Asia

Japan Second Quarter Machinery Orders Plunge; Weak Outlook Challenges Policymakers. Japan's core machinery orders tumbled in April-June at their fastest since the last global financial crisis and only a modest rebound is seen in the current quarter - further challenging policymakers contending with a fragile economy. Cabinet Office data out on Thursday showed core orders fell 10.4% in April-June from the previous quarter, marking the first slide in five quarters and the sharpest drop since January-March 2009 when orders declined 12.3%. Companies surveyed by the Cabinet Office forecast that core orders would rise 2.9% in July-September. Orders at manufacturers and service-sector firms fell 8.5% and 6.7% in April-June respectively. Manufacturers see orders falling 0.5% in the current quarter, while service-sector firms expect a 2.2% gain. (Reuters)

BOK Cuts Rate for 1st Time Since May 2013 to Boost Growth. South Korea’s central bank cut its interest rate for the first time in more than a year, risking inflaming record household debt as it backs government efforts to spur Asia’s fourthbiggest economy. Governor Lee Ju Yeol and his board lowered the seven-day repurchase rate to 2.25% from 2.5%, the Bank of Korea said in a statement in Seoul today. Fourteen of 18 economists surveyed by Bloomberg News forecast the move, with the rest seeing no change. (Bloomberg)

Indonesia Holds Key Rate As Current-Account Deficit Persists. Indonesia kept its key interest rate unchanged for a ninth straight meeting, as a wider current-account deficit limits the scope for the central bank to ease borrowing costs to support a slowing economy. Bank Indonesia Governor Agus Martowardojo and his board maintained the reference rate at 7.5%, the central bank said in Jakarta today, a decision predicted by all 28 economists surveyed by Bloomberg News. Thecurrent-account deficit was $9.1bil, or 4.27% of gross domestic product in the three months through June 30, more than double the previous quarter, Martowardojo said today. Southeast Asia’s largest economy expanded 5.12% in the second quarter from a year earlier, the slowest pace since 2009. (Bloomberg)

USA

Jobless Claims In U.S. Rise To Highest Level In Six Weeks. Applications for unemployment benefits in the U.S. rose more than forecast last week, interrupting a steady decline to pre-recession lows. Jobless claims climbed by 21,000 to 311,000 in the period ended Aug. 9, the highest in six weeks, a Labor Department report showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for 295,000. There was nothing unusual in the data and no states were estimated, a spokesman said as the figures were released. (Bloomberg)

U.S. Imported Inflation Subdued As Petroleum, Auto Prices Fall. U.S. import prices fell in July as a decline in the cost of petroleum products offset a rebound in food prices, keeping a lid on imported inflation pressures. The Labor Department said on Thursday import prices decreased 0.2% last month after June's unrevised 0.1% gain. Economists polled by Reuters had forecast import prices falling 0.3% in July. In the 12 months through July, prices increased 0.8%. (Reuters)

Consumer Confidence In U.S. Bounces Back On Job Gains. Confidence among U.S. consumers rose for the first time in three weeks on cheaper fuel costs and an improving job market. The Bloomberg Consumer Comfort Index advanced to 36.8 in the period ended Aug. 10 from 36.2 the prior period, which was the lowest level since June 8. The gain was led by improving views on household finances and the economy. The creation of more than a million jobs in the past four months is helping buoy spirits even as wage gains have failed to accelerate. The lowest gasoline prices since March are also providing relief for household budgets. (Bloomberg)

Europe

Eurozone Economy Fails To Grow In Second Quarter. The eurozone’s economic recovery has shuddered to a halt, bolstering calls for the European Central Bank to take aggressive measures to boost growth and halt a slide towards deflation. Gross domestic product was flat in the second quarter of 2014, compared with growth of 0.2% in the previous three months, according to official figures released on Thursday. Inflation fell to a four-and-a-half-year low of 0.4% in July. Escalating geopolitical tensions with Russia damaged confidence in Germany, contributing to a 0.2% fall in economic output – the first contraction since the end of 2012. The German economy accounts for almost 30% of eurozone GDP. France’s economy stagnated, while Italy has fallen into its third recession since 2008, meaning none of the eurozone’s three biggest economies registered any growth in the second quarter. The Dutch economy grew 0.5% after contracting between January and March, while Portugal and Spain expanded by 0.6%. (Financial Times)

France Risks EU Deficit Clash After Scrapping Targets. The French government abandoned its 2014 deficit targets after the economy unexpectedly failed to grow for a second straight quarter, risking a clash with European partners striving to meet their own fiscal goals. Finance Minister Michel Sapin said that European policy is partly to blame for the lack of expansion in the region’s second-biggest economy. French gross domestic product stagnated in the three months through June, national statistics office Insee said today in Paris. Economists forecast a 0.1% gain, a Bloomberg survey showed. The French government now predicts full-year growth of 0.5% instead of 1% announced previously. This year’s deficit will exceed the limit of 4% of economic output agreed less than four months ago with the commission, the EU’s executive body. (Bloomberg)

Currencies

Dollar Holds Against Yen, Euro After Jobless Data. The U.S. dollar was little changed against the euro and Japanese yen as investors assessed lackluster jobs data on Thursday. The dollar traded at ¥102.46 Thursday from ¥102.45 late Wednesday. The greenback had climbed as high as ¥102.66 during the Japanese trading day, the highest since Aug. 5. The euro climbed to $1.3367 from $1.3365 late Wednesday. The dollar index, which measures the U.S. currency against a basket of its rivals fell to 81.579 on Thursday from 81.606 late Wednesday. The dollar fell against the South Korean won after the Bank of Korea decided to cut its benchmark interest rate by 0.25%age point. The market move was seen as typical case of “buy the rumor and sell the news.” The dollar was at 1,021.2 Korean won from Wednesday’s close of 1,028.9. Korean won. The U.K. pound was little changed Thursday at $1.6688, after falling on a lackluster report on U.K. wage growth that raised the prospect that the central bank would push back the timing of an interest-rate increase. The pound had been at $1.6688. (MarketWatch)

Commodities

Brent, U.S. Crude Shed $2; Oil ETF Shares Slide. Crude oil prices fell more than $2 a barrel on both sides of the Atlantic on Thursday, sunk by weak economic data hinting at softening oil demand and by ample supplies. U.S. crude fell about 60 cents to a then session low of $96.03 between 10:50 and 10:51 a.m. EDT (1450 GMT). U.S. crude quickly bounced off that low, before resuming the retreat. The contract settled down $2.01 at $95.58 a barrel. Brent crude for delivery in September settled down $2.27 at $102.01 after dropping to a low of $101.92 , the lowest since July 2013. The October Brent contract lost $2.99 to settle at $102.07. (Reuters)

Gold Edges Up But Gains Capped By Putin, US Job Data. Gold prices were a touch higher on Thursday in thin trading, but gains were limited by U.S. jobless claims data which showed continued recovery in the labor market and conciliatory comments from Russian President Vladimir Putin about Ukraine. Spot gold was up 0.1% on the day to $1,313.39 an ounce by 3:07 p.m. Among other precious metals, silver was up 0.2% at $19.86 an ounce. Platinum edged up 0.1% to $1,461.93 an ounce, while palladium gained 0.7% to $880.25 an ounce.