Asia

Philippines’ Growth Forecast Cut. The World Bank lowered its growth forecasts for the Philippines this year and the next after weak state spending in the second quarter and a tightening of monetary policy, but the bank said strong domestic demand would still fuel economic expansion. The development lender said in a statement yesterday it now expects growth this year to reach 6.4%, having previously forecast 6.6% growth. The forecast for growth this year was revised down to 6.7% from a forecast of 6.9% in April. (Reuters)

India Approves Foreign Investment Hike In Railways, Defence. India's cabinet has approved plans to open its defence and railways industries to foreign investment as new Prime Minister Narendra Modi's administration moves to reform and revive the ailing economy. Cabinet agreed late on Wednesday to increase the limit on foreign direct investment in defence to 49% from 26%, and allow unlimited investment in railway infrastructure, according to the Press Trust of India news agency. (AFP)

USA

Jobless Claims Fall As Average Drops To Eight-Year Low. Fewer Americans filed applications for unemployment benefits last week, sending the average over the past month to an eight-year low, a sign the labor market continues to gain momentum. Jobless claims decreased by 14,000 to 289,000 in the week ended Aug. 2 from 303,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for an increase to 304,000. (Bloomberg)

U.S. Fed Buys $7.6bil Of Mortgage Bonds, Sells None. The Federal Reserve bought $7.648bil of agency mortgage backed securities in the week from July 31 to Aug 6, more than the $7.205bil purchased the previous week, the New York Federal Reserve Bank said on Thursday. In a move to help the housing market begun in October 2011, the U.S. central bank has been using funds from principal payments on the agency debt and agency mortgage-backed securities, or MBS, it holds to reinvest in agency MBS. The New York Fed said on its website the Fed sold no mortgage securities guaranteed by Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) or the Government National Mortgage Association, or Ginnie Mae, in the latest week. It sold none the prior week. (Reuters)

Consumer Credit in U.S. Rises on Demand for Car, Student Loans. Consumer borrowing rose in June as American households took out auto and student loans. The $17.3bil increase in consumer credit followed a $19.6bil May advance, the Federal Reserve reported today in Washington. Non-revolving loans, including borrowing for cars and college tuition, climbed $16.3bil. (Bloomberg)

Europe

Euro Zone Recovery Uneven, Rates To Stay Low: ECB's Draghi. European Central Bank President Mario Draghi said on Thursday that an uneven economic recovery in the euro zone and the bloc's inflation outlook meant interest rates would stay low for an extended period. "The key ECB interest rates would remain at the present level for an extended period of time in view of the current outlook for inflation," Draghi told a news conference after the bank left interest unchanged at record lows. Risks surrounding the economic outlook for the euro area remained on the downside, in particular due to heightened geopolitical factors and developments in emerging market economies, he said. Earlier, the ECB said its Governing Council had decided to leave its main refinancing rate unchanged at a record low of 0.15%, as expected. (Reuters)

UK Interest Rates Held At Record Low Of 0.5% For Another Month. The Bank of England has held UK interest rates at a record low of 0.5% for another month. The size of the Bank's economic stimulus programme - quantitative easing – was also unchanged at £375bn. Debate over the timing of a rate rise has intensified, with Bank governor Mark Carney hinting recently that it could come by the end of this year. UK interest rates have been at 0.5% for five years. However, in June, Mr Carney said that interest rates could start to rise sooner than financial markets expected. (BBC)

Weak German Industry Output Adds To Signs Of Second-Quarter Slowdown. German industrial output rose just 0.3% on the month in June, missing a forecast rise of 1.3%, as fears over the crisis in Ukraine weighed, adding to signals that Europe's largest economy may have stalled in the second quarter. June's faint gain in output showed some recovery from May's monthly fall of 1.8 %, as construction activity picked up, but analysts said it was "too little, too late". (Reuters)

Greek Unemployment Dips To 27.2% In May. Greece's jobless rate eased to 27.2% in May from 27.3% in the previous month, the country's statistics agency ELSTAT said on Thursday. At more than double the euro zone average of 11.6% in May, Greece's unemployment rate remains near record highs despite signs of recovery in the economy, which is expected to emerge from recession and expand by 0.6% this year. (Reuters)

Currencies

Euro Falls Against Dollar On ‘Diverging Path’ Comment. The euro fell against the dollar Thursday morning after European Central Bank President Mario Draghi said monetary policy in the euro zone and the U.S. is on a “diverging path,” and that real interest rates would remain negative for much longer in Europe. The euro traded at $1.3364 Thursday morning, down from $1.3382 late Wednesday. The euro hit a nine-month low against the dollar Wednesday. The shared currency was up slightly against the yen, trading at ¥136.76, compared to ¥136.63 late Wednesday. The euro was flat against the pound, trading at £0.7935, compared to £0.7940 Wednesday, while the dollar traded at £1.6833, from £1.6856 late Wednesday. The Australian dollar fell to its lowest point against the U.S. dollar since early June after unemployment in Australia unexpectedly jumped to its highest level in at least a decade in July. The Australian currency traded at 92.68 cents Thursday morning, compared to 93.49 cents Wednesday evening. The ICE U.S. Dollar Index, a measure of the greenback’s strength against six other currencies, was up at 81.4980, compared to 81.4440 Wednesday night.

(MarketWatch)

Commodities

Oil Prices Rise On Reports U.S. Mulling Airstrikes On Iraqi Militants. Crude oil prices rebounded on Thursday after reports the United States was considering airstrikes on advancing Islamic militants in Iraq revived concerns about supply disruptions from OPEC's No. 2 oil producer. Brent crude gained 85 cents to settle at $105.44 a barrel, and rose more than $1 in post-settlement trading. It had closed at $104.59 a barrel on Wednesday, its lowest settlement since Nov. 7. U.S. crude gained 42 cents to settle at $97.34 a barrel, after closing at $96.92 a barrel in the previous session, the weakest level since February. (Reuters)

Gold Turns Higher On Technical Buying As Tensions Rise. Gold prices rose on Thursday as safe-haven buying amid rising tensions in Iraq and Ukraine extended the previous session's rally, and analysts said the metal could gain further after having breached key technical resistance. Spot gold was up 0.4% at $1,310.74 an ounce by 2:05 p.m. EDT (1805 GMT). Among other precious metals, silver was down 0.4% at $19.92 an ounce. Platinum rose 1.4% to $1,473.70 an ounce, while palladium was up 0.6% at $852.47 an ounce. (Reuters)