Malaysia

· 16.1m Tourist Arrivals In H1. Malaysia welcomed 16.1mil tourists for the first half of the year, an increase of 9.7% from 14.7mil tourists for the same period last year. The top 10 tourist generating markets to Malaysia from January to July 2014 was Singapore, Indonesia, China, Brunei, Thailand, India, Australia, Philippines, Japan and Taiwan. According to the Malaysia Tourism Promotion Board, the increase in the number of tourists from the top 10 countries were due to various promotional programmes on Visit Malaysia, school holidays in those countries as well as low fares promotion for flights to Malaysia. For the month of July alone, tourist arrivals clocked at 2.23mil, with the Asean region contributing a 74% share, or 1.7mil. (NST)

Asia

· Japan October Flash Manufacturing PMI Rises To Seven-Month High Of 52.8. Japanese manufacturing activity expanded in October at the fastest pace in seven months as domestic and overseas orders increased, a survey showed on Thursday, in an encouraging sign that the economy may finally be recovering from an April sales tax hike. The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.8 in October from a final reading of 51.7 in September. The index remained above the 50 threshold that separates expansion from contraction for a fifth month and reached the highest level since March. (Reuters)

· China Flash HSBC PMI Edges Up In Oct But No Indication Of Turnaround Yet. China's vast factory sector grew a shade faster in October as firms drew more foreign and domestic orders, a private survey showed on Thursday, though analysts said the figure does not point to a fourth-quarter turnaround for the cooling economy. The flash HSBC/Markit manufacturing purchasing managers' index (PMI) edged up to a three-month high of 50.4 from a final reading of 50.2 in September, and just a hair's breadth from the 50.3 reading forecast by analysts. (Reuters)

· China Not Worried About Currency Outflows. China’s foreign currency regulator is not concerned by signs of foreign exchange (forex) outflows as the economy slows, the country’s foreign exchange regulator said on yesterday, saying a recent decline in forex reserves is in line with Beijing’s policy goals. China was closely monitoring the impact of any changes in United States monetary policy, amid signs of greater volatility in cross-border flows, said Guan Tao, head of the department of international payments at State Administration of Foreign Exchange (Safe). “Capital inflows are swinging into outflows due to recent two-way fluctuations in the yuan exchange rate and the complex external and internal environment, which is normal,” Guan said. China’s foreign exchange reserves fell by about US$100b in the third quarter to US$3.89tril at the end of last month, central bank data showed. (Reuters)

· South Korea Says Weak Yen A Challenge. South Korean President Park Geun-hye on Thursday again raised the yen's weakness as a challenge for South Korea's economy, the second time this month she has specifically addressed the currency issue. "Rival economies are accelerating their chase (to win against South Korea) amid the rapidly changing external environment, including the yen's weakness," the president's office quoted her saying at a ceremony to mark the start of construction on an industrial park. (Reuters)

· Philippines Keeps Interest Rate At 4% As Inflation Eases. The Philippine central bank held its benchmark interest rate, pausing its monetary tightening cycle as inflation pressure eased. Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 4%, it said in Manila today, as predicted by 15 of 20 economists in a Bloomberg News survey. The remainder forecast an increase to 4.25%. Policy makers also held the rate on special deposit accounts and the reserve requirement ratio. (Bloomberg)

USA

· U.S. Factory Activity Growth Slips In October: Markit. The U.S. manufacturing sector slowed in October to its lowest rate of growth since July, while a gauge of new orders hit its lowest level since January, an industry report showed on Thursday. Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index fell to 56.2 from September's final reading of 57.5. Economists polled by Reuters had expected it to drop to 57.0. A reading above 50 signals expansion in economic activity. The new orders subindex dropped to its lowest level since January, falling to 57.1 from a final reading of 59.8 in September. Output fell to 58.0, the lowest since March, from 59.6 in September. (Reuters)

· U.S. Jobless Claims Remain Near 14-Year Lows. The number of new claims for jobless benefits rose last week but remained near 14-year lows, the latest sign of an improving labor market. Initial claims for unemployment benefits increased by 17,000 to a seasonally adjusted 283,000 in the week ended Oct. 18, the Labor Department said Thursday. That was slightly above the 282,000 claims forecast by economists surveyed by The Wall Street Journal. Claims for the previous week were revised up by 2,000 to 266,000. That was the lowest level since April 2000. The Labor Department said there were no special factors affecting the data. (WSJ)

· U.S. Home Prices Beat Estimates With 0.5% Gain In August. U.S. home prices rose more than economists estimated in August as employment growth fueled demand for housing. Prices climbed 0.5% on a seasonally adjusted basis from July, the Federal Housing Finance Agency said today in a report from Washington. The average economist estimate was for a 0.3% increase, according to data compiled by Bloomberg. (Bloomberg)

· U.S. Leading Economic Indicator Increases 0.8% In September. A gauge of future U.S. economic activity rebounded in September, pointing to solid growth for the remainder of the year. The Conference Board said on Thursday that its Leading Economic Index increased 0.8% last month after being flat in August. Economists polled by Reuters had expected the index to rise 0.6% after August's previously reported 0.2% gain. (Reuters)

Europe

· Euro-Area Manufacturing Grows As Risk Of Recession Eases. The euro-area economy may have moved one step away from another recession. A Purchasing Managers’ Index showed manufacturing in the region unexpectedly grew this month, while Spain’s economy showed signs of a further recovery, with third-quarter unemployment dropping to the lowest level since 2011. In Germany, factories rebounded from a slump in September. The euro-region factory PMI rose to 50.7 in October from 50.3, London-based Markit said. Economists surveyed by Bloomberg News predicted a drop to 49.9. A reading below 50 indicates contraction. The measure for services held at 52.4. (Bloomberg)

· French Business Slump Deepens As Firms Slash Prices: PMI. France's business downturn deteriorated in October to an eight-month low as firms cut prices at the fastest rate since the global financial crisis in the face of weak demand, a survey showed on Thursday. Data compiler Markit's preliminary composite purchasing managers' index (PMI) for October fell to 48.0 from a final reading of 48.4 in September. That brought the index to its lowest level since February and took it further below the 50 point line denoting expansions in activity. (Reuters)

· German Private Sector Expands In October, Eases Growth Concerns: PMI. Germany's private sector grew faster in October as manufacturing rebounded, suggesting Europe's largest economy may be gaining momentum in the fourth quarter, a survey showed on Thursday. Markit's flash composite Purchasing Managers' Index (PMI), which tracks growth in the manufacturing and services sectors that account for more than two-thirds of the economy, climbed to 54.3 from 54.1 in September. That was well above the key 50 threshold dividing growth from contraction and also pointed to a slight pick-up in growth momentum. It was driven by expansion in both the services and manufacturing sectors. (Reuters)

· Spanish Unemployment Lowest Since 2011 As Economy Grows. Spain’s unemployment rate fell to the lowest since the end of 2011 in the third quarter as its economy turned into one of the fastest-growing in the euro region. Joblessness fell to 23.7% in the three months through September from 24.5% in the previous quarter, Spain’s national statistics institute INE said in Madrid today. The economy grew 0.5% in the period, the Bank of Spain predicts. (Bloomberg)

· UK Retail Sales Fall In September On Weak Clothes Demand. UK retail sales fell in September, adding to signs that the economic recovery may be losing steam. The Office for National Statistics said sales volumes fell 0.3% on the month, more than expected and the weakest figure since January. Mild weather in September put shoppers off buying winter clothes, but sales were weaker in other sectors too. Slow wage growth, falling house prices, and global economic worries have raised concerns about the UK recovery. Last week, the Chancellor, George Osborne, warned that the UK will not escape a slowdown in the eurozone economy. Year on year, retail sales are up by 2.7%. Many economists had predicted September's retail sales to fall 0.1% month-on-month, with a gain of 2.8% for the year. (BBC)

Currencies

· Dollar Hits Two-And-A-Half Week High Against Yen. The dollar reached its highest point against the yen in two and a half weeks Thursday as rising U.S. and European sovereign bond yields increased the attractiveness of foreign bonds to Japanese investors. The dollar traded at ¥108.17 Thursday afternoon, compared with ¥107.16 late Wednesday. The euro rose sharply against the yen, trading at ¥136.83 yen Thursday, compared with ¥135.51 late Wednesday. Gaining against the greenback after two sessions of losses, the euro traded at $1.2655 Thursday, compared with $1.2646 late Wednesday. The U.S. dollar index which measures the greenback’s strength against a basket of six currencies, was up 0.1% to 85.8300 Thursday. The pound fell against the dollar as weak U.K. retail sales contrasted with strong U.S. data, trading at $1.6024 Thursday, compared with $1.6047 late Wednesday. (Market Watch)

Commodities

· Brent Up Almost 3 Pct, Biggest Gain Since June, On Reported Saudi Cut. Brent crude oil jumped nearly 3% on Thursday, its most in over four months, after an industry source said Saudi Arabia cut output in September following the summer's tumble in prices. Brent's front-month contract for December delivery settled up $2.12, or 2.5%, at $86.83 barrel. It was the largest percentage gain in a day for Brent since June 12, and came after a session peak of $87.19. U.S. crude's front-month finished up $1.57, or 2%, at $81.86, after an intraday high at $82.37. That was the biggest percentage rise since Sept. 16. (Reuters)

· Gold Drops As Equities Surge And Physical Demand Wanes. Gold fell around 1% on Thursday as stronger-than expected economic data and upbeat corporate results boosted global equity markets, while the dollar index held near a one-week high and demand for physical metal eased. Spot gold was down 0.9% at $1,229.12 an ounce by 2:08 p.m. EDT (1808 GMT), having earlier hit a one-week low of $1,226.17. Silver rose 0.6% to $17.17 an ounce, while platinum was down 0.5% at $1,251.24 an ounce and palladium climbed 1% to $775.40 an ounce. (Reuters)