Malaysia

Zeti: SRR Adjustment Only With Fundamental Change In Financial System. The statutory reserve requirement (SRR) will see an adjustment, only if there is a fundamental change in the liquidity of Malaysia's financial system, says Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz. Speaking to reporters, Zeti said the central bank had an extensive policy toolkit to ensure the stability of the financial system. "This is important for a country like Malaysia which is now progressing to greater maturity in its financial system," she added. On another note, Zeti said Malaysia can weather the current global volatility. "At the same time, we are seeing a risk to inflation. But in our assessment, it is likely to be temporary. "This is the period of price adjustments and could lead to temporary increases in the inflation rate. But we expect that by 2016, inflation will begin to trend towards our long-term average of 3%," Zeti said. (Bernama)

PM Unveils Measures To Relax Entry Visas. Malaysia will allow investors, fund managers and business visitors from Asean countries, China and India to apply for five-year multiple entry visas (MEV) by the end of the year. Prime Minister Datuk Seri Najib Tun Razak yesterday also announced an Asean programme that would give youths from Malaysia and the region an opportunity to undergo internships in various Asean countries. The Prime Minister said the two measures were aimed at boosting regional trade and fostering closer cultural integration. (The Star)

Asia

Singapore Industrial Output Accelerates. Singapore's industrial output accelerated in July as production of biomedical goods rose sharply, compensating for continued weakness in electronics production. Industrial production rose 3.3% on year in July, compared with a revised 0.8% increase in June, data released on Tuesday from the Economic Development Board of Singapore showed. A poll of nine analysts by The Wall Street Journal predicted a 3.6% year-over-year rise. Production in the biomedical cluster rose 28.5% on year in July following higher demand for medical instruments and supplies. Within the biomedical goods, pharmaceuticals production surged 28%, according to the statement. (WSJ)

USA

Consumer Confidence In U.S. Rises To Almost Seven-Year High. Consumer confidence in the U.S. unexpectedly climbed in August to the highest level in almost seven years, reinforcing signs of a strengthening outlook for the second half of 2014. The Conference Board’s sentiment gauge rose to 92.4, the highest since October 2007, from a revised 90.3 a month earlier, the New York-based private research group said today. The median forecast in a Bloomberg survey called for a decline to 89. (Bloomberg)

· Orders Soar By Nearly 23%, Thanks To Aircraft. Orders for long-lasting U.S. manufactured goods posted their biggest gain on record in July on strong international demand for aircraft, but the underlying trend remained consistent with a steady pace of domestic economic growth. The Commerce Department said on Tuesday durable goods orders, items ranging from toasters to aircraft that are meant to last three years or more, jumped 22.6% last month after an upwardly revised 2.7% increase in June. July's increase was the largest on record and far outpaced economists' forecasts for a 7.5% advance. (Reuters)

U.S. Home Prices Fall In June: S&P/Case-Shiller. U.S. single-family home prices fell in June and disappointed expectations, a closely watched survey said on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2% in June on a seasonally adjusted basis. A Reuters poll of economists had forecast a flat reading. Nonseasonally adjusted prices rose 1.0% in the 20 cities, in line with expectations. "For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators – starts, existing home sales and builders' sentiment – are positive. Taken together, these point to a more normal housing sector." Prices in the 20 cities rose 8.1% year over year, shy of expectations for 8.4%. (Reuters)

Europe

UK Service Sector Growth Slowed In Latest Quarter, CBI Says. Service sector business growth slowed in the three months to August, according to a survey from business lobby group, the CBI. Growth in business volumes in consumer services was the slowest since last year, the CBI said. However, optimism among consumer services firms is strong, with 48% of companies more upbeat than three months ago, and only 4% less optimistic. In addition, more firms in the sector were planning to take on employees. (BBC)

Hollande Entrusts French Economy To Ex-Banker Macron. By making ex-banker Emmanuel Macron his new Economy Minister, French President Francois Hollande will be hoping to boost his pro-reform agenda and end two years of infighting on his economics team. Macron, 36, Hollande's top economic adviser until a few weeks ago, has the business community's ear, although his appointment will not ease the cabinet's relations with rebel lawmakers who want an economic policy Uturn. Macron, a former partner at Rothschild bank, will work alongside Finance Minister Michel Sapin, 62, a close Hollande ally, to try and reinvigorate the euro zone's second-biggest economy. The stagnant economy has forced the government to abandon its growth and fiscal targets for this year, while unemployment is at a record high of over 3 million. (Reuters)

Africa

South Africa Avoids Recession As GDP Expands 0.6% In Quarter. South Africa’s economy avoided its second recession in five years, expanding an annualized 0.6% in the three months through June. Gross domestic product rose after contracting 0.6% in the first quarter, the statistics office said in a report released today in the capital, Pretoria. The median estimate of 23 economists in a Bloomberg survey was 0.9%. (Bloomberg)

Currencies

Dollar Flat Against Rivals After Consumer Confidence Data. The dollar traded in a flat range against the euro, yen and pound Tuesday after the U.S. consumer confidence index recorded its highest reading since October 2007 in August, boosted by an improving labor market. The euro traded at $1.3198 Tuesday, slightly above $1.3195 late Monday, also the low of the year. The pound traded at $1.6572, essentially flat from $1.6568 Monday. The dollar traded at 104.06 yen, flat from ¥104.09 Monday. The ICE U.S. Dollar Index a measure of the greenback’s strength against six rival currencies, traded at 82.5130 Tuesday, down from 82.5490 Monday. (Market Watch)

Commodities

U.S. Crude Rises On Supportive Data, Brent Slips. U.S. crude rose on Tuesday as supportive U.S. economic data overshadowed concerns about slowed growth in other oil consuming economies and ample global oil supplies. Brent crude fell 15 cents to settle at $102.50 a barrel, after reaching $103.40 during the session. U.S. crude rose 51 cents to settle at $93.86 a barrel, after failing to push through resistance in the area of the session peak at $94.35 a barrel, analysts said. (Reuters)

Gold Gains As Dollar Rally Stalls, Geopolitical Risks Buoy. Gold rose on Tuesday after a pause in the dollar rally prompted chart-based buying, but pared gains as European stimulus hopes and strong U.S. data pushed investors to equities. Spot gold hit a session high at $1,290.80 an ounce in early trade as stop orders were triggered on a break of the 200-day moving average just above $1,280. The contract was up 0.6% at $1,283.57 by 2:26 p.m. EDT. Silver rose on gold's coattails. It was up 0.4% to $19.41 an ounce, climbing further from Thursday's two-month low of $19.25. Spot platinum, which touched its lowest level since May 5 at $1,407.30 last week, was up 0.1% at $1,412.25 an ounce, while spot palladium was down 0.6% at $882.75 an ounce. (Reuters)