Asia

Spore Sticks To Tight Monetary Policy, Q3 Growth Disappoints. Singapore's central bank cut its forecasts for headline and core inflation this year but stuck to its tight monetary policy as expected on Tuesday, saying core inflation is likely to stay above its historical average over the next few quarters. The central bank kept its policy unchanged, even as economic growth in the third quarter came in below market expectations, with GDP expanding 1.2% from the previous quarter on an annualised and seasonally adjusted basis. The median forecast in a Reuters survey had been for quarter-on-quarter growth of 1.8%. The MAS lowered its forecast for core inflation to an average of 2-2.5% in 2014, down from 2-3% previously, and said core inflation was likely to come in at 2% to 3% next year. It also cut its 2014 all-items inflation forecast to 1% to 1.5% from 1.5% to 2%, adding that headline inflation is forecast at 0.5% to 1.5% in 2015. (Reuters)

India Inflation Rate Falls To Five-Year Low. India's inflation rate fell to a five-year low in September because of lower food and fuel prices. The Wholesale Price Index (WPI), India's main gauge of inflation, rose 2.38% in September from a year earlier. That is the smallest increase since October 2009. India's WPI rose by 3.74% in August. Data also showed that falling global crude oil prices helped drive down India's fuel inflation to 1.3% in September from 4.5% in August. The figures came from India's Commerce Ministry, which said food inflation declined by 1.4% as a result of lower prices for tea, fruits and vegetables, as well as maize, chicken and fish. (BBC)

Italy And China Sign Business Deals Worth $10b. Italy and China signed business deals worth about 8b euros ($10b) on Tuesday in sectors ranging from energy to engineering, deepening Beijing's commercial ties with the euro zone's No. 3 economy. China has already spent well over 5b euros buying stakes in some of Italy's biggest companies this year. At a news conference with Chinese Premier Li Keqiang in Rome, Italian Prime Minister Matteo Renzi said the deals were no more than an "antipasto" and should open the way to further accords with China in the future. "We must bring more China to Italy and take more Italy to China," he said. (Reuters)

USA

U.S. Small Business Confidence Declines In September: NFIB. U.S. small business optimism fell in September as more owners said they expected a slowdown in profits and sales, tightening credit conditions and a harder time filling job openings, according to a survey released on Tuesday. The National Federation of Independent Business said its Small Business Optimism Index fell 0.8 point to 95.3. The index is now five points below where it was before the start of the 2007-2009 financial crisis and recession. Six of the index's 10 components fell in the survey of 608 randomly-selected small business owners. Still, more business owners said they believed it was a good time to expand their firms and expected better conditions in six months. (Reuters)

Europe

Euro Zone Industrial Output Falls; Ministers Debate Weak Economy. Euro zone industrial production fell more than expected in August, reflecting a slump in the output of capital goods used for investment and raising concern that the economy is weaker than previously thought. The European Union's statistics office Eurostat said on Tuesday that production in the 18 countries sharing the euro fell 1.8% in August from July for a 1.9% year-on-year decline. Economists polled by Reuters had expected a 1.6% monthly fall and a -0.9 annual fall. (Reuters)

German Investor Morale Plunges To Lowest Level In Almost Two Years. An index of German analyst and investor morale fell below zero for the first time in nearly two years in October, suggesting Europe's largest economy is reeling from crises abroad and a weak euro zone, while weak German data has also hit the mood. Mannheim-based think tank ZEW's monthly survey of economic sentiment, published on Tuesday, tumbled for a tenth consecutive month to -3.6, signaling that investors generally expect the German economy to continue weakening over the medium term. That was the weakest reading since November 2012 and was much lower than the consensus forecast in a Reuters poll for a positive reading of 1.0. (Reuters)

