Global

IMF's Lagarde Hints At World Growth Forecast Cut. Global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, IMF chief Christine Lagarde said on Sunday, hinting at a slight cut in the Fund's growth forecasts. Lagarde said central banks' accommodative policies may have only limited impact on demand and that countries should boost growth by investing in infrastructure, education and health, provided their debt stays sustainable. The IMF's update of its global economic outlook, expected later this month, will be "very slightly different" from the forecasts published in April, she said. In April, the IMF had forecast that global output would grow by 3.6 % in 2014 and 3.9 % in 2015. (Reuters)

Malaysia

Exports In May Expanded By 16.3% YoY, a slightly slower pace from the previous month’s 18.9% but outpacing consensus’ expectations of 15.2%. This is on continued surge in demand for E&E and commodity goods from both the Asian regions and the developed West. Imports also performed strongly, posting an 11.9% growth, outpacing consensus’ estimates for a 7.7% increase. Due to the stronger-than-expected imports performance, trade surplus narrowed to RM5.7b from RM8.9b, but total trade increased by 14.2% YoY from 12.0% previously. (Please refer to Economic Viewpoint for further comments)

Asia

IMF: Global Recovery To Accelerate In 2015, No Brutal Slowdown In China. Global economic activity should strengthen in the second half of this year and accelerate in 2015 although momentum could be weaker than expected, IMF chief Christine Lagarde said on Sunday, adding that the Fund did not expect a sharp slowdown in China. "Looking at emerging Asian countries, and in particular China, we are reassured because we do not see a brutal slowdown but rather a slight slowing of a growth that has become ... more sustainable and that we see at 7 to 7.5 % this year." (Reuters)

Japan Sees Ottawa Trade Talks As Key To Final Stage By End-Year. Current trade talks in Ottawa between Japan, the United States and 10 other Pacific rim countries are key to advancing the planned Trans-Pacific Partnership (TPP) to its final stage by year-end, Japan's chief negotiator said on Saturday. U.S. President Barack Obama said on June 20 his aim was to have a free-trade draft he could take to meetings with other leaders in November, and Japanese negotiator Koji Tsuruoka also referred to a late-2014 goal. "I understand that this meeting in Ottawa will be a very important step to bring the TPP to the final stage towards the end of the year," Tsuruoka told reporters in Japanese in Ottawa. Frustrated by the lack of progress in global talks at the World Trade Organization, the 12 Pacific countries involved are trying to come up with a regional pact, one which nonetheless could still get bogged down over issues like Japanese farm tariffs. (Reuters)

Europe

Switzerland Gains Edge Over EU With China Trade Deal. Switzerland has one-upped its European Union neighbours with a free trade deal with China that its politicians and business sector say is crucial to boosting ties with the world’s second-largest economy. The free trade agreement (FTA), in force since last Tuesday, is China’s first with a mainland European country and was sealed last year after two years of talks. “We look to the huge Chinese market but on the other side, China will find in Switzerland partners on a top technology level and a top innovation level,” said Economy Minister Johann Schneider-Ammann, as he marked the start of the FTA with Chinese officials, here. The deal will cut red tape and tariffs on Swiss farm and industrial exports to China, giving them access to the country’s 1.4 billion increasingly wealthy consumers. (AFP)

UK: Car Sales See 'Strong' Six Months, Says The SMMT. New car sales have seen a 'strong' first half of the year says the Society of Motoring Manufacturers (SMMT). New figures show car sales rose 10.6% to 1.28m in the six months to June, compared to the same period last year. The Society of Motoring Manufacturers (SMMT) says the figures mark the best halfyear sales total since 2005. "Improving economic conditions have helped propel the UK new car market to a strong first half-year performance," said SMMT's chief executive Mike Hawes. "The overall market has risen faster than we were expecting but, after a bumper March, growth is showing signs of stabilising around our forecast level," he added. Sales of alternatively-fuelled cars rose 51.3% to 23,337. (BBC)

Currencies

Malaysian Ringgit Jumps To Highest This Year. Malaysia's ringgit jumped to its highest this year Friday as the economy improves and ahead of a widely expected interest-rate increase next week that would be the first since 2011. The currency climbed as much as 0.4% Friday to touch 3.1790 ringgit against the dollar--its strongest since Nov. 20--and traded at 3.1850 late in the Asia day. The currency has risen 2.8% so far this year and is the third best performer in Asia this year. (Market Watch)

South Korea To Get Clearing System For China's Yuan. South Korea will get a yuan clearing system in the capital Seoul, expanding the list of states with direct access to trade in the Chinese currency. China's central bank has signed a memorandum of understanding (MOU) with the Bank of Korea. The signing took place during Chinese President Xi Jinping's visit to South Korea. The timescale for the establishment of the clearing system has not been disclosed. A clearing system, also known as a clearing house, essentially acts as the middleman between two different parties, and is also the agent through which financial instruments such as shares, bonds and currencies are often traded. The move comes days after the French central bank also signed an MOU with its Chinese counterpart to set up a renminbi payment system in Paris. (BBC)

Dollar Firm, But Doubts Over Fed Shift Limit Gains. The dollar failed to make much headway on Friday after a jump in U.S. job creation left stock markets in an optimistic mood but did not convince traders it would be a trigger for the U.S. Federal Reserve to move toward tighter monetary policy. After a half-cent swing after the jobs numbers on Thursday, the dollar was just over 0.1 % higher against the euro at $1.3585 on Friday. The dollar index was up 0.1 % at 80.294. Volumes fizzled out in Europe with markets in United States closed for Independence Day. Against the yen, the dollar hovered near a two-week high at 102.06. It was up 0.7 % so far this week, on track for its best performance in 2-1/2 months. (Reuters)

Commodities

Oil Drops On Signs Of Rising Supply; Brent Below $111. Oil dipped on Friday with Brent futures dropping below $111 a barrel on the prospect of revived Libyan exports and more U.S. crude soon finding its way to refiners, but losses were tempered by economic data pointing to a stronger demand outlook. Brent crude fell 36 cents to settle at $110.64 a barrel, losing more than 2 % this week. U.S. oil lost 29 cents to $103.77 a barrel and was set to end the week down 1.9 % after seven straight days of losses. Trade was extremely thin due to the Fourth of July holiday in the United States. (Reuters)

Gold Steady, Seen Vulnerable After Strong U.S. Jobs Data. Gold edged up on Friday, gaining support from mixed European shares, but remained vulnerable after strong U.S. jobs data lifted the dollar, denting gold's investment appeal. Spot gold was down 21 cents to $1,319.49 an ounce at 1750 GMT. Other precious metals saw spot palladium rise as high as $865 an ounce, its highest since February 2001, before steadying at $857.50 an ounce. Silver was up 0.1 % to $21.12 an ounce, platinum was last at 1489.00 an ounce. (Reuters)