Global

IMF Warns Of Low Interest Rates 'Risk' To Economy. The International Monetary Fund has warned of new risks to global financial stability. Low interest rates could lead investors to buy riskier assets as they seek better returns, the IMF says. In a new report, it says there is a danger that this behaviour could derail the economic recovery, which the IMF has already described as "weak and uneven". The report says the risks require "increased vigilance". (BBC)

OECD Sees Stable Growth For Major Economies, Weaker In Euro Zone. Most major world economies are continuing to show stable growth momentum, but within the euro zone Germany and Italy are losing steam, the OECD said on Wednesday. The figures from the Paris-based Organisation for Economic Cooperation and Development added to a range of recent surveys which pointed to weakness in the euro area and came a day after the International Monetary Fund cut its global growth forecasts. The OECD said its leading indicator covering 33 member countries was stable in August from the prior month at 100.4, above its long-term average of 100. That stability was also anticipated for Brazil, Russia and China. The indicator has been close to or at 100.50 since November 2013. In the euro zone, however, signs point to weakening growth, with the indicator for Germany, Europe's biggest economy, falling to 99.7 from 100.1 in July. (Reuters)

Malaysia

MITI Sees Higher Trade Growth This Year. The International Trade and Industry Ministry is optimistic that trade growth this year will surpass the 4.7% achieved last year, propped up by the bright prospects of world economic growth. Minister Datuk Seri Mustapa Mohamed said despite the European economy remaining sluggish and China’s slowing economic growth, other trade destinations still showed bright prospects. He said among the trade destinations which showed positive outlook were Japan whose economy was expanding, the recovering economy of the United States while the Asean economy continued to be fine. “There will be some slight increase in total trade growth. We are expecting somewhere around 6%,” he told reporters. Malaysia’s total trade in August 2014 increased to RM123.9bil from the RM118.58bil recorded in the same month last year. (Bernama)

Asia

Japan Service Sector Sentiment Unchanged In September: Government Survey. Japan's service sector sentiment index was unchanged in September, staying below the 50-point threshold that separates pessimism from optimism for the second straight month, a Cabinet Office survey showed on Wednesday. The survey of workers such as taxi drivers, hotel workers and restaurant staff - called "economy watchers" for their proximity to consumer and retail trends - showed the index measuring their confidence in current economic conditions was flat at 47.4 last month. A reading below 50 suggests that more workers are pessimistic about business conditions. (Reuters)

China 'Golden Week' Retail Sales Growth Slows To 12.1%. Growth in China's retail sales during the long "Golden Week" holiday slowed to 12.1% from a 13.6% rise in the same period last year, data from the Ministry of Commerce showed on Wednesday. China's retailers and catering firms chalked up sales of 975b yuan ($158.94b) during the weeklong National Day holiday, according to the ministry. The holiday, when millions of people take time out to travel and spend more than usual, also brings huge discounts and promotions as retailers battle for market share. (Reuters)

China Services Sector Growth Weakens Slightly In September: HSBC PMI. Growth in China's services sector weakened slightly in September as new business cooled, a private survey showed on Wednesday, reinforcing signs of a slowdown in the world's second-largest economy that could prompt more stimulus measures. The services purchasing managers' index (PMI) compiled by HSBC/Markit pulled back to 53.5 in September from a 17-month high of 54.1 in August. A reading above 50 in PMI surveys indicates an expansion in activity while one below that threshold points to a contraction.

(Reuters)

Americas

U.S. Fed Frets Over Strong Dollar, Global Woes: Minutes. Federal Reserve officials want to tie an interest-rate rise to U.S. economic progress, but the minutes of their last policy meeting show they are struggling with how to come to grips with the dual threats of a stronger dollar and a global slowdown. The minutes expressed concern the rising dollar could slow a needed rebound in inflation. They also highlighted economic turmoil in Europe and Asia, another factor behind the bank's keeping policy accommodation in place for the near future (Reuters)

U.S. Fiscal 2014 Budget Deficit Falls To $486b, CBO Says. The U.S. budget deficit fell by nearly a third during fiscal 2014 to $486b as federal revenues grew far faster than spending, the Congressional Budget Office said on Wednesday. Releasing preliminary estimates of final budget data for the year ended Sept. 30, the CBO said receipts grew nearly 9% from the previous year to $3.013 trillion, while outlays were up 1.4% to $3.499 trillion. The resulting fiscal 2014 deficit was down about $195b from the $680b budget gap recorded in fiscal 2013. The CBO estimated a September budget surplus of $106b, up from a $75b surplus a year earlier. The U.S. Treasury Department is expected to report final budget data for fiscal 2014 by Oct. 17. (Reuters)

