Malaysia

Money Supply Moderated As Loans Growth Remained Steady. Money supply in August moderated to 4.8% following a 5.7% gain previously. Loans growth on the other hand, kept steady at 8.6%. Consumption continues to taper as high costs kept spending at bay despite the season. At the same time, the lack of Merdeka and Eid festivities in respect of the MH17 tragedy also paid a contributing factor in August. (Please refer to Economic Viewpoint for further comments)

Bank Negara: International Reserves Remain Usable And Unencumbered. The detailed breakdown of Malaysia’s international reserves under the International Monetary Fund’s Special Data Dissemination Standard (IMF SDDS) format indicates that as at end-August, the country’s reserves remain usable and unencumbered. Earlier this month, Bank Negara reported Malaysia’s international reserves stood at US$132b as at Aug 29. It said the reserves position was sufficient to finance nine months of retained imports and was 1.2 times the short-term external debt. (Bernama)

Asia

China Factory Gauge Falls From Initial Reading. A Chinese manufacturing gauge fell from an initial reading a week ago as a property slump weighs on the world’s second-largest economy. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics for September was at 50.2, lower than the preliminary figure of 50.5 and unchanged from August. Numbers above 50 signal expansion. The Hang Seng Index in Hong Kong extended losses after the report. (Bloomberg)

China Eases Property Restrictions Amid Growth Concern. Chinese policy makers eased property restrictions for the first time since the global financial crisis as a real-estate slump’s threat to economic growth overtakes worries about housing affordability. People applying for a loan to buy a second home may get lower down payments and mortgage rates that were previously only available to first-time home buyers so long as they have paid off their initial mortgage, the People’s Bank of China said in a statement on its website yesterday. The central bank also eased a ban on mortgages for people buying a third home. (Bloomberg)

Rajan Holds Rate For Fourth Meeting In India Inflation Fight. India’s central bank left interest rates unchanged for a fourth straight meeting, continuing a fight against Asia’s fastest inflation as Prime Minister Narendra Modi takes steps to revive the manufacturing sector. Governor Raghuram Rajan kept the benchmark repurchase rate at 8%, the Reserve Bank of India said in a statement in Mumbai today, a move predicted by all 51 economists in a Bloomberg survey. While the near-term consumer price inflation outlook is balanced “with a slant to the downside,” risks to the January 2016 target of 6% are “still to the upside, though somewhat lower than in the last policy statement.” (Bloomberg)

Americas

Consumer Confidence In U.S. Decreases To A Four-Month Low. Confidence among U.S. consumers unexpectedly declined in September to a four-month low as Americans’ views of the labor market deteriorated. The Conference Board’s index decreased to 86 this month, weaker than the most pessimistic forecast in a Bloomberg survey of economists, from an August reading of 93.4 that was the strongest since October 2007, the New York-based private research group said today. The median forecast called for 92.5. The monthly decline was the biggest since October, when a partial shutdown of the federal government weighed on confidence. (Bloomberg)

Canada’s Economy Unexpectedly Stalled In July On Oil. Canada’s gross domestic product was little changed in July as a drop in oil and gas production offset gains in manufacturing. Output remained close to an annualized C$1.63 trillion ($1.46 trillion) in July following six monthly increases, Statistics Canada said today in Ottawa. The median forecast in a Bloomberg economist survey with 14 responses was for output to expand 0.3%. (Bloomberg)

Brazil Government Deficit Spending Leaps As Election Nears. Brazil posted its fourth straight monthly primary budget deficit in August, making it nearly impossible for President Dilma Rousseff's administration to achieve a key fiscal target this year as spending picks up before next month's elections. The consolidated public sector primary deficit BRPSPS=ECI reached 14.460b reais ($5.89b) in August, the biggest for that month since at least 2001 and a far wider gap than the 5.1b reais expected by the market, central bank data showed on Tuesday. (Reuters)

Europe

Eurozone Inflation Slows To Five-Year Low In September. Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years. Consumer price inflation rose by just 0.3% compared to the same month last year, slowing from August's 0.4% rise, said EU statistics agency Eurostat. It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral. Inflation has been persistently below the European Central Bank's (ECB) 2% target rate. Eurostat said falls in the prices of unprocessed food and energy had driven the overall slowdown. (BBC)

Italy Cuts Growth Forecasts, Delays Balanced-Budget Target. Italy’s government cut its growth forecast for this year and next and pushed back its structural balanced-budget target by one year as the economy remains in a recession. “The economic outlook has greatly deteriorated,” Finance Minister Pier Carlo Padoan said at a press conference in Rome as he presented the plan yesterday. The government now sees gross domestic product shrinking 0.3% this year, compared with an increase of 0.8% predicted in April. Its plan envisages a slower-than-expected recovery in 2015, with GDP expanding 0.6% compared with a previous estimate of 1.3%. (Bloomberg)