Germany Cuts 2014 Growth Forecast From 1.8% To 1.2%. The German government has sharply cut its economic growth forecast for this year and next, citing "external" factors for the revision. It now expects growth this year to be 1.2%, down from its previous estimate of 1.8%. Next year, it expects the economy to grow by 1.3%, down from 2%. A slowdown in the eurozone economy has hit German exports in recent months. Economy Minister Sigmar Gabriel said there was no reason for the government to change its economic policies. (BBC)

Ireland Calls Time On Austerity, 'Double Irish' Tax Dodge. Ireland will phase out a tax loophole that multinationals use to save billions of dollars under sweeping changes to its corporate tax structure announced in Tuesday's budget, the first in seven years without new austerity measures. With one eye on an election in 18 months' time, Finance Minister Michael Noonan also unveiled plans to cut the income tax burden on low and middle income earners frustrated by Ireland's uneven recovery from the global crisis, changes that will benefit workers at foreign as well as domestic companies. (Reuters)

UK Inflation Rate Of 1.2% Is Lowest In Five Years. UK inflation fell to a five-year low of 1.2% in September from 1.5% the month before, official figures show. The rate - as measured by the Consumer Prices Index - is the lowest since September 2009, when it was 1.1%. Lower energy and food prices helped to cut the rate, while the Office for National Statistics (ONS) also cited cheaper transport costs as a factor. The news sent the pound lower as analysts said a rate rise was now not likely until well into next year. The Retail Prices Index measure of inflation fell to 2.3% from 2.4% in August. (BBC)

Currencies

Dollar Extends Gains Against Euro, Pound On Inflation Worries. The dollar rose against the pound and the euro Tuesday afternoon as investors continued to worry about the growing gap between robust economic growth in the U.S. and flagging growth in Europe ahead of more data. The dollar traded at 107.03 yen, compared to ¥107.00 late Monday. The ICE U.S. Dollar Index a measure of the currency’s strength against a basket of six rival currencies, was up for the day at 85.8420, compared to 85.5320 late Monday. The euro traded at $1.2647 Tuesday afternoon, compared to $1.2740 late Monday. Against the pound, the euro was up for the day, trading at £0.7953, compared to £0.7926 late Monday. (Market Watch)

Commodities

IEA Revises World Oil Demand Growth Sharply Lower. The world will see much weaker oil demand growth in 2015 than previously forecast, the International Energy Agency said on Tuesday, adding that oil prices may drop further. "Recent price drops appear both supply and demand driven. Further oil price drops would likely be needed for supply to take a hit – or for demand growth to get a lift," said the agency representing industrialised nations in a monthly report. The IEA said it had cut its estimate for 2014 oil demand growth by 200,000 barrels per day (bpd) to 0.7mil bpd. In 2015, it expects demand to expand by 1.1mil bpd to 93.5mil bpd, up by 1.2% but 300,000 bpd less than previously forecast (Reuters)

Oil Rout Unrelenting, Hits $86 On Dim Demand View, Rising Shale. Oil prices plunged nearly $3 a barrel on Tuesday, on track for the biggest one-day slide in over a year after the West's energy watchdog cut its estimates for oil demand and U.S. forecasts projected another big bump in shale production. Brent crude for November, which expires on Thursday, fell $2.65 a barrel to $86.24 after briefly dipping below $86 a barrel, its lowest since December 2010. U.S. crude fell $2.68 a barrel to $83.06 after it pared sharp intraday losses on Monday to settle down 8 cents. (Reuters)

Gold Falls From 4-Week High As Oil Plummets, Dollar Up. Gold fell on Tuesday as sliding crude oil prices and a dollar rebound prompted the bullion market to take a breather following its recent rally. Spot gold was down 0.3% at $1,232.75 an ounce by 2:34 p.m. EDT (1834 GMT) after touching a four-week high of $1,237.90 an ounce. Among other precious metals, silver was down 0.5% at $17.36 an ounce. Platinum rose 0.3% to $1,263.75 an ounce, and palladium climbed 1.5% to $790 an ounce. (Reuters)