U.S. Mortgage Applications Rise In Latest Week: MBA. Applications for U.S. home mortgages rose last week as interest rates declined, 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, rose 3.8% in the week ended Oct. 3. (Reuters)

Brazil Inflation Highest In Nearly 3 Years Ahead Of Election. Brazil's annual inflation rate in September shot way above an official target to its highest in nearly three years, the latest economic blow for President Dilma Rousseff who is locked in a tight race for re-election against market-favorite Aecio Neves. Consumer prices rose a faster-than-expected 6.75% in the 12 months through September, the quickest pace since October 2011, government data showed on Wednesday. (Reuters)

Europe

Bank Of Portugal Lowers 2014 Growth Outlook To 0.9%. The Bank of Portugal lowered its 2014 growth forecast on Wednesday to 0.9% from 1.1%, citing lower public consumption and higher imports. "This revision is essentially explained by a downward revision of public consumption and by incorporating the most recent information on foreign trade," the bank said in its latest economic bulletin. The bank also said Portugal has to deepen its "demanding" deleveraging process of its highly indebted public and private sectors. (Reuters)

Poland Cuts Interest Rates Sharply To Counter Ukraine, Euro Zone Troubles. Poland's central bank cut interest rates by a deeper-than-expected 50 basis points on Wednesday, a resumption of easing forced on it by the spillover from the euro zone's stuttering recovery and the crisis in Ukraine. The return to rate cuts in eastern Europe's biggest economy after a 15-month pause was a response to falling industrial output and a deep drop in consumer prices, partly the result of a glut of food products that are barred from export to Russia. The bank's Monetary Policy Council (MPC) cut the benchmark interest rate to 2.00%, a new record low. That was deeper than the 25 basis point cut that most analysts polled by Reuters had been predicting. (Reuters)

Middle East & Africa

IMF Cuts Middle East Growth Forecasts On Global Trends, Unrest. The International Monetary Fund cut its economic growth forecasts for many countries in the Middle East, citing the impact of political unrest as well as a weaker global outlook. Output in the Middle East, North Africa, Afghanistan and Pakistan is now expected to expand 2.7% this year, 0.4%age point slower than the IMF's last forecast made in July, the Fund said in its twice-yearly World Economic Outlook, issued this week. Next year, growth in the region is expected to accelerate to 3.9% - but that is 0.9%age point slower than the IMF's July forecast. (Reuters)

World Bank Sees Financial Impact Of Ebola At As Much As $32.6b In Africa. The regional impact of West Africa's Ebola epidemic could reach $32.6b by the end of 2015 if it spreads significantly beyond the worst-hit countries of Guinea, Liberia and Sierra Leone, the World Bank said on Wednesday. "The enormous economic cost of the current outbreak to the affected countries and the world could have been avoided by prudent ongoing investment in health systems-strengthening," World Bank President Jim Yong Kim said in a statement. (Reuters)

Currencies

Dollar Bulls Rounded Up By Fed Minutes. The dollar languished at two-week lows early on Thursday, having fallen for a third straight session after minutes from the U.S. Federal Reserve's last policy meeting prompted markets to push out the likely timing of an interest rate rise. The dollar index slid to 85.198, retreating further from a four-year peak of 86.746 set on Friday. The euro jumped to $1.2733 and was now more than two cents off a two-year trough. It was steadier on the yen at 108.20, though still well away from a six-year high of 110.09 set last week. (Reuters)

Commodities

Brent Ends Down But Off Early Lows, Shaking Off US Stockpile Data. Brent crude hit a 27-month low on Wednesday before recovering partially to close above $91 a barrel, with analysts saying the market could be headed for a rebound despite growing stockpiles and a gloomy world economic outlook. Brent crude for November delivery settled down 73 cents, or 0.8%, at $91.38 a barrel. It fell to as low as $90.57 earlier, marking a bottom since June 2012. Except for one session, Brent has been down daily from Sept. 30, losing about 6% in that period. U.S. crude finished down $1.54, or 1.7%, at $87.31 a barrel, after hitting $86.83, its lowest level since April 2013. (Reuters)

Gold Rises Nearly 1% After Fed Minutes. Gold rose about 1% on Wednesday after minutes of the last Federal Reserve policy meeting showed U.S. central bankers concerned about the rising dollar, slowing inflation and economic turmoil in Europe and Asia, feeding the view that interest rates would stay low. Spot gold was up 0.8% at $1,218.79 an ounce by 3:07 p.m. EDT, Its session high was $1,220.60. Silver was up 1.2% at $17.34 an ounce, while palladium rose 2.2% to $795.97 an ounce and platinum climbed 1.3% to $1,268.20 an ounce. (Reuters)