Record French Debt Burden Adds To Strain On Public Finances. France's national debt hit a record high in the second quarter, data showed on Tuesday, underlining the country's struggle to rein in public finances a day before the 2015 budget is presented. Topping two trillion euros ($2.53 trillion) for the first time, the national debt rose to 95.1% of annualized economic output in the second quarter from 94.0% in the first quarter, the official statistics agency INSEE said. (Reuters)

UK Economy Grew 0.9% In Second Quarter, Says ONS. UK economic growth has been revised up to 0.9% for the second quarter of the year by the Office for National Statistics (ONS), compared with a previous estimate of 0.8%. UK GDP was 3.2% higher in the second quarter compared with a year earlier. Revised ONS figures also show the UK economy surpassed its pre-recession peak in the third quarter of 2013. Previously, this was thought to have been achieved in the second quarter of 2014. Growth in the second quarter of the year was boosted by a 1.1% rise in output from the services industry. The contribution from construction was revised up sharply to show 0.7% growth compared with a previous estimate of zero growth. (BBC)

U.K. Consumer Confidence In Stasis As Recovery Impact Hits Limit. Britain’s strengthening economic recovery has reached the limit of how much it can lift the mood of consumers, according to GfK NOP Ltd. The research group’s household-sentiment index fell to minus 1 this month from 1 in August. A measure of consumers’ outlook for their personal finances dropped to the lowest this year, GfK said. On the outlook for the personal finances, GfK’s index fell to 1 his month from 5 in August, the lowest since December. The outlook for the economy also dropped, by 7 points to 4. (Bloomberg)

U.K. Home Prices Post First Drop In 17 Months As Outlook Clouds. U.K. house prices fell for the first time in almost a year and a half in September, adding to evidence the property market is softening. Prices slipped 0.2% from August to an average 188,374 pounds ($306,700), Nationwide Building Society said today in an e-mailed statement. The annual rate of growth slowed to 9.4% from 11%. The data underscore signs of a moderation in the U.K. market after the Bank of England tightened loan criteria to limit risks to financial stability and new mortgage checks came into force. (Bloomberg)

Currencies

Dollar Index Sees Biggest Quarterly Rise Since 2008. The U.S. currency gained ground on the yen and the euro Tuesday, cementing the strongest quarterly rise for the ICE dollar index since a haven-inspired surge into the greenback during the height of the financial crisis. The index rose 0.4% to 85.916. The index, which measures the dollar against six major rivals, posted a 7.7% quarterly rise, the largest since a 9.6% jump in the third quarter of 2008, according to FactSet data. The dollar reversed early weakness versus the Japanese yen to trade at ¥109.64 versus a level of ¥109.50 late Monday in New York. The euro fell to $1.2631 from $1.2685, slipping as data showed annual euro-zone inflation fell to 0.3%, a five-year low. (Market Watch)

Commodities

Oil Drops To Two-Year Lows, Capping Quarter-Long Rout. World oil prices tumbled to their lowest in more than two years on Tuesday, with U.S. crude posting its biggest daily decline since 2012, as a drop in gasoline prices and end-of quarter selling capped three months of steep losses. Brent for November delivery fell $2.53 to settle at$94.67 a barrel, its lowest since June 2012. The drop marked a 16% loss for the quarter, the biggest in two years. Brent has fallen 19% since mid June, putting the benchmark near bear market territory. U.S. crude dropped $3.41 to $91.16 a barrel, its biggest oneday loss since November 2012. U.S. crude ended down 12% for the quarter, also its biggest quarterly loss in two years. (Reuters)

Gold Posts First Quarterly Loss This Year As Dollar Soars. Gold fell to a nine-month low on Tuesday as the dollar surged and commodities led by crude oil tumbled on expectations of further gains in the U.S. currency. Spot gold was down 0.5% at $1,209.30 an ounce by 2:41 p.m. EDT (1841 GMT). Lower gold prices dragged other precious metals down, with silver fell 2.8% to $16.98, having earlier hit $16.83, its lowest since March 2010. Platinum was down 0.1% at $1,298.50 an ounce and set for a 12% quarterly drop. Palladium fell 2.3% to $768.10 an ounce, having touched a fivemonth low earlier and posted a 14% monthly loss, its biggest since September 2011. (Reuters)Malaysia

