.07 a week ago after a slew of economic data. The euro moved up 0.24% to $1.3630 from $1.3597 a week ago. Annual inflation in Germany, the euro zone’s largest economy, rose to 1% in June. The pound was up 0.14% to $1.7037 from $1.7013 a week ago. (Market Watch)

Commodities

Oil Steadies After Big Drop On Easing Supply Fears. Brent crude oil was little changed in choppy trading on Friday as investors moved to square positions following one of the international benchmark's biggest weekly falls this year due to reduced concerns over exports from strife-torn Iraq. Brent rose 9 cents to settle at $113.30 a barrel, after falling 79 cents in the previous session. It lost more than 1.3 % this week, its steepest weekly fall since March. U.S. crude fell 10 cents to settle at $105.74 a barrel after ending Thursday 66 cents weaker at $105.84, the lowest settlement since June 11. U.S. crude lost nearly 1.4 % during the week, and has fallen $2 since hitting $107.73 on June 20. The spread between the two benchmarks closed the week at $7.56 after having widened to $9.67 on June 19, when Brent hit its 9-month peak. (Reuters)

Gold Steady After U.S. Consumer Confidence Data; Platinum Up. Gold prices ended little changed on Friday as betterthan-expected data on U.S. consumer sentiment dampened bullion's appeal as a hedge, while platinum group metals rose on lingering strike worries at South Africa's state power utility. Spot gold edged up 0.1 % to $1,318.46 an ounce by 3:05 p.m. EDT (1905 GMT), hovering near Tuesday's intraday high of $1,325.90, its highest level since mid-April. Among other precious metals, silver fell 0.1 % to $21.02 an ounce. Platinum rose 0.7 % to $1,473.50 an ounce, while palladium was up 0.8 % at $838.90 an ounce. (Reuters)