Malaysia

Industrial Production In July Saw An Annual Growth Of 0.5% YoY after gaining 7.0% in June. This is far below market estimates of 4.3%. This is the weakest annual growth since February 2013. Despite the small expansion, the 3-month moving average (3mma) saw production gaining by 4.4%, following 5.8% growth previously. On a month-on-month comparison, it fell by 3.0% MoM, reflecting the extended closures surrounding the Eid period. The seasonally adjusted index saw a similar fall of 3.8% MoM. For the first seven months of the year, production increased by an average of 4.6%, against 3.8% seen in the same period in 2013. (Please refer to Economic Viewpoint for further comments)

Mexico Sees Better Trade, Investment Ties With M’sia. Mexico, which has bilateral ties with Malaysia for 40 years, anticipates better trade and investment exchanges in the future, especially in the oil industry after it signed the law on energy sector reform last month. Mexico Ambassador to Malaysia, Carlos Isauro Felix Corona, said the new law, initiated by President Enrique Pena Nieto, would saw Mexico’s energy sector open to foreign investments for the first time since 1938. "Currently, we buy Malaysian products, mainly electrical and electronic components and car parts, worth over US$5bil per year," he said. Malaysia is Mexico’s first trade partner in South-East Asia. (Bernama)

Asia Pacific

Japan Business Mood Turns Positive: Government Survey. Confidence at big Japanese manufacturers turned positive in July-September and they expect business conditions to improve further in the following quarter, a government survey showed, suggesting a gradual economic recovery from the slump after April's sales tax hike. The survey also showed that companies are growing more positive on business investment, boding well for the government's goal of fostering a sustainable growth cycle led by pick up in business activity, higher wages and stronger consumer spending. The business survey index (BSI) of sentiment at large manufacturers stood at plus 12.7 in July-September, improving from minus 13.9 in the prior three months. The big manufacturers' sentiment index is seen improving to plus 15.1 in October-December, it showed. (Reuters)

China's Inflation Cools To Four-Month Low. China's consumer inflation rate rose 2% in August from a year earlier, below the government's target of 3.5% and marking a four-month low. The country's official consumer price index (CPI) figure is its main inflation gauge and the August figure compares with a rise of 2.3% in July. Lower prices for pork, a Chinese staple, contributed to the monthly CPI reading, state news agency Xinhua said. According to official data, the producer price index (PPI) fell by 1.2% from a year earlier, marking 30 straight months of falls. Analysts said the numbers suggested excess capacity in the industrial sector. The factory price - or wholesale price of consumer goods - gained just 0.2% for the period, but wholesale prices of production materials fell 1.7% for the month. Xinhua said the data marked existing pressures from slowing economic growth in the country. (BBC)

Indonesia Puts Interest Rate On Hold. Indonesia’s central bank held its benchmark interest rate for a 10th straight meeting to help narrow a current-account deficit, even as economic growth and inflation slow. Bank Indonesia Governor Agus Martowardojo and his board maintained the reference rate at 7.5%, the central bank said, here, yesterday. It also kept the deposit facility rate unchanged at 5.75%. Bank Indonesia has little room to adjust its benchmark rate to tackle the current-account shortfall, as economic growth in the April-June quarter slowed to the weakest since 2009. (Bloomberg)

Australia Jobs Rise By Most On Record, In Huge Surprise. Australian employment surged by the most on record in August and far beyond the most optimistic forecast, on the face of it a stunningly strong report that should calm recent concerns about the health of the economy. The local dollar leaped and markets are virtually pricing out the chance of a rate cut as Thursday's data from the Australian Bureau of Statistics showed 121,000 jobs were created in August. That was the largest rise since the series began in 1978 and dwarfed expectations for a 12,000 increase. The jobless rate also surprised by falling back to 6.1%, so reversing most of July's unexpected jump to 6.4%. Most of the gains came in part-time jobs which surged 106,700, while more people went looking for work as the participation rate jumped to a 16-month peak of 65.2%. (Reuters)

USA

U.S. Jobless Claims Hit Two-Month High, Breaking Steady Decline. The number of Americans filing for unemployment benefits unexpectedly rose last week to a two-month high, interrupting a steady decrease to the lowest level since before the last recession. Jobless claims climbed by 11,000 to 315,000 in the week ended Sept. 6, which included the Labor Day holiday, a Labor Department report showed today in Washington. It was the highest reading since June 28 and exceeded the Bloomberg survey median forecast of 300,000. The data are difficult to adjust during holiday periods, a Labor Department spokesman said as the figures were released. (Bloomberg)

U.S. Budget Gap For 11 Months Shrinks 22% As Economy Grows. The U.S. budget deficit narrowed 22% in the first 11 months of the fiscal year as accelerating economic growth boosted tax receipts, Treasury Department figures showed. The budget gap as a share of the economy is on a path to shrink this year to the lowest level since 2007, as falling unemployment and swelling corporate profits help revenues grow faster than outlays, the Congressional Budget Office said on Aug. 27. The $589.2bil shortfall from October through August compared with a $755.3bil gap in the same period a year earlier, the Treasury said today in Washington. Last month the government posted a $128.7bil deficit, $19.2bil less than the imbalance in August 2013. (Bloomberg)