Money Supply Moderated As Loans Growth Remained Steady. Money supply in August moderated to 4.8% following a 5.7% gain previously. Loans growth on the other hand, kept steady at 8.6%. Consumption continues to taper as high costs kept spending at bay despite the season. At the same time, the lack of Merdeka and Eid festivities in respect of the MH17 tragedy also paid a contributing factor in August. (Please refer to Economic Viewpoint for further comments)

Bank Negara: International Reserves Remain Usable And Unencumbered. The detailed breakdown of Malaysia’s international reserves under the International Monetary Fund’s Special Data Dissemination Standard (IMF SDDS) format indicates that as at end-August, the country’s reserves remain usable and unencumbered. Earlier this month, Bank Negara reported Malaysia’s international reserves stood at US$132b as at Aug 29. It said the reserves position was sufficient to finance nine months of retained imports and was 1.2 times the short-term external debt. (Bernama)

Asia

China Factory Gauge Falls From Initial Reading. A Chinese manufacturing gauge fell from an initial reading a week ago as a property slump weighs on the world’s second-largest economy. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics for September was at 50.2, lower than the preliminary figure of 50.5 and unchanged from August. Numbers above 50 signal expansion. The Hang Seng Index in Hong Kong extended losses after the report. (Bloomberg)

China Eases Property Restrictions Amid Growth Concern. Chinese policy makers eased property restrictions for the first time since the global financial crisis as a real-estate slump’s threat to economic growth overtakes worries about housing affordability. People applying for a loan to buy a second home may get lower down payments and mortgage rates that were previously only available to first-time home buyers so long as they have paid off their initial mortgage, the People’s Bank of China said in a statement on its website yesterday. The central bank also eased a ban on mortgages for people buying a third home. (Bloomberg)

Rajan Holds Rate For Fourth Meeting In India Inflation Fight. India’s central bank left interest rates unchanged for a fourth straight meeting, continuing a fight against Asia’s fastest inflation as Prime Minister Narendra Modi takes steps to revive the manufacturing sector. Governor Raghuram Rajan kept the benchmark repurchase rate at 8%, the Reserve Bank of India said in a statement in Mumbai today, a move predicted by all 51 economists in a Bloomberg survey. While the near-term consumer price inflation outlook is balanced “with a slant to the downside,” risks to the January 2016 target of 6% are “still to the upside, though somewhat lower than in the last policy statement.” (Bloomberg)

Americas

Consumer Confidence In U.S. Decreases To A Four-Month Low. Confidence among U.S. consumers unexpectedly declined in September to a four-month low as Americans’ views of the labor market deteriorated. The Conference Board’s index decreased to 86 this month, weaker than the most pessimistic forecast in a Bloomberg survey of economists, from an August reading of 93.4 that was the strongest since October 2007, the New York-based private research group said today. The median forecast called for 92.5. The monthly decline was the biggest since October, when a partial shutdown of the federal government weighed on confidence. (Bloomberg)

Canada’s Economy Unexpectedly Stalled In July On Oil. Canada’s gross domestic product was little changed in July as a drop in oil and gas production offset gains in manufacturing. Output remained close to an annualized C$1.63 trillion ($1.46 trillion) in July following six monthly increases, Statistics Canada said today in Ottawa. The median forecast in a Bloomberg economist survey with 14 responses was for output to expand 0.3%. (Bloomberg)

Brazil Government Deficit Spending Leaps As Election Nears. Brazil posted its fourth straight monthly primary budget deficit in August, making it nearly impossible for President Dilma Rousseff's administration to achieve a key fiscal target this year as spending picks up before next month's elections. The consolidated public sector primary deficit BRPSPS=ECI reached 14.460b reais ($5.89b) in August, the biggest for that month since at least 2001 and a far wider gap than the 5.1b reais expected by the market, central bank data showed on Tuesday. (Reuters)

Europe

Eurozone Inflation Slows To Five-Year Low In September. Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years. Consumer price inflation rose by just 0.3% compared to the same month last year, slowing from August's 0.4% rise, said EU statistics agency Eurostat. It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral. Inflation has been persistently below the European Central Bank's (ECB) 2% target rate. Eurostat said falls in the prices of unprocessed food and energy had driven the overall slowdown. (BBC)

Italy Cuts Growth Forecasts, Delays Balanced-Budget Target. Italy’s government cut its growth forecast for this year and next and pushed back its structural balanced-budget target by one year as the economy remains in a recession. “The economic outlook has greatly deteriorated,” Finance Minister Pier Carlo Padoan said at a press conference in Rome as he presented the plan yesterday. The government now sees gross domestic product shrinking 0.3% this year, compared with an increase of 0.8% predicted in April. Its plan envisages a slower-than-expected recovery in 2015, with GDP expanding 0.6% compared with a previous estimate of 1.3%. (Bloomberg)

