Malaysia

Inflation Inched Up A Tad In The Month Of August, Posting A 3.3% Annual Growth after seeing a 3.2% increase in the previous month. This is just minutely above market expectations of 3.2%. This is largely on account of a rise in prices of food & beverages, as well as a transportation and housing, electricity & fuels. The core inflation (minus food & beverages) also inched up slightly to 3.3% from 3.2%. From the period of January to August, the CPI rate averaged at 3.3% compared to 1.7% seen in the same period in 2013. On a monthly comparison, inflation rose by 0.2% MoM. (Please refer to Economic Viewpoint for further comments)

Moody’s Projects Strong Growth For M’sia. Moody’s Investor Service has projected that the Malaysian economy would expand by 6% this year and 5% in 2015, driven by its relative diversification and continuing regional economic integration. “These projections are stronger than the median growth forecast of 2.9% and 3.3% projected for A-rated countries in those respective years. “We expect Malaysia to sustain higher growth in the medium-term compared with most rating peers. Its robust growth performance and outlook supports creditworthiness,” it said in its credit analysis report titled “Government of Malaysia”. The rating agency’s assessment of Malaysia’s economic strength as “High (+)” underscored the large-scale and diversification of the country’s output, its strong medium-term growth prospects and competitiveness, and its ample natural resources. (Bernama)

Malaysia’s Current Account Surplus, Liquidity Can Absorb External Financial Shocks: Moody’s. The current account surplus and its ample domestic liquidity serve as “buffers” to potential external financial shocks to Malaysia, said Moody’s Investors Service. While the foreign share in domestic government bond markets continues to rise, the potential for interest rate volatility in the event of an outflow is mitigated by the presence of large domestic institutional investors. In its latest report to its investors, Moody’s noted that Malaysia's financial system continues to provide sound institutional and liquidity support, while its capital structure and funding base pose very low contingent risk to the sovereign. (NST)

Asia

Business Sentiment In Asia Falls Sharply In Q3. Business sentiment among Asia's top companies fell sharply in the third quarter as last quarter's positive signs from China and Singapore slipped on an uncertain global economic outlook and rising costs, outweighing continued optimism in India, a Thomson Reuters/INSEAD survey showed. The Thomson Reuters/INSEAD Asia Business Sentiment Index fell to 66 in the third quarter of this year from 74 in the second quarter. It’s the steepest decline in three years. A reading above 50 indicates an overall positive outlook. Sentiment among South-East Asian businesses was mostly stable, with Thailand edging down 90 from 91; Philippines at 83 from 100; Singapore at 50 from 67, and Malaysia holding at 67. (NST)

China's Central Bank Said To Inject $81bn Into System. China's central bank is said to be injecting 500bn yuan ($81bn) into the five biggest state-owned banks to counter slowing growth in the world's second-largest economy. The People's Bank of China (PBOC) is reportedly giving each bank a $100bn low-interest loan over three months. The move may be the first of several stimulus measures, analysts say. It is aimed at lifting business confidence and investment following a string of weak economic data. (BBC)

S’pore August Exports Higher Than Forecast. Exports last month rose more than expected thanks to a jump in chemical product shipments, although exports to major markets slowed in a sign that the city-state’s economy is being hobbled by an uneven global recovery. Non-oil domestic exports increased six% last month from a year earlier, trade agency International Enterprise Singapore said in a statement yesterday. That compared with a 2.6% growth forecast in a Reuters poll, and a 3.3% decline in July. (Reuters)

Thailand Holds Rate A Fourth Time As State Spending Boosted. Thailand kept its key interest rate unchanged for a fourth straight meeting to support the economy as Prime Minister Prayuth Chan-Ocha’s newly appointed cabinet increases spending to spur growth. The Bank of Thailand held its one-day bond repurchase rate at 2%, with monetary policy committee members voting 5-0 in favor, it said in Bangkok today. All 21 economists in a Bloomberg News survey predicted the decision, which extends a pause since March. The parliament yesterday approved a budget proposal of 2.58tril baht ($80bil) for fiscal year 2015, and Prayuth has ordered state agencies to frontload spending from the first quarter to boost local demand. Finance Minister Sommai Phasee said this week monetary policy is “quite balanced,” and that he expects to work “smoothly” with the central bank. (Bloomberg)

USA

US Fed Offers No Hint On Rate Rise As Stimulus Ends. The US Federal Reserve has reiterated that it will raise interest rates once a "considerable time" has passed after its stimulus programme ends in October. The announcement came at the end of a two-day meeting of the central bank's policy committee in Washington DC. In a press conference, Fed chairwoman Janet Yellen disappointed some when she said there was no "calendar date" for a rate rise. Wednesday's announcement of the end of the stimulus programme, known as quantitative easing, was widely expected. (BBC)

