Global

World Economies Warn Of Global Risks, Call For Bold Action. The International Monetary Fund's member countries on Saturday said bold action was needed to bolster the global economic recovery and they urged governments not to squelch growth by tightening budgets too drastically, although Germany poured cold water on the idea of a new global "crisis." With Japan's economy floundering, the euro zone at risk of recession and even China's expansion slowing, the IMF's steering committee said focusing on growth was the priority. "A number of countries face the prospect of low or slowing growth, with unemployment remaining unacceptably high," the International Monetary and Financial Committee said on behalf of the Fund's 188 member countries. (Reuters)

Malaysia

Malaysia Still Needs Accommodative Policy, Central Bank Chief Says. Malaysia’s economy is likely to keep expanding at a solid clip next year despite softer economic growth globally, but still requires the support of fairly low interest rates to continue humming, Zeti Akhtar Aziz, the country’s central bank governor, said Saturday. Ms. Zeti, in an interview with The Wall Street Journal, predicted economic growth between 5% and 6% “going into next year,” adding she wasn’t troubled by signs of economic softness in Europe and particularly in China, the country’s largest trading partner. “We see ourselves on a steady growth path,” she said. Pockets of weakness in the outlook emanate largely from temporary factors such as budget reforms and tax reforms, and are therefore not a cause for concern, Ms. Zeti said. (WSJ)

Asia

IMF Urges BOJ Pragmatism On Meeting Inflation Timeframe. The Bank of Japan (BoJ) won’t reach its two% inflation target next year and needs to manage expectations, according to the International Monetary Fund (IMF). “The BoJ hasn’t lowered the flag on that yet,” said IMF deputy managing director Naoyuki Shinohara in an interview in Washington. “That can affect the trust in a central bank, so they have to handle their communications well.” Dissent on the inflation outlook is spreading inside the BoJ, with board member Sayuri Shirai objecting to language in its policy statement and a majority said to favour ditching the current timeframe at some point. (Bloomberg)

Beijing Finds Agreement With IMF About Slowing China. Central bankers and International Monetary Fund officials agree with Beijing: a slowdown in the world’s second-largest economy is considered healthy and there’s no need for further monetary easing. People’s Bank of China Governor Zhou Xiaochuan reiterated the need for “prudent” monetary policy amid steady economic growth and “mild” inflation in an Oct. 11 report to the IMF in Washington. Chinese policy makers are focusing on employment even as industrial production to property investment are slowing. Premier Li Keqiang said last week that China has already achieved its employment target for 2014. (Bloomberg)

USA

Fed Officials Ready To Slow Tightening If World Growth Disappoints. Federal Reserve officials sounded an alert over the threat to U.S. growth from a slowdown elsewhere in the world, warning it could make them delay an interest rate increase. “If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise,” Vice Chairman Stanley Fischer said yesterday in a speech at the International Monetary Fund’s annual meetings in Washington. The remarks, echoed by other Fed officials, highlighted mounting concern about the improving U.S. economy’s ability to withstand foreign weakness and a strengthening dollar. (Bloomberg)

Europe

Schaeuble Says Germany Will Shift Spending To Investment. German Finance Minister Wolfgang Schaeuble said Germany’s response to a “clear weakening” of the economy will be a shift in public spending toward investments and away from government consumption. Schaeuble said the government will lower its growth forecast for Europe’s biggest economy this week and cited sanctions imposed on Russia, geopolitical uncertainty, weaker growth in the rest of Europe and a loss of confidence as reasons. He spoke to reporters yesterday after meetings of finance chiefs gathered in Washington for the annual meetings of the International Monetary Fund and the World Bank. (Bloomberg)

France's Credit Outlook Cut To Negative By S&P. Credit rating agency Standard and Poor's has cut France's credit outlook to 'negative', due to concerns about the country's struggling economic recovery. However, it affirmed France's AA/A-1+ rating, the third-highest rating. "We believe that...a recovery of the French economy could prove elusive," said S&P in a statement. France's finance minister, Michel Sapin, said the country's debt was "one of the surest in the world". "We will pursue the needed reforms, to boost our medium term growth prospects," he said in a statement. (BBC)