Record French Debt Burden Adds To Strain On Public Finances. France's national debt hit a record high in the second quarter, data showed on Tuesday, underlining the country's struggle to rein in public finances a day before the 2015 budget is presented. Topping two trillion euros ($2.53 trillion) for the first time, the national debt rose to 95.1% of annualized economic output in the second quarter from 94.0% in the first quarter, the official statistics agency INSEE said. (Reuters)

UK Economy Grew 0.9% In Second Quarter, Says ONS. UK economic growth has been revised up to 0.9% for the second quarter of the year by the Office for National Statistics (ONS), compared with a previous estimate of 0.8%. UK GDP was 3.2% higher in the second quarter compared with a year earlier. Revised ONS figures also show the UK economy surpassed its pre-recession peak in the third quarter of 2013. Previously, this was thought to have been achieved in the second quarter of 2014. Growth in the second quarter of the year was boosted by a 1.1% rise in output from the services industry. The contribution from construction was revised up sharply to show 0.7% growth compared with a previous estimate of zero growth. (BBC)

U.K. Consumer Confidence In Stasis As Recovery Impact Hits Limit. Britain’s strengthening economic recovery has reached the limit of how much it can lift the mood of consumers, according to GfK NOP Ltd. The research group’s household-sentiment index fell to minus 1 this month from 1 in August. A measure of consumers’ outlook for their personal finances dropped to the lowest this year, GfK said. On the outlook for the personal finances, GfK’s index fell to 1 his month from 5 in August, the lowest since December. The outlook for the economy also dropped, by 7 points to 4. (Bloomberg)

U.K. Home Prices Post First Drop In 17 Months As Outlook Clouds. U.K. house prices fell for the first time in almost a year and a half in September, adding to evidence the property market is softening. Prices slipped 0.2% from August to an average 188,374 pounds ($306,700), Nationwide Building Society said today in an e-mailed statement. The annual rate of growth slowed to 9.4% from 11%. The data underscore signs of a moderation in the U.K. market after the Bank of England tightened loan criteria to limit risks to financial stability and new mortgage checks came into force. (Bloomberg)

Currencies

Dollar Index Sees Biggest Quarterly Rise Since 2008. The U.S. currency gained ground on the yen and the euro Tuesday, cementing the strongest quarterly rise for the ICE dollar index since a haven-inspired surge into the greenback during the height of the financial crisis. The index rose 0.4% to 85.916. The index, which measures the dollar against six major rivals, posted a 7.7% quarterly rise, the largest since a 9.6% jump in the third quarter of 2008, according to FactSet data. The dollar reversed early weakness versus the Japanese yen to trade at ¥109.64 versus a level of ¥109.50 late Monday in New York. The euro fell to $1.2631 from $1.2685, slipping as data showed annual euro-zone inflation fell to 0.3%, a five-year low. (Market Watch)

Commodities

Oil Drops To Two-Year Lows, Capping Quarter-Long Rout. World oil prices tumbled to their lowest in more than two years on Tuesday, with U.S. crude posting its biggest daily decline since 2012, as a drop in gasoline prices and end-of quarter selling capped three months of steep losses. Brent for November delivery fell $2.53 to settle at$94.67 a barrel, its lowest since June 2012. The drop marked a 16% loss for the quarter, the biggest in two years. Brent has fallen 19% since mid June, putting the benchmark near bear market territory. U.S. crude dropped $3.41 to $91.16 a barrel, its biggest oneday loss since November 2012. U.S. crude ended down 12% for the quarter, also its biggest quarterly loss in two years. (Reuters)

Gold Posts First Quarterly Loss This Year As Dollar Soars. Gold fell to a nine-month low on Tuesday as the dollar surged and commodities led by crude oil tumbled on expectations of further gains in the U.S. currency. Spot gold was down 0.5% at $1,209.30 an ounce by 2:41 p.m. EDT (1841 GMT). Lower gold prices dragged other precious metals down, with silver fell 2.8% to $16.98, having earlier hit $16.83, its lowest since March 2010. Platinum was down 0.1% at $1,298.50 an ounce and set for a 12% quarterly drop. Palladium fell 2.3% to $768.10 an ounce, having touched a fivemonth low earlier and posted a 14% monthly loss, its biggest since September 2011. (Reuters)