Malaysia

GST-Exempt List To Result In CPI Rising 1%, Not 1.8%.The Consumer Price Index (CPI) is expected to be lower next year due to the expanded zero-rate and exempt list under the goods and services tax (GST), said Customs Department GST director Datuk Subromaniam Tholasy. He said that the Government had initially estimated the CPI to go up by 1.8%, as announced by Prime Minister Datuk Seri Najib Tun Razak when tabling Budget 2014 last year. Subromaniam said that with the lengthy zero-rate and exempt list, the expected additional CPI was expected to increase by 1% instead. “Additionally, the increase in CPI is mainly for products commonly consumed by the high-income group, such as jewellery and expensive cars. The lower-income groups will suffer little impact as most of their income is spent on basic food and household items,” he told StarBiz. (The Star)

Asia

BOJ Stays Upbeat On Regional Japan, Kuroda Says Recovery On Track. Most Japanese regional economies continue to recover as the pain from a sales tax hike in April starts to ease, the Bank of Japan said in a quarterly report, maintaining its optimism on the outlook despite growing signs growth may be losing momentum. BOJ Governor Haruhiko Kuroda stuck to his upbeat tone in a speech to a meeting of the central bank's regional branch managers, saying that the economy is set to recover moderately as a trend although there are some weaknesses in factory output. "As for the outlook, the economy will continue to recover moderately as a trend, with the effect (of the sales tax hike likely to gradually subside," he said on Monday. (Reuters)

China Central Bank Says To Advance Yuan Convertibility. China aims to quicken the process of making the yuan convertible on the capital account and will allow foreign investors to use the currency to invest in Chinese financial institutions, Central Bank Deputy Governor Hu Xiaolian said on Monday. China will also widen the number of channels for cross-border yuan flows and shift the focus of monetary policy to one that controls the price rather than the quantity of money, Hu said in remarks published on the central bank's website. (Reuters)

Europe

ECB Starts Buying Covered Bonds In Fight To Revive Euro Zone Economy. The European Central Bank has started buying covered bonds, an ECB spokesman said on Monday, opening a new front in its battle to revive the euro zone economy and keep deflation at bay. The ECB has already given banks the opportunity to borrow four-year loans and will also start buying bundled loans or asset-backed securities (ABS) later this year, having now cut its main interest rate to almost zero. By taking some of these assets off banks' balance sheets, the ECB hopes to entice banks to lend more freely again, which is crucial for the euro zone economy as it relies largely on bank funding. The ECB said the latest stimulus measures combined would have a "sizeable" impact on its balance sheet, which it aimed to return towards levels last seen in early 2012. It stood around 3 trillion euros then. The ECB's balance sheet reached just above 2 trillion euros in early October. (Reuters)

Germany, France To Seek Deal On Investment, Reforms. Germany and France sought to paper over deep differences about how to bolster a faltering European economy, promising on Monday to unveil joint proposals on strengthening investment and competitiveness by early December. They committed themselves to a Dec. 1 deadline but it was not clear the two countries' finance and economics ministers had come any closer on the substance of how to reduce France's budget deficit, reform its labor market or relaunch investment in Germany. German Finance Minister Wolfgang Schaeuble, who has opposed any big public investment drive, said the euro zone economy was weakening, "so we are determined to do everything together so that we strengthen investment in our countries". (Reuters)

UK Housing Market At 'Plateau' As Mortgage Rates Fall, CML Says. The housing market is "sitting on a plateau", a lenders' group has said, despite renewed competition between providers on mortgage rates. Gross mortgage lending totalled £17.8bn in September, down 1% on the previous month, the Council of Mortgage Lenders (CML) said. However, this was 10% higher than a year earlier. The CML said any concerns that the Bank of England had about a potential housing market bubble were "abating". It said that the surge in activity in London had slowed down. (BBC)

Currencies

Dollar Extends Modest Losses, Volumes Wane Ahead Of Data. Major currencies traded in tight ranges on Monday with investors facing a dearth of new data and modest price changes in global markets, save for Japan where stocks rallied on possible public pension fund spending, which helped boost the yen. The dollar fell 0.5% against the yen at 106.81 yen while the euro traded at $1.2809, up 0.37%. Sterling regained ground on the dollar after last week's trough, trading up 0.51% to $1.6176. (Reuters)

Commodities

Oil Slips Below $86 On Global Oversupply. Brent crude slipped below $86 a barrel on Monday, resuming a downward move that took the global oil benchmark to near a four-year low last week as supply overwhelmed weak demand in several key markets. Brent was down 60 cents at $85.56 by 1330 GMT after rallying 2% on Friday, its biggest gain in over a month. U.S. crude fell 20 cents to $82.55 a barrel. (Reuters)

Gold Up On Physical Bids, Breaks 2-Day Drop. Gold rose on Monday, snapping two straight losing sessions, boosted by a fall in the dollar and renewed physical demand related to Diwali, India's major bullion-buying event this week. Spot gold was up 0.6% at $1,245.55 an ounce by 3:14 p.m. EDT (1914 GMT). Among other precious metals, platinum was up 0.9% at $1,264.70 an ounce, while palladium rose 1.2% at $760.05 an ounce. Silver was up 0.7% at $17.35 an ounce. (Reuters)