Malaysia

Exports In July Increased By Just 0.6% YoY, considerably slower than June’s pace of 7.9%. It is also below consensus’ mean of 5.3%. This is due to a shorter working month on account of extended closures during the Eid period. Furthermore, the base effect appears to be wearing off as seen on the monthly comparison, which showed that exports growth contracted at a smaller pace of -0.2% MoM, compared to -5.5% previously, yet managing only a meager annual growth. For a more accurate gauge, the seasonally adjusted term saw exports rising by just 0.4%. Imports also disappointed, falling by 0.7% YoY versus market poll of 5.5%. It had gained 8.9% in June. Month-on-month comparison on the other hand saw imports expanding by 0.6% MoM after falling by 3.5% previously. The seasonally adjusted term saw a 3.3% increase. Due to weaker exports, trade surplus narrowed to RM3.6b from RM4.1b, the smallest surplus since July 2013. (Please refer to Economic Viewpoint for further comments)

Household Incomes On The Rise. The preliminary report of the 2014 Household Income Survey undertaken by the Government indicates that the people are now enjoying a better standard of living – with the average household income surpassing RM5,900 a month. Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said this was significantly better compared with the findings in 2012, which put the average household income at RM5,000 a month. “However, growing the economy alone is not enough because we must also ensure that it is being felt by the people in terms of higher wages. “But it must be parallel with productivity (growth),” he told reporters on the sidelines of the Global Economic Symposium 2014 here yesterday. The ratio of wages to GDP in Malaysia grew to 33.6% last year from 29.3% in 2008. (Bernama)

Asia

China Eases Credit Rules For Some Property Developers. China is easing rules to allow some listed property developers to raise funds in the interbank bond market, the latest move in an effort to speed up consolidation in the country's fragmented housing market. China's financial regulators are allowing "well-known, well-established, highly regarded real-estate companies" to issue midterm notes in the interbank market with fewer restrictions, said two people with knowledge of the matter. The interbank market, China's major bond market, is where the central government, banks and large enterprises borrow to meet their daily needs, and it offers a relatively cheap and more reliable source of funds than direct loans from banks. (WSJ)

Americas

U.S. Job Growth Brakes To Eight-Month Low, Labor Force Shrinks. U.S. employers hired the fewest number of workers in eight months in August and more Americans gave up the hunt for jobs, providing a cautious Federal Reserve with more reasons to wait longer before raising interest rates. Nonfarm payrolls increased 142,000 last month after expanding by 212,000 in July, the Labor Department said on Friday. The jobless rate fell one-tenth of a percentage point to 6.1 %, but that was partly because people dropped out of the labor force. The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell to 62.8 % in August from 62.9 % in July. Before the United States fell into recession, it stood at 66.0 %. (Reuters)

Mexico Keeps Key Rate At Record Low 3% On Growth Outlook. Mexico’s central bank kept its key interest rate unchanged at a record low after forecasting that faster economic growth won’t prevent inflation from slowing toward target. Banco de Mexico’s board, led by Governor Agustin Carstens, kept the overnight rate at 3 %, a move forecast by all 23 economists surveyed by Bloomberg. (Bloomberg)

Europe

German Industrial Production Jumped 1.9% In July. German industry has posted its strongest month in almost two and a half years. The Economy Ministry said industrial production was up 1.9% in July, lifted by an increase in manufacturing and construction output. It is a big improvement from June when industrial production rose just 0.4%. It is another piece of strong data from Germany. On Thursday data showed that industrial orders rose at the strongest rate in the more than a year in July. (BBC)

Greek PM Announces Cuts To Crisis-Era Taxes. Greek Prime Minister Antonis Samaras announced cuts on Saturday to unpopular taxes introduced at the height of Greece's debt crisis, in a bid to show that over four years of austerity are finally nearing an end. Samaras, whose conservative party trails the anti-austerity, radical leftist Syriza party in opinion polls, said a heating oil consumption tax would be cut by 30 % and a "solidarity tax" would also be reduced. Buoyed by improved investor confidence and signs of economic stabilization, Samaras has pushed EU and IMF lenders to start rolling back austerity demands to help kickstart growth and preserve Greece's fragile political stability. (Reuters)

