Malaysia

5.7% GDP Uptick For Malaysia. The World Bank has revised upwards the growth projection for Malaysia to 5.7% this year from 5.4%, saying the economy will be spurred by improvements in exports. It noted the better-than-expected performance of 6.3% for the first half of the year, which was derived from a recovery in exports. “Driven by higher energy, commodity and petrochemical production and by the continuation of the pick-up in the E&E (electrical and electronics) sector, exports are projected to expand further into 2014 and 2015,” it said in its latest economic outlook yesterday. (NST)

Moody’s Sees Fiscal Deficit Dropping To 3.1% Of GDP. International rating agency Moody’s Investors Service expects Malaysia’s fiscal deficit to narrow to 3.1% of gross domestic product (GDP) this year, coming in below the official target of 3.5%. It described Malaysia latest move to reduce fuel subsidy as credit positive. “The move is credit-positive for the sovereign, because it will help reduce the government’s subsidy bill and contribute to its fiscal consolidation,” commented senior analysts Christian de Guzman and Steffen Dyck. However, further reforms will be necessary if the government is to meet its goal of achieving a balanced budget by 2020. (NST)

Asia

World Bank Cuts Developing East Asia 2015 GDP Forecast. The World Bank lowered its forecasts for growth in developing East Asia this year and next as China’s expansion moderates and policy makers brace for tighter global monetary conditions. The region is forecast to grow 6.9% in 2014 and 2015, down from 7.1% projected in April, the Washington-based lender said in its East Asia and Pacific Economic Update released today. China will expand 7.4% this year and 7.2% next year, compared with 7.6% and 7.5% previously forecast, the report showed. (Bloomberg)

China's Central Bank Vows To Maintain Steady Credit Growth. China's central bank said on Sunday it will use various monetary tools to maintain adequate liquidity and reasonable growth in credit and social financing. In a statement to summarize the third-quarter monetary policy committee meeting, the People's Bank of China also said it would continue to implement a prudent monetary policy, while pushing ahead with interest rate and yuan exchange rate reforms. It also noted that China's economic growth remained within a reasonable range. (Reuters)

USA

U.S. Hiring Accelerates, Jobless Rate Hits Six-Year Low. U.S. employers ramped up hiring in September and the jobless rate fell to a six-year low, bolstering bets the Federal Reserve will hike interest rates in mid-2015. U.S. non-farm payrolls rose by 248,000 last month and the jobless rate fell two-tenths of a point to 5.9%, the lowest since July 2008, the Labor Department said. Notably, part of the decline in the unemployment rate was because workers left the labor force. The share of the population with jobs or hunting for one fell to 62.7%, its lowest level since 1978. (Reuters)

New Fed Gauge Shows U.S. Labor Market Recovery Quickens In September. The U.S. labor market recovery quickened a bit last month, according to a new Federal Reserve gauge that draws on 19 separate jobs-related measures to give a broad sense of the market's health. The labor market conditions index rose by 2.5 points last month after an increase of 2.0 in August, the Fed said on Monday. The index, which has averaged gains of 4.1 points per month so far this year, reflects the acceleration in hiring and drop in the unemployment rate that the government reported on Friday. (Reuters)

U.S. Service Sector Growth Slips In September. The pace of growth in the U.S. services sector fell in September to its lowest level in three months but employment hit a nine-year high, according to an industry report released on Friday. The Institute for Supply Management said its services index fell to 58.6 last month from 59.6 in August, which was its highest level since its inception in January 2008. The September reading was slightly above economists' forecasts for 58.5, according to a Reuters survey. A reading above 50 indicates expansion in the sector. (Reuters)

U.S. Trade Deficit Narrows On Rise In Exports. The U.S. trade gap unexpectedly narrowed in August to its smallest level in seven months on an increase in exports, supporting views of sturdy economic growth in the third quarter. The Commerce Department said on Friday the trade gap narrowed 0.5% to $40.1b. July's trade deficit was revised to $40.3b. Economists polled by Reuters had expected the deficit to widen to $40.9b in August from a previously reported $40.6b shortfall a month earlier. Exports increased 0.2% to $198.5b in August, supported by rising sales aboard of U.S. capital goods, consumer goods and industrial supplies. (Reuters)

Europe

Euro Zone Retail Sales Much Stronger Than Expected In August. Euro zone retail sales increased much more than expected in August, data showed on Friday, pointing to stronger demand from households that could help economic growth in the third quarter. The European Union's statistics office Eurostat said retail sales in the 18 countries sharing the euro rose 1.2% month-on-month in August for a 1.9% year-on-year gain. Economists polled by Reuters had expected a 0.1% monthly and a 0.5% annual rise after sales contracted 0.4% month-on-month in July and rose 0.5% on the year. (Reuters)