Consumer Confidence In U.S. Falls To Lowest Level In Five Weeks. Consumer confidence fell to a five-week low as Americans’ views on the economy and the buying climate soured. The Bloomberg Consumer Comfort Index declined to 36.5 in the period ended Sept. 7, the worst reading since the beginning of August, from 37.7 the week before. While attitudes about personal finances hovered close to a six-year high, views on the national economy were the dimmest since early June. (Bloomberg)

Europe

Ireland Upgrades Growth Forecast, Says IMF Deal Backed. Ireland's economy is set to grow by a better-than-expected 3% this year and the government has won German backing to refinance some of its bailout loans, the country's two most senior finance officials said on Thursday. Finance Minister Michael Noonan upgraded an earlier forecast for growth of 2.1% and said the economy would also grow by 3% in 2015 after seeing unemployment fall below the euro zone average, retail sales rise and exports rebound. (Reuters)

UK Says To Sign Nearly $4bil In Trade Deals With China. Britain said on Friday that it was about to sign commercial deals with China worth more than 2.4bil pounds ($3.9bil), as finance minister George Osborne prepared to meet China's Vice Premier Ma Kai in London. Full details of the prospective transactions were not immediately available. But Britain's finance ministry said they included a $1bil joint venture with China related to a Malaysian oil terminal, and a 200mil-pound project to develop nursing homes and vocational training schools in China. Britain will also refund visa costs for up to 25,000 Chinese visitors on organized tours between 2015 and 2017. Last year China was Britain's seventh-biggest goods export market, accounting for 12.4bil pounds of exports - roughly 4% of the total. Britain imported 33.4bil pounds of goods from China over the same period. (Reuters)

Greek Unemployment Dips To 27% In June. Greece's jobless rate eased marginally to 27.0% in June from a downwardly revised 27.1% in May, Greek statistics agency ELSTAT said on Thursday. June's reading was the lowest since January 2013, when it stood at 26.8%. At more than double the euro zone average of 11.5% in July, Greece's unemployment rate remains near record highs despite signs of recovery in the economy, which is expected to emerge from recession and expand by 0.6% this year. (Reuters)

Currencies

Dollar Slips, But On Track For Ninth Week Of Gains. The U.S. dollar dipped from six-year highs against the yen on Thursday, and the dollar index fell slightly but remained on track to post its ninth consecutive week of gains. The dollar was last at 106.94 yen after earlier rising to 107.19, the highest since September 2008. The euro rose to $1.2932, up from a 14-month low of $1.2858 on Tuesday. The dollar index fell 0.06% to 84.201, but was still on track for a ninth consecutive week of gains - its longest winning streak since 1997. Sterling rose 0.15% to $1.6236 after gaining 0.7% on Wednesday after the latest poll was published. (Reuters)

Commodities

IEA Cuts Forecast On Weak Growth. The oil market has lost pace because of weak growth in Europe and slowdown in China, the International Energy Agency (IEA) said yesterday, cutting its estimates for demand. The growth in demand for oil this year and next will be markedly lower than expected, the IEA said, and this, together with plentiful supply, explains why the price of oil has fallen recently below US$100 per barrel. The IEA cut its estimate for oil demand this year to growth of one% or to 900,000 barrels per day, from a previous estimate of 1.1% or 1mil barrels per day (mbd). That takes total demand for the year to 92.6 mbd. (AFP)

Brent Oil Extends Slump To 2-Year Low; U.S. Crude Bounces. Benchmark Brent crude dropped to a two-year low on Thursday, falling for a sixth straight session as increasing supply and signs of weakening demand countered worries that conflicts in the Middle East could curb output. Brent for October was down 66 cents at $97.38 a barrel at 11:38 a.m. EDT (1538 GMT) It fell as low as $96.72, its weakest since July 2012. U.S. crude was up 35 cents at $92.17 a barrel, turning higher after sliding to $90.43, its lowest since May 2013. (Reuters)

Gold Falls To 7-1/2 Month Low As Safe-Haven Demand Fades. Gold slipped to its lowest level in 7-1/2 months on Thursday, as the dollar hovered around a 14-month high, in the wake of the easing of tension in Ukraine, dragging other precious metals broadly lower. Spot gold slipped 0.7% to $1,240.30 an ounce by 2:45 p.m. EDT (1845 GMT), having earlier reached its lowest since Jan. 23 at $1,234.71. Silver was down 1.7% at $18.58 an ounce, having touched $18.54, its lowest since July 1, 2013. Platinum fell 0.9% to $1,365.75, having reached a seven-month low of $1.360.80 an ounce, while palladium was down 2% at $829.10, after hitting a fresh 2-1/2 month low at $824.80. (Reuters)