Global

IMF Cuts Global Growth Outlook, Warns Of Stagnation Risk In Rich Nations. The International Monetary Fund on Thursday chopped its 2014 forecast for global economic growth to take into account weakness early in the year in the United States and China, the world's two biggest economies. The IMF warned that only some of the factors leading to the reduction were temporary, and richer nations in particular faced the risk of economic stagnation unless they took steps to foster sustainable growth. In an update to its World Economic Outlook report, the IMF said the global economy should expand 3.4% this year, 0.3%percentage points below what it predicted in April. Growth should still speed up to 4% next year, it said, unchanged from what it predicted earlier this year. (Reuters)

Asia Pacific

China Manufacturing Activity At 18-Month High. China's manufacturing activity grew at its fastest pace in 18 months in July, an initial survey by HSBC showed, the latest in a series of signs that the country's economy may be stabilising. The bank's purchasing managers' index (PMI), a gauge of the sector's health, rose to 52 in July, from 50.7 in June. A reading above 50 shows expansion. It is the second successive month in which HSBC's PMI has been above that level. China has taken various steps in recent months to help boost its economy. (BBC)

South Korea Offers $11bil In Stimulus Spending As Growth Dips. South Korea offered billions of dollars in stimulus spending and property market-boosting steps on Thursday to shore up demand after reporting its weakest economic growth in more than a year. Exports in Asia's fourth-largest economy have benefited less than expected from a pick-up in the global economy this year, but domestic demand has been fragile since a mid-April ferry accident hit tourism and its services industry. The government rolled out an additional 11.7tril won ($11.4bil) in spending and 26tril won of loans or other financial support, and loosened mortgage borrowing restrictions. The central bank separately offered banks up to 3tril won to encourage them to expand lending at low interest rates to companies that build factories in the country or buy machinery. (Reuters)

Japan June Exports Slide In Warning Sign For Economic Outlook. Japan's exports unexpectedly fell in June for a second straight month, weighed down by a drop in shipments to Asia and the United States, signalling that weak external demand may require bolder measures from policymakers to sustain the country's economic recovery. Exports fell 2.0% in June from a year earlier, compared with a 1.0% increase expected by economists in a Reuters poll, data from the Ministry of Finance showed on Thursday. That followed a 2.7% decline in the prior month, which was the first annual drop in 15 months. (Reuters)

Singapore Central Bank Records S$15.8bil Profit. Singapore’s central bank posted a S$15.84bil net profit in its last financial year, helped by a drop in the local currency that led to valuation gains on its foreign currency holdings. The

Monetary Authority of Singapore (MAS), in its annual report issued yesterday, also reiterated that the economy was projected to grow 24% this year and kept its core inflation forecast unchanged at 23% for 2014. But MAS managing director Ravi Menon told a news conference that it had lowered its forecast range for headline consumer inflation to 1.5%-2.0% from the previous 1.5%-2.5%. (Reuters)

Household Debt Rising In Thailand. Household debt is rising in Thailand at the rate of 16% year-on-year to a record average of 219,158 bahts per family at the end of June. This is due to the country's slow economic recovery and increased cost of living, which saw an uptrend over the past nine years, according to a survey by the University of the Thai Chamber of Commerce (UTCC). The survey highlighted that on average, a person needed to pay 13,358 bahts in debt per month, and of the payment, 50.9% went to financial institutions and 49.1% for "underground" loans. (Bernama)

NZ Central Bank Raises Rates, But Is Set To Pause. New Zealand's central bank raised interest rates to the highest level in more than 5 years on Thursday but said it would now take a breather as it looked at the impact of its tightening and watched inflation in the economy. The Reserve Bank of New Zealand lifted its official rate by 25 basis points to 3.50%, as expected, the fourth consecutive rise in as many meetings. It said rates would need to return to a more neutral level, but the economy appeared to have slowed amid falling commodity prices and moderate inflation. (Reuters)

USA

U.S. Factory Activity Expands In July. The U.S. manufacturing sector expanded in July, though the pace of expansion eased as new orders and employment also grew at slower paces, an industry report showed on Thursday. Financial data firm Markit said its preliminary U.S. Manufacturing Purchasing Managers Index was 56.3 in July, down from the June reading of 57.3 and below analyst expectations for a reading of 57.5. A reading above 50 signals expansion in economic activity. (Reuters)

Jobless Claims in U.S. Unexpectedly Drop to Eight-Year Low. The number of Americans filing applications for unemployment benefits dropped last week to the lowest level in more than eight years, reflecting what could be a pickup in auto making during a typically slow time of year. Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than any economist surveyed by Bloomberg forecast, a Labor Department report showed today in Washington. Applications can be volatile in July because of auto plant shutdowns, even as state data showed nothing inconsistent with prior years, a Labor Department spokesman said as the data was released to the press. (Bloomberg)

