Malaysia

Govt To Accrue An Estimated RM23.2b From GST: Najib. Prime Minister Datuk Seri Najib Tun Razak said the Goods and Services Tax (GST) at six per cent, to be implemented on April 1, 2015, is estimated to rake in RM23.2b in government revenue. However, we have exempted several goods from GST amounting to RM3.8b. “With the implementation of GST, the Sales and Services Tax will be abolished resulting in revenue foregone of RM13.8b. “This means that after deducting RM13.8b and RM3.8b from a revenue of RM23.2b, the government will have a balance of RM5.6b,” he said in a written reply to Teresa Kok Suh Sim (DAP-Seputeh) at the Dewan Rakyat today. Najib, who is also finance minister, said the implementation of the GST would cost RM137 million. (Bernama)

PM: Govt Still Studying New Fuel Subsidy Structure. The government is still in the midst of studying the structure of a new fuel subsidy rationalisation scheme, says Prime Minister Datuk Seri Najib Razak. “It is a bit premature (to disclose) as it is still at ‘a request for proposal’ stage. As for now, the present system will continue. We will decide when we have the best proposal with a full package,” he told Malaysian journalists late Wednesday. It was proposed that those earning below RM5,000 per month should continue to enjoy the fuel subsidy while those earning above RM10,000 would not be eligible. (Bernama)

Asia

Japan Pm Abe: Sales Tax Hike Hurts Consumers' Purchasing Power. Japanese Prime Minister Shinzo Abe said on Thursday he will scrutinize how an increase in the sales tax affects the country's prospects for ending deflation as a higher levy hurts consumers' purchasing power. "The key is whether Japan's economy can return to a growth path in the July-September quarter," Abe told parliament. "I'd like to make the decision with a cool mind, to ensure that our 'Abenomics' policies are a complete success," he said. Japan's economy suffered a severe contraction in the second quarter as a sales tax hike in April hurt household spending. (Reuters)

Thailand Cuts Growth Outlook. Thailand’s economy is still stuck in first gear nearly six months after the army overthrew the government to end months of turmoil, with demand at home and abroad stubbornly weak and big government projects unlikely to bear fruit until next year. Yesterday, the Finance Ministry again cut its economic growth forecast to 1.4% from 2% made in July – the weakest growth since 2011, when devastating flooding slashed economic growth to just 0.1%. It also lowered its growth forecast for next year to 4.1% from 5%. (Reuters)

Indonesia's Economy Grew 5.0-5.1% Yr/Yr In Third Quarter: Finance Minister. Indonesia's economy grew between 5.0-5.1% in the third quarter from a year earlier, and the September trade balance was expected to show a small deficit, the country's new finance minister said on Thursday. Finance Minister Bambang Brodjonegoro told Reuters that exports had been hit by falling prices rather than volumes. "The slowdown in China is more significant to us than normalization of the U.S.," he said. The central bank has said it expects growth this year in the range of 5.1 to 5.5%, with third quarter growth at 5.2%. (Reuters)

USA

Trade, Defense Buoy U.S. Economy, But Some Weakness Creeps In. A smaller trade deficit and surge in defense spending buoyed U.S. economic growth in the third quarter, but domestic demand slipped, hinting at some loss of momentum. Gross domestic product grew at a 3.5% annual pace, the Commerce Department said on Thursday. However, the pace of growth in business investment, housing and consumer spending slowed from the second quarter. Despite decelerating from the second quarter's robust 4.6% growth rate, it was the fourth quarter out of five that the economy has expanded at or above a 3.5% clip. The third-quarter gain in output outstripped economists' expectations, but growth in domestic demand braked to a 2.7% pace after a brisk 3.4% gain in the April-June period, giving the report a softer tenor. (Reuters)

U.S. Jobless Claims Rise, But Underlying Labor Market Trends Firming. The number of Americans filing new claims for unemployment benefits rose for a second straight week last week, but remained at levels consistent with a firming labor market. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 287,000 for the week ended Oct. 25, the Labor Department said on Thursday. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 250 to 281,000. Claims at these levels indicate a strengthening in labor market conditions. (Reuters)

Europe

German Unemployment In Surprise Fall. Unemployment in Germany fell this month, confounding predictions of a slight rise. The number of people registered as unemployed in Germany fell by 22,000 to 2.89 million in October, the Federal Labour Office said. The figures were adjusted for seasonal variations. The small decline means the unemployment rate holds steady at 6.7%. The data is a ray of light among recent signs of economic stagnation in the eurozone. (BBC)

Euro Zone Haunts Spanish Economy As Growth Slows, Prices Fall. Spain's economy expanded for the fifth quarter running between July and September, but a slowing rate of growth along with falling