Malaysia

Malaysian Companies Invest RM132.8b Abroad. Malaysian companies invested RM132.8bil abroad last year, with more than half of the invested value going to the service industry. Malaysia External Trade Development Corporation (Matrade) cross-border division senior director Amran Yem said two main reasons companies invest abroad are to cut their operating costs and to increase their revenue in new markets. “Some even took the decision because of the availability of professional infrastructure, technology, expertise and knowledge in other countries. These business decisions are also profitable for us as we will be able to generate income through repatriation of profit from abroad,” he said at a cross-border briefing yesterday. Malaysia also invested 29% in mining and quarrying, agriculture (8%), manufacturing (6%) and construction (1%) abroad. (NST)

Asia

Philippine GDP Growth Beats Estimate In Boost To Aquino Goal. The Philippine economy grew faster than economists estimated last quarter as manufacturing rose, in a boost to President Benigno Aquino’s goal of luring more investment to create jobs. The peso rose. Gross domestic product increased 6.4% in the three months through June from a year earlier, the Philippine Statistics Authority said in Manila today, after rising 5.6% in the previous quarter. The median estimate of 22 economists in a Bloomberg survey was 6.1%. (Bloomberg)

South Korea September Business Outlook Drops To Lowest In Over 1 Year. South Korean manufacturers are significantly more pessimistic about the business outlook for September than they were for August, central bank data showed on Friday, mirroring the fragility of the recovery in Asia's fourth-largest economy. The Bank of Korea's manufacturing business survey index for September dropped to a seasonally adjusted 75 - the lowest level in more than a year - from 80 for August, which was a 4-month high. September's index was the lowest since a reading of 74 in May 2013. An index reading below 100 indicates companies who expect business conditions to deteriorate in the following month outnumber those seeing improvement. The index has remained below 100 since January 2011, when it hit 101. (Reuters)

USA

US Economic Growth Revised Upwards. The US economy grew at an annual rate of 4.2% in the second quarter of the year, according to revised figures from the US Department of Commerce. The revision upwards from 4.0% reflected stronger business spending and exports. It was the fastest pace of growth since the third quarter of 2013. Growth in consumer spending, which accounts for more than two-thirds of US economic activity, remained at a rate of 2.5%. (BBC)

Jobless Claims In U.S. Little Changed As Economy Strengthens. The number of Americans filing for unemployment benefits was little changed last week near the lowest level in seven years as employers held on to staff in an improving economy. Claims decreased by 1,000 to 298,000 in the week ended Aug. 23 from 299,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 46 economists surveyed by Bloomberg called for an increase to 300,000. (Bloomberg)

Pending Sales Of U.S. Existing Homes Increase More Than Forecast. Contracts to purchase previously owned homes rose more than forecast in July, a sign of renewed momentum in residential real estate. The pending home sales index gained 3.3% after a 1.3% decrease in June that was larger than initially reported, the National Association of Realtors said today in Washington. The median projection in a Bloomberg survey of economists called for the index to advance 0.5%. (Bloomberg)

Europe

Euro Zone Sentiment Drops More Than Expected, Hits 8-Month Low. Economic sentiment in the euro zone worsened by more than expected in August and fell to its lowest level in eight months, mainly on deteriorating morale in the retail, consumer and industry sectors, the European Commission said on Thursday. The European Commission's economic morale index dropped to 100.6 points in August from a revised 102.1 in July, while analysts surveyed by Reuters expected a drop to 101.5. Among the largest euro zone economies, sentiment dropped significantly in Italy by -4.1, sending the index below its long-term average of 100 for the first time since February, and in Germany by -1.9 to 104.1. Separately, the euro zone's Business Climate Index - which points to the phase of the business cycle - dipped by less than anticipated to 0.16 points from 0.17 in July. (Reuters)

Steady German Inflation Leaves Open Risk Of Euro Zone Dip. Annual inflation in Europe's largest economy held steady in August, data showed on Thursday, suggesting there is still a risk the euro zone rate will fall and increasing the dilemma for the European Central Bank over whether to take action. Preliminary data from the Federal Statistics Office showed consumer prices rose by 0.8% in August, both on the measure harmonised to compare with other European Union countries and on the non-harmonised measure. That was bang in line with the consensus forecast in a Reuters poll but well below the ECB's target of close-to-but-just-under 2% for the euro zone. (Reuters)

Spanish Economy Strengthens While Consumer Prices Drop. Domestic demand drove faster economic growth in Spain last quarter, while consumer prices extended a decline in August that has sparked a debate about another round of European Central Bank stimulus. Gross domestic product rose 0.6% as household spending and investment advanced, the National Statistics Institute in Madrid said today, confirming its first estimate. Consumer prices fell 0.5% in August from a year ago, the sharpest decline since Oct. 2009, it said in a separate release. (Bloomberg)

German Finance Minister Backs French Push For Pro-Growth Investment. German Finance Minister Wolfgang Schaeuble backed French President Francois Hollande's calls for greater investment to boost growth in Europe on Thursday, hours after Hollande called for a euro zone summit to coordinate pro-growth measures. "We can't deny that some geopolitical risks are currently playing a very important role," Schaeuble told a news conference with French counterpart Michel Sapin in Paris, adding that it was important to boost investment given weakening growth. "There are signs of a certain economic slowdown. That's why its important to stay the course," on investment, he said. After pushing for austerity in Europe for the past four years, Germany is showing clemency towards its closest ally, France, encouraged by a revamped French government's commitment to reforms and spending cuts. (Reuters)

Currencies

Yen Firms On Ukraine Tensions, Euro Braces For Inflation Test. The safe-haven yen held firm early on Friday, while the euro was on track to post its second straight month of declines as tensions between Ukraine and Russia flared up again. Ukraine's president said Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town, sharply escalating a five-month-old separatist war. The news short circuited a corrective bounce in the euro, sending the currency hurtling back towards a near one-year low of $1.3152. It was last at $1.3182, at least 40 pips below Thursday's intraday high. The common currency is down 1.6% so far in August, following last month's 2.2% drop.

The pullback in the euro helped the dollar index edge up to 82.491, back towards its 13-month peak of 82.727 set on Wednesday. Both the dollar and euro, however, eased against the safe-haven yen. The greenback dipped to 103.70, well off a recent high of 104.49, while the common currency reached a 2-1/2 week low of 136.42. The euro last stood at 136.71. (Reuters)

Commodities

Brent Falls, U.S. Crude Rises As Global Demand Seen Weak. Brent crude oil fell and U.S. crude rose as ample global supply and lackluster demand pressured the global benchmark while positive U.S. economic data supported oil prices in the world's largest oil consumer. October Brent crude fell by 26 cents to settle at $102.46 a barrel. Last week, the contract hit a 14-month intraday low of $101.07 and it has been unable this week to break out of the $101-$104 range. U.S. crude for October rose 67 cents to settle at $94.55 a barrel. (Reuters)

Gold Rises For 3rd Straight Day Eying Ukraine, Equities Drop. Gold rose for a third consecutive session on Thursday as tensions in Ukraine increased and equity markets retreated, but analysts said the rebound could be short-lived due to strong U.S. economic growth data and the prospects of a U.S. interest rate hike. Spot gold was up 0.6% at $1,289.99 an ounce by 2:25 p.m. EDT (1825 GMT). Spot silver rose 0.6% to $19.54 an ounce, rebounding from a two-month low of $19.25 hit last week. Spot platinum rose 0.8% to $1,421.25 an ounce, while spot palladium was up 0.6% to $894.50 an ounce. (Reuters)