Finland’s Lost AAA Rating Prompts Premier Plea For Action. Finnish Prime Minister Alexander Stubb said lawmakers must abandon their political differences and draft a set of measures to help cut debt after the Nordic country was stripped of its AAA rating. Standard & Poor’s one-step downgrade of Finland to AA+ from AAA leaves Germany and Luxembourg as the euro area’s last top-rated members. The step also marks the latest defeat for a government dogged by a fractious parliament and shrinking coalition. S&P said the economy faces a protracted period of stagnation, with an aging population complicating efforts to balance the budget and reduce debt. (Bloomberg)

Greece Says IMF To Maintain Routine Post-Bailout Review After Exit. Greece has begun talks for ending International Monetary Fund aid to the country, but will continue to have routine post-bailout reviews by the Washington-based group, a Greek official said after talks with the IMF's chief on Sunday. The IMF is deeply unpopular in Greece for insisting on austerity cuts under Greece's 240b euro EU/IMF bailout and Prime Minister Antonis Samaras hopes that cutting ties with the IMF will help turn around his flagging political fortunes. "Everything is on the table, the discussions have started. The IMF is positive because it believes that it has contributed to progress in Greece," a Greek finance ministry official said after a meeting with IMF chief Christine Lagarde. (Reuters)

UK Trade Deficit Narrows In August. The gap between the amount the UK imports and the amount it exports narrowed in August, the latest official figures show. The Office for National Statistics (ONS) said the UK's trade deficit in goods and services stood at £1.9bn in August, compared with £3.1bn in July. But the narrowing was down to a fall in imports rather than a rise in exports. Separate figures from the ONS also showed a fall in output from the UK's construction industry. Construction output dropped by 3.9% in August after a 1.9% rise in July, the ONS said. (BBC)

Currencies

Dollar Ends Week Lower, Breaking Win Streak. After recording 12 straight weeks of growth, the U.S. Dollar Index finished the week lower for the first time since early July Friday as investors sold the currency on concerns it had become overbought following last week’s better-than-expected jobs report. The dollar index was at 85.9100 Friday afternoon, up from 85.5220 late Thursday. The dollar traded flat against the yen Friday afternoon, hovering around 107.77 yen, compared to ¥107.87 late Thursday. The euro traded at $1.2614 and £0.7859 Friday, compared to $1.2688 and £0.7871 late Thursday. (Market Watch)

Commodities

Oil Rebounds Off 4-Year Low On Short Covering. Global oil prices rebounded on Friday, after sinking to the lowest levels in nearly four years earlier in the day, as end-of-week short-covering stalled a near four-month price rout. Pressured by ample supply and weak economic data, Brent crude oil has dropped $25 dollars since June and on Friday fell below $90 a barrel to its lowest level since December 2010. U.S. prices have also fallen sharply. Brent crude for November delivery settled up 16 cents at $90.21 a barrel after earlier falling to $88.11, the lowest since December 2010. U.S. November crude finished up just 5 cents at $85.82 a barrel. The contract earlier hit a session low of $83.59, its lowest since July 2012. (Reuters)

Gold Rally Stalls As Firmer Dollar Hits Commodities. Gold edged lower on Friday as a rise in the dollar capped four days of gains, though the metal remained supported around the $1,220 level by the prospect of a widespread economic slowdown that could keep interest rates low. Spot gold was down 30 cents at $1,223.45 an ounce by 3:58 p.m. EDT (1958 GMT), while U.S. COMEX gold futures for December delivery settled down $3.60 an ounce at $1,221.70. Among other precious metals, silver was up 0.2% at $17.33 an ounce, while spot platinum was down 0.8% at $1,254 an ounce, and spot palladium was down 1.3% at $780.10 an ounce. (Reuters)