Euro Zone Sentiment Falls In Oct To Lowest Level Since May 2013. Sentiment in the euro zone dropped for a third consecutive month in October, hitting its lowest level since May 2013, suggesting the single currency bloc will fall into recession, a survey by Sentix showed on Monday. Sentix research group's index tracking morale among investors in the euro zone tumbled to -13.7 in October from -9.8 the previous month. That undershot the consensus forecast in a Reuters poll for a reading of -11.5. (Reuters)

German Factory Orders Slump Most Since 2009. German factory orders plunged the most since 2009, underlining the risk of a slowdown in Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, fell 5.7% in August, the Economy Ministry in Berlin said today. Economists predicted a 2.5% decline, according to the median estimate in a Bloomberg News survey. The data are volatile, and the drop followed a 4.9% increase in July that was the most in more than a year. Orders fell 1.3% from a year earlier. (Bloomberg)

Greek Budget Promises Higher Growth, Tax Cuts. Greece's government unveiled its 2015 budget on Monday, promising a second year of growth and tax breaks aimed at easing austerity imposed after the country sank into its deepest post-war economic crisis. It also confirmed Athens expects to report a budget surplus excluding interest payments of 2.9% of GDP next year, just shy of the 3% target set under the bailout. It is expected to top forecasts to stand at 2% this year. The budget also predicted Greece's economy would grow in line with bailout forecasts at 2.9% next year and 0.6% this year. Debt is seen falling to a lower-than-expected 168% of GDP from 175% this year. (Reuters)

Irish Consumer Sentiment Hits New 7-Year High. Irish consumer sentiment hit a new seven year high in September as the economy continued its sharp recovery and the government promised its first budget with no major new austerity measures in six years. The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 92.8 from 87.1 in August, its highest level since January 2007 just before Ireland's economy collapsed under the weight of a massive property bubble. (Reuters)

UK Services Sector Growth 'Losing Its Legs', PMI Data Shows. Growth in the UK services sector slowed to a threemonth low in September amid suggestions that the recovery may be "losing its legs". The closely-watched purchasing managers' index (PMI) from Markit/CIPS fell to 58.7 from 60.5 in August. A figure above 50 still indicates expansion, but Markit chief economist Chris Williamson said the slowdown eased pressure to raise interest rates. He said it "adds to the case for rates to remain on hold until next year". Also, a composite PMI survey for the whole of the private sector dropped from 59.7 to 58.1, its lowest level in six months. (BBC)

Currencies

Euro Gains Against Dollar On Demand From Bargain-Hunters. The euro rose Monday as bargain hunters swooped in after a heavy bout of selling left the shared currency at a more than two-year low Friday. The euro traded at $1.2560 Monday, up from Friday’s lows. The pound traded at $1.6000 Monday, compared to $1.5970 Friday afternoon. Elsewhere in currencies trading, the euro was slightly higher against the pound at £0.7853, compared to £0.7837 Friday. Elsewhere, the dollar extended declines against the pound that it recorded in the Asian market trading day, Falling to 109.22 yen Monday, compared to ¥109.80 Friday. The ICE U.S. Dollar Index a measurement of the greenback’s strength against a basket of rival currencies, fell to 86.2330 Monday, off a multi-year high of 86.6940 Friday. (Market Watch)

Commodities

Brent Falls To Near $92 On Strong Dollar, Surplus. Brent crude futures fell to near $92 a barrel on Monday, extending this year's rout that saw the international benchmark hit a 27-month low in the previous session due to a strong U.S. dollar and ample oil supply. Brent for November delivery was down 33 cents at $91.98 a barrel by 0421 GMT. The benchmark touched $91.48 on Friday, its lowest since June 2012. U.S. November crude slipped 7 cents to $89.67 a barrel. (Reuters)

Gold Up 1.4% On Physical Buying As Dollar Drops. Gold rose 1.4% on Monday, its biggest one-day gain in two months, as the dollar's sharp retreat sparked fresh physical demand and short covering after bullion earlier hit a 15-month low, traders said. Spot gold rose 1.4% to $1,206.80 an ounce by 2:27 p.m. EDT (1827 GMT), having earlier hit a 15-month low at $1,183.46. Among other precious metals, platinum was up 1.7% at $1,236.10 an ounce, having earlier fallen to $1,183.25. Palladium rose 1.5% to $764.25 an ounce, having touched its lowest since late February at $732.75. Silver climbed 2.9% to $17.26 an ounce after earlier hitting $16.66, its weakest since March 2010. (Reuters)