Malaysia

Zeti: Malaysia’s GDP Growth To Exceed 5.5% In 2014. The robust growth pace of 6.3% in the first half of the year will enable the Malaysian economy to exceed 5.5% in 2014, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. The central bank has an initial growth forecast of 5 to 5.5% this year but said there would be a revision following the GDP performance of the first quarter (6.2%) and second quarter (6.4%). She also said the monetary policy is currently supportive of the economy. “We will review conditions on the outlook for inflation and growth and look at the nature (of outlook) - whether it is transitory or temporary or permanent and risk of destabilising financial imbalances - these are factors which will be taken into consideration,” she said. (NST)

Zeti: Financial Institutions Must Serve Public Interest. Bank Negara Malaysia (BNM) has reminded financial institutions of their need to serve the public interest given the importance of a well-functioning financial system in the economy. BNM Governor Tan Sri Dr Zeti Akhtar Aziz said on Wednesday public interest was crucial even as financial institutions seek to create value for shareholders, especially after the 2008 Financial Crisis. “In a highly interconnected global economy with greater international financial inter-linkages, financial turmoil and stress in national financial systems will have ramifications that transcend borders,” she said at the establishment of the Financial Services Professional Board (FSPB) here. She pointed out that the 2008 Financial Crisis highlighted how business decisions predominantly driven by short-term incentives critically undermined the health of some of the largest global companies. (The Star)

Asia

Japan Sept Flash Manufacturing PMI Falls To 51.7, Output At Six-Month High. Japanese manufacturing activity eased slightly in September but output rose at the fastest pace in six months, a preliminary survey showed on Wednesday, suggesting industrial production is stabilising after a sharp slump in demand following a sales tax increase in April.The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.7 in September from a final reading of 52.2 in August. The index remained above the 50 threshold that separates expansion from contraction for a fourth straight month. The output component of the flash PMI index rose to 53.4 from a final 52.9 in August to reach the highest level in six months. (Reuters)

China Has Many Tools To Keep Growth Well Above 7% Next Year: IMF. China has many tools to keep growth well above 7% next year, the International Monetary Fund said on Wednesday, downplaying the risks of the cooling property market in the world's second-largest economy. Economic growth in China will likely be "well above" 7% next year, Changyong Rhee, director of the Asia and Pacific department at the IMF, told a briefing in Manila. The IMF has a 7.4% growth forecast for China for 2014, slightly below the government's official target of around 7.5%. (Reuters)

Trade And Investment Growth Slow In Asia Pacific. Total exports and imports from Asia-Pacific grew by 2% in 2013 and were weak in the first half of 2014, according to the Asia-Pacific Trade and Investment Report 2014 released today. The report, published by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), said growth in 2015 was expected to increase to 7%, but considerable uncertainties in global macro-economic prospects meant this was far from assured. (Bernama)

Americas

Sales Of New U.S. Homes Surged In August To Six-Year High. New-home sales in the U.S. surged in August to the highest level in more than six years, a sign that the housing recovery is making progress. Purchases of new houses jumped 18% to a 504,000 annualized pace, the strongest since May 2008 and surpassing the highest forecast in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The one-month increase was the biggest since January 1992. (Bloomberg)

U.S. Mortgage Applications Fall In Latest Week: MBA. Applications for U.S. home mortgages fell last week as interest rates edged up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, declined 4.1% in the week ended Sept. 19. The MBA's seasonally adjusted index of refinancing applications fell 7.0%, while the gauge of loan requests for home purchases, a leading indicator of home sales, dipped 0.3%. (Reuters)

Argentina Says Economy Grows In Second Quarter, Exiting Recession. Argentina's economy pulled out of recession in the second quarter, official data showed on Wednesday, though the government still faces soaring inflation and a slumping currency after its July debt default. The Indec statistics agency reported gross domestic product grew 0.9% compared to the first three months of the year. On a year-on-year basis economic growth was unchanged though. Argentina's soybean and corn harvests, which peak in the second quarter, had been expected to boost economic activity, though some economists had anticipated a third consecutive quarterly contraction. (Reuters)

Europe

German Business Confidence Falls Further, Ifo Survey Finds. Europe's largest economy has shown further signs of fragility, as a key indicator of German business confidence fell for a fifth successive month. The Ifo think tank's Business Climate Index dropped to 104.7, slightly below analysts' expectations, and the lowest reading since April last year. "The German economy is no longer running smoothly," Ifo said, but added that it still expected gross domestic product (GDP) to grow in 2014. GDP shrank by 0.2% in the last quarter. (BBC)

Bank Of Spain Says Domestic Demand Surge Likely To Slow In Third Quarter. Growth in private consumption and new job creation, fundamental factors in the turnaround in Spain's crisis-torn economy, are showing signs of slowing in the third quarter, the country's central bank said on Wednesday. "The most recent information, referring to the third quarter, seems to indicate private demand was less expansive," the Bank of Spain said in its monthly report. "In the case of domestic consumption, opinion polls and retail sale indicators are, on average in July and August, below levels seen in the second quarter." (Reuters)

Currencies

Dollar Rises Against Rivals On Home-Sales Data. The dollar rose against most of its rivals after data released by the U.S. Department of Commerce showed that new-home sales surged to a six-year high in August, beating expectations. The dollar traded at 108.86 yen Wednesday, compared with ¥108.80 late Tuesday in New York, recovering after the greenback recorded a bout of selling in early Asia trade. The ICE U.S. Dollar Index, a measure of the greenback’s strength against six rival currencies, was at 84.9630 Wednesday, compared to 84.6580 late Tuesday. The German Ifo survey of business sentiment, released Wednesday, fell to a 17-month low in August, sending the euro to a 14-month low of $1.2774 as investors worried that Germany’s economic recovery had stalled. (Market Watch)

Commodities

Oil Hits Two-Year Low Under $96 As Libyan Output Returns. Brent crude oil futures dropped below $96 a barrel on Wednesday to a two-year low as rising supply from Africa and Iraq offset mounting tensions in the Middle East and stronger-than-expected growth expectations in China. Brent crude for November delivery was down 70 cents at $96.15 a barrel by 12:51 EDT (1651 GMT) after hitting a session low of $95.60, its lowest since July 2012. It was down more than 6.5% for the month so far, the biggest monthly drop since April 2013. U.S. crude rose by 8 cents to $91.64 a barrel as the unexpected drawdown in weekly U.S. stocks offset earlier losses that had dragged it down to $91.12. The spread between the two benchmarks stood at $4.51 after narrowing to $4.09 earlier in the session, the second-narrowest intraday point since April. (Reuters)

Gold Falls On Economic Optimism; Dollar Hits 4-Year Highs. Gold fell on Wednesday as the dollar climbed to levels not seen in four years and global shares rebounded, while investors remained cautious ahead of U.S. economic data due later in the week. Spot gold, stronger initially, fell to a session low of $1,215.60 an ounce. Spot gold, stronger initially, fell to a session low of $1,215.60 an ounce. Silver fell 0.7% to $17.62 an ounce after slipping to a four-year low of $17.30 on Monday. Platinum was down 0.9% at $1,312 an ounce, and palladium gained 0.1% to $812.60 an ounce. (Reuters)