U.S. New Home Sales Post Biggest Drop In Almost A Year. Sales of new U.S. single-family homes fell sharply in June and the prior month's data suffered the biggest downward revision ever, casting a cloud on the housing market recovery and helping to send homebuilder stocks lower. The Commerce Department said on Thursday sales dropped 8.1%, the largest decline since July 2013, to a seasonally adjusted annual rate of 406,000 units. May's sales pace was revised to 442,000 units from a previously reported 504,000 units. (Reuters)

Europe

Euro Economy Shows Unexpected Strength After ECB Action. Euro-area manufacturing and services activity strengthened in a sign of confidence that further stimulus by the European Central Bank will consolidate a fledgling economic recovery. A Purchasing Managers Index for both industries jumped to 54 in July from 52.8 in June, matching a three-year high reached in April, London-based Markit Economics said today. That’s the 13th month the gauge has exceeded 50, the mark that signals expansion. Economists predicted an unchanged reading of 52.8, according to the median of 22 estimates in a Bloomberg News survey. (Bloomberg)

French Manufacturing Contracts in Sign of Sluggish Recovery. French manufacturing contracted in July at the fastest pace this year in a sign that the euro area’s second-largest economy is struggling to gather pace. A Purchasing Managers Index for the manufacturing industry fell to 47.6 from 48.2 in June, London-based Markit Economics said today. That’s the lowest since December 2013 and the third straight reading below 50, the mark that signals contraction. Economists had forecast a decrease to 48, according to a Bloomberg News survey. (Bloomberg)

Spanish Jobless Rate Below 25% For The First Time In Two Years. The unemployment rate in Spain has fallen below 25% for the first time in two years, thanks to the beginning of a revival in the economy. An extra 402,000 people started work in the second quarter of the year, boosted by the seasonal upturn in tourism. That helped to push the official jobless rate down to 24.5%, from 25.9% in the first three months of the year. However the Spanish unemployment rate is still the second highest in Europe, with 5.6mil Spaniards out of work. (BBC)

UK Retail Sales Volumes Continue To Grow Briskly. The volume of goods sold in the UK's shops, stores and supermarkets continues to grow, according to the Office for National Statistics (ONS). Retail sales in June rose by 0.1% from May, leaving them 3.6% higher than a year ago. The sales increase in the second quarter, at 1.6%, was the largest for any calendar quarter for 10 years. The price of goods sold fell by 0.7% in May, leaving the price of retail goods the same as in June last year. (BBC)

Currencies

Pound Falls As U.K. Retail-Sales Data Disappoint. The pound sterling fell against the dollar, euro and yen Thursday, pressured by weaker-than-expected U.K. retail sales data and the lack of a clear hawkish signal from the Bank of England. The pound fell to $1.6985 from $1.7024 Wednesday, breaking below $1.7000 for the first time since late June. The New Zealand dollar fell against the dollar and most other G-10 currencies after the Reserve Bank of New Zealand called the kiwi’s strength “unjustified and unsustainable” and said “there is potential for a significant fall” in the currency’s value after its July meeting Thursday. The ICE U.S. Dollar index, a measure of the greenback’s strength against a basket of six currencies, was at 80.8590, up from 80.8230 Wednesday. (MarketWatch)

Commodities

Brent Oil Dips Below $107, Market Well-Supplied. Oil futures prices fell on Thursday as unseasonably weak demand and plentiful supplies of crude and refined products offset strong Chinese factory data that could presage higher energy demand in the world's No. 2 oil consumer. Brent for September delivery lost 96 cents to settle at $107.07 a barrel, after closing 70 cents higher on Wednesday. U.S. crude lost $1.05 to settle at $102.07 a barrel, after gaining 73 cents in the previous session. (Reuters)

Gold Hits 1-Month Low As Strong Data Offset Safe-Haven Lure. Gold hit a one-month low on Thursday after robust economic data from the United States, China and the euro zone deterred investors from safe-haven assets, even as tensions simmered in the Middle East and Ukraine. Prices for the yellow metal fell 1% to below $1,300 an ounce as the dollar and stock markets rose on surprisingly low weekly jobless claims and robust corporate earnings out of the United States. By 4:15 p.m. EDT (2015 GMT), the spot price of bullion was down about $12 at around $1,303 an ounce, after touching a June 19 low of $1,287.46. Platinum was down 0.8% at $1,465.30 an ounce, while palladium was steady at $868.25 an ounce. Silver lost 2.5% to $20.34 an ounce. (Reuters)