Cyprus Parliament Adopts Foreclosure Bill. The Cypriot parliament adopted Saturday a controversial bill to streamline bank foreclosures of bad debts, clearing the way for international lenders to release the next tranche of a 10bil euro loan. The emergency vote came a day after a deadline set by the so-called troika of lenders, who bailed Cyprus out last year and had warned that the next tranche, 436mil euros (US$565mil), would be withheld unless the bill was passed. The new law ensures that foreclosures cannot be indefinitely delayed, reducing the process from years to months, establishing procedures for valuating properties and auctioning them. (AFP)

IMF's Lagarde Urges France To Speed Up Structural Reforms. The head of the International Monetary Fund (IMF) is urging France to speed up structural reforms to bolster economic growth and warning against using weak inflation as an excuse to relax public deficit reduction efforts. In an interview with French daily Les Echos to be published on Monday, IMF Managing Director Christine Lagarde said the French government must implement "truly, rapidly and fully structural reforms likely to generate growth". "Even if inflation is weaker than expected, it cannot be used as a screen to postpone the necessary efforts on (public) spending", she added. (Reuters)

Falling Investment, Inventories, Stall Euro Zone Recovery In Q2. Falling investment and a drop in inventories kept euro zone gross domestic product flat in the second quarter against the previous three months despite growing household consumption and a positive contribution from trade, data showed on Friday. The European Union's Statistics Office confirmed its earlier estimate that the output of the 18 countries using the euro was unchanged in the April-June period quarter-on-quarter, although it rose 0.7 % year-on-year. Eurostat data showed a drop in inventories subtracted 0.2 %age points from the overall result in the second quarter, offsetting a 0.2 point positive contribution from household consumption. Falling investment subtracted 0.1 point, offsetting a positive contribution from next trade of the same size. (Reuters)

Currencies

Dollar Falls After Jobs Report; Euro Still Near 14-Month Low. The dollar dropped against most major rivals on Friday in the wake of a worse-than-expected jobs report, though it erased some losses by day’s end and still gained for the week. The shared currency was recently at $1.2956, up from $1.2944 in late North American trade on Thursday. Meanwhile, the dollar fell against the yen to buy ¥105.07, from ¥105.26 late Thursday in New York. The pound declined to trade at $1.6326, compared with $1.6344 on Thursday. The ICE dollar index which tracks the U.S. currency against a basket of major rivals, traded recently at 83.753, down from 83.820 late Thursday in New York. The index still gained for the week, rising from 82.721 on Aug. 29. (Market Watch)

Commodities

Oil Falls As Weak U.S. Jobs Data Adds To Demand Worries. Crude oil futures fell on Friday and ended the week more than 2 % lower as disappointing jobs data from the United States cast doubt about the strength of economic growth in the world's biggest oil-consuming economy. Brent crude for October delivery fell $1.01 to settle at $100.82 a barrel, having dropped to $100.35 intraday. The last time Brent was priced under $100 was in June 2013. U.S. October crude fell $1.16 at settle at $93.29 a barrel. (Reuters)

Gold Up As U.S. Payrolls Misses Forecasts. Gold prices rose on Friday, recovering from their lowest in nearly three months hit earlier in the session, after disappointing U.S. payrolls data tempered speculation that the Federal Reserve will raise interest rates any time soon. Spot gold was up 0.4 % at $1,266.05 an ounce by 2:21 p.m. EDT (1821 GMT), having earlier risen as high as $1,273.45. Among other precious metals, silver was up 0.6% to $19.12 an ounce, while platinum edged down 0.2% to $1,401.80 an ounce and palladium gained 0.4% to $887.25 an ounce. (Reuters)