Asia Pacific

Japanese Regular Pay And Bonuses Rise In July, Offer Relief For PM Abe. Japanese summer bonuses rose in July and regular pay grew for the second straight month, government data showed, suggesting some firms are gradually raising wages. Real wages, which are adjusted to reflect changes in consumer prices, slipped in July for the 13th straight month, but the pace of decline slowed from the previous month. Wage earners' special payments, which are predominantly summer bonuses, grew an annual 7.1% in July after a revised 2.0% gain in June, data from the labor ministry showed. Regular pay rose 0.7% in July from the year before after a revised 0.2% gain in June, which was the first increase in 27 months, indicating regular pay may have hit bottom. (Reuters)

South Korea Inflation Eases To Five-Month Low, Gives Central Bank Room To Cut Again. South Korea's annual inflation in August eased to its lowest in five months, data on Tuesday showed, giving the central bank sufficient headroom to cut interest rates again to spur economic growth. The consumer price index gained 1.4% in August from a year earlier, Statistics Korea data showed, slower than a 1.6% rise in July and the median 1.6% increase forecast by a Reuters poll. This was the slowest rate since a 1.3% rise seen in March this year. (Reuters)

RBA Keeps Interest Rates At 2.5pc. Australia’s central bank kept interest rates on hold at a record low 2.5% yesterday as it flagged an accommodative monetary policy and stepped up its rhetoric against the local dollar. The Reserve Bank of Australia said it was prudent to maintain a “period of stability in interest rates” to support demand and growth in the economy as it shifts away from a dependence on mining. (AFP)

USA

U.S. Manufacturing Grows At Fastest Pace In Three Years. Gains in manufacturing boosted the U.S. expansion in August, led by a surge in orders for plastics and metals that powered the world’s largest economy past a global slowdown. The Institute for Supply Management’s index unexpectedly climbed to 59, the highest level since March 2011, from July’s 57.1, beating all forecasts in a Bloomberg survey of economists. The orders gauge was the strongest in a decade, the Tempe, Arizona-based group reported today. (Bloomberg)

U.S. Construction Spending Hits Highest Level In 5-1/2 Years. U.S. construction spending rebounded strongly to hit its highest level in more than 5-1/2 years in July as private construction increased and state and local government outlays surged, in a further sign of vigor in the economy. Construction spending increased 1.8% to an annual rate of $981.31bil, the highest level since December 2008, the Commerce Department said on Tuesday. July's%age increase was the largest since May 2012 and reflected gains across all categories, with the exception of federal government. It followed June's revised 0.9% decline. Economists polled by Reuters had forecast construction spending increasing 1.0% after a previously reported 1.8% drop in June. (Reuters)

Europe

UK Construction Grows At Fastest Pace For Seven Months. The construction sector expanded at its fastest pace for seven months in August, despite supply shortages holding back growth, a survey suggests. The Markit/CIPS construction Purchasing Managers' Index (PMI)surged to 64 in August from 62.4 in July, surprising economists who had forecast a fall. It is the 16th month in a row that the index has been above the 50 level indicating growth. (BBC)

Swiss Economy Unexpectedly Stalls As Euro Area Takes Toll. The Swiss economy unexpectedly stalled in the second quarter as stagnating growth in the euro area hurt exports. Swiss gross domestic product was unchanged in the three months through June from the previous quarter, when it expanded 0.5%, the State Secretariat for Economic Affairs in Bern said in a statement today. That’s the weakest quarterly reading in two years and compares with a median estimate for 0.5% growth in a Bloomberg News survey of 16 economists. (Bloomberg)

Currencies

Dollar Rises, Nears 2014 Record Against Yen. The U.S. dollar traded near its 2014 high against the yen after strong U.S. manufacturing data supported bets that the U.S. economy is healthier than that of other major developed rivals. The dollar traded at 105.11 yen Tuesday, just below the year’s high of ¥105.33. Meanwhile, the pound slumped, trading at $1.6473, down from 1.6612 Monday. The euro traded at $1.3132 Tuesday, about even with $1.3131 Monday. The euro moved up against the pound Tuesday. It traded at £0.7972, from £0.7904 Monday. (Market Watch)

Commodities

Brent Oil Sinks To 16-Month Low On Demand Fears, Strong Dollar. Brent crude oil futures fell to the lowest level in 16 months on Tuesday, pressured by the prospect of slowing oil demand growth in China and Europe, while a strong dollar and ample supplies pushed U.S. prices to a seven-month low. Brent crude for October delivery fell $2.45 to settle at $100.34 a barrel, its lowest closing price since May 1, 2013. U.S. crude dropped $3.08 from Friday's close to settle at $92.88 a barrel, the lowest since Jan. 14. (Reuter)

Gold Slides 1.7 Pct On Dollar Rally, Technical Selling. Gold fell 1.7% on Tuesday in heavy volume, its biggest one-day drop since mid-July, as a combination of a dollar rally, technical selling and a crude oil tumble sent the bullion price to a 2-1/2 month low. Spot gold was down 1.7% at $1,265.46 an ounce by 3:14 p.m. EDT (1914 GMT). Among other precious metals, spot platinum was down 0.7% at $1,406.24 an ounce, while spot silver dropped 1.6% to $19.13 an ounce, having touched a near three-month low at $19.05. Spot palladium fell 2.7% to $879.20 an ounce, after hitting a 13-1/2-year peak the previous day on concerns that unrest in Ukraine could affect supply from top producer Russia. (Reuters)