Homebuilder Confidence In U.S. Increases To A Nine-Year High. Confidence among U.S. homebuilders rose in September to a nine-year high, showing the industry is gaining ground and will be a source of momentum for the economy. The National Association of Home Builders/Wells Fargo sentiment measure climbed to 59 exceeding the highest estimate in a Bloomberg survey of economists, from 55 in August, the Washington-based group reported today. Readings above 50 mean more respondents said conditions were good. (Bloomberg)

U.S. Current Account Gap Narrows In The Second Quarter. The U.S. current account deficit unexpectedly narrowed in the second quarter, supported by a partial reversal of a large equity disinvestment that had occurred in the previous quarter. The Commerce Department said on Wednesday the current account gap, which measures the flow of goods, services and investments into and out of the country, fell to $98.51bil from a revised $102.11bil shortfall in the first quarter. That was the smallest gap since the fourth quarter of 2013. Economists polled by Reuters had forecast the deficit widening to $114.0bil from a previously reported $111.2bil shortfall in the first three months of the year. (Reuters)

Europe

Eurozone Inflation Revised To 0.4%. The eurozone inflation rate held steady at 0.4% in August, slightly higher than the original estimate of 0.3%, revised Eurostat figures show. The revision means that the rate was unchanged from July's 0.4%. However, it is still much lower than August 2013's figure of 1.3%. Earlier this month, the European Central Bank (ECB), which has an inflation target of 2%, cut its benchmark interest rate to 0.05% and introduced new stimulus measures. Under its asset purchase programme, it will buy debt products from banks, in an effort to add liquidity to the financial system and revive lending. (BBC)

European Union Car Sales Continue Recovery. European Union new car registrations showed continued signs of recovery in July and August, industry figures show. Sales of new cars were 5.6% higher in July compared to the same month last year, and 2.1% up in August, the Association of European Automobile Manufacturers (ACEA) said. France was the only market to contract in July, with sales falling 4.3%. But in August, even Germany, the EU's leading market, saw sales fall 0.4% compared to the same month last year. Overall, sales grew 6% in the first eight months of the year, said ACEA, "continuing the upward trend that began 12 months ago". This equates to 8,336,159 new car registrations over the period. (BBC)

UK Jobless Rate Falls To Lowest Level Since 2008. The unemployment rate fell to 6.2% over the three months to the end of July, its lowest level since 2008, official figures show. The number of jobless people fell by 146,000 to 2.02 million over the quarter, the Office for National Statistics (ONS) reported. Those claiming Jobseeker's Allowance in August fell below one million for the first time in six years. But average weekly earnings still lagged way behind inflation. Excluding bonuses, average earnings in the May to July period rose by 0.7% from a year earlier; including bonuses, they rose by 0.6%. The current rate of inflation is 1.5%. (BBC)

Currencies

Dollar Barrels Higher As Fed Boosts Rate Forecasts. The dollar barreled higher Wednesday, extending gains versus the Japanese yen and the euro as an eagerly awaited policy statement by the Federal Reserve and comments by Chairwoman Janet Yellen did little to dissuade traders the central bank will move more quickly than previously thought to raise interest rates after its bond-buying program comes to an end. The dollar traded at 108.30 yen, compared with ¥107.13 late Tuesday in New York and up from around ¥107.60 ahead of the Fed announcement. Meanwhile, the euro changed hands at $1.2867, down from $1.2960. The ICE dollar index a measure of the U.S. currency against a basket of six major rivals, traded at 84.596, a gain of 0.6%. The British pound traded at$1.6280, little changed from $1.6277 late Tuesday. (Market Watch)

Commodities

Oil Steadies Around $99 On Possible OPEC Output Cut. Brent crude oil steadied at around $99 per barrel on Wednesday, after jumping on Tuesday on hopes the Organization of the Petroleum Exporting Countries (OPEC) would help reduce a global supply glut by cutting output. Brent was up 23 cents at $99.28 a barrel by 1330 GMT, after closing up $2.40 in the previous session, the biggest daily gain since Sept. 3. U.S. crude was down 21 cents to $94.67 after rising 2.1% on Tuesday. (Reuters)

Gold Prices Fall Over 1 Pct To New 8-Month Lows After FOMC. Gold prices fell more than 1% to fresh eight-month lows on Wednesday as the dollar rallied and investors worried about forecasts that the U.S. Federal Reserve may be readying for faster pace of interest rate hikes than previously projected. Ending two straight days of gains, spot gold was down 1.0% at $1,223.78 an ounce by 4:46 p.m. EDT (2046 GMT). Among other precious metals, silver was down 1.23% at $18.57 an ounce. Platinum dropped 0.84% to $1,356.25 an ounce, while palladium also fell 0.8% to $838.25.50. (Reuters)