Malaysia

Inflation Inched Higher In June, Recording A 3.3% YoY Growth following a 3.2% rise in the previous month. This is in line with market expectations. The higher rate is largely on account of higher food prices. The core inflation (minus food and beverages) also ticked up slightly to 3.2% YoY, from 3.1% previously though the monthly comparison did not see any increase. For the first six months of the year, the CPI averaged at 3.4%, compared to 1.6% seen in the same period in 2013. On a monthly comparison, inflation rose by 0.2% MoM. (Please refer to Economic Viewpoint for further comments)

Asia

China's Economic Growth Picks Up. China's economy picked up speed in the April-to-June quarter, a sign that the government's stimulus moves have started to have an impact. The world's second-largest economy expanded 7.5%, from a year ago, up from 7.4% growth in the previous quarter. Other data released on Wednesday showed that retail sales and factory output also rose in June. The data comes as China has introduced a series of measures in recent months to help boost its growth. China has set a growth target of 7.5% for 2014. On Wednesday, it said that factory output rose 9.2% in June, from a year earlier, while fixed asset investment jumped 17.3% in the first six months of the year. Meanwhile, retail sales in June were 12.4% higher than a year ago, indicating that domestic consumption was picking up. (BBC)

Indonesia To Halt Surge In Private Foreign Debt. Indonesia’s financial authorities are looking at ways to limit a surge in foreign debt among private firms and want to enlist the help of banks, worried that runaway lending could spark instability in South-East Asia’s largest economy. The central bank has expressed concern over a rise in the debt service ratio (DSR), which climbed to 46.3% in the first quarter from 36.8% in the same period last year due to a surge in private external debt. Bank Indonesia prefers the DSR, which is the ratio for repayments on external debt principal plus interest compared to a country’s total export earnings, to be below 35% . “If the economy slows down and exports don’t pick up, the private sector has to be prudent offshore,” Mirza Adityaswara, senior deputy governor of Bank Indonesia, told Reuters. ”The point is there should be regulation to make sure offshore borrowing is done prudently.” The amount of private external debt almost doubled to US$145.6bil last April from around US$83.8bil in 2010. (Reuters)

USA

Gain In Factory Output Provides Boost To U.S. Growth. Industrial production climbed in June to cap the strongest quarter in almost four years as manufacturers provided a bigger spark for the U.S. economy. A 0.2 % increase in output at factories, mines and utilities last month followed a revised 0.5 % advance in May, figures from the Federal Reserve showed today in Washington. While the June gain fell short of expectations, production rose at a 5.5 % annualized rate from April through June, the most since the third quarter of 2010. (Bloomberg)

Wholesale Prices In U.S. Increase More Than Forecast On Fuel. Wholesale prices in the U.S. rose more than forecast in June, reflecting a jump in energy costs that is now abating. The 0.4 % increase in the producer price index followed a 0.2 % drop in May, the Labor Department reported today. The median estimate in a Bloomberg survey of 69 economists called for an advance of 0.2 %. Fuel costs climbed 2.1 %, the biggest gain since February 2013. (Bloomberg)

Homebuilder Confidence In U.S. Climbs To Six-Month High. Confidence among U.S. homebuilders rose more than forecast in July, reaching the highest level in six months, as growing payrolls brightened the outlook after a shaky first half. The National Association of Home Builders/Wells Fargo sentiment measure climbed to 53 from 49 in June, the Washingtonbased group reported today. Readings above 50 mean more respondents said conditions were good. The median forecast in a Bloomberg survey of economists projected it would rise to 50. (Bloomberg)

Europe

UK Unemployment Falls To Six Year Low Of 2.12m. UK unemployment fell by 121,000 to 2.12 million in the three months to May, official figures show. The figure is the lowest level in nearly six years, according to the Office for National Statistics (ONS). The rate of unemployment also fell again, to 6.5% from 6.6% in the three months to April. The number of people claiming jobseeker's allowance last month fell by 36,300 to 1.04 million, the ONS added. (BBC)

Currencies

Pound Rises To 22-Month High Against The Euro. The pound rose to its strongest level in 22 months against the euro on Wednesday, as a drop in U.K. employment to its lowest point since 2008 added to talk that the Bank of England will raise interest rates sooner than previously expected. The euro fell to 0.7894 pounds from £0.7917 late Tuesday, its lowest level since August, 2012. The euro fell to $1.3525 from $1.3568 late Tuesday. The ICE U.S. Dollar Index, a measure of the greenback’s strength against six currencies, rose to 80.5640 Wednesday from 80.3900 Tuesday. The Canadian dollar rose to 93.04 cents from 92.96 cents, after Bank of Canada Governor Stephen Poloz said the central bank will maintain its overnight interest rate at 1%, as it seeks to curb a recent spike in inflation. (Market Watch)

Commodities

Brent Edges Above $106 On China Growth, Oil Demand Figures. Brent crude climbed above $106 a barrel on

Wednesday as data from China showed its economy grew faster than expected in the second quarter and the country's implied oil demand rose to its highest since the beginning of last year. Brent climbed 7 cents to $106.09 by 0410 GMT, after hitting an intraday low of $104.39 a barrel on Tuesday, the lowest in more than three months. The August contract expires today. U.S. crude gained 44 cents to $100.40 a barrel. The contract fell as low as $99.01 a barrel in the previous session to break the 200-day moving average of $99.92, a key technical indicator closely watched by traders. (Reuters)

Gold Rebounds On Bargain Hunting After Two-Day Tumble. Gold rebounded on Wednesday after two consecutive days of sharp losses, but a strong U.S. economic outlook and fears that the Federal Reserve could raise U.S. interest rates limited gains for the safe haven. Spot gold rose 0.2 % to $1,296.94 an ounce by 2:16 p.m. EDT (1816 GMT), after losing 3.3 % in the last two sessions, its biggest two-day loss since Oct 1. Among other precious metals, platinum was up 0.2% at $1,478.50 an ounce, while palladium rose 1% to $871.83 an ounce and silver gained 0.1 % to $20.67 an ounce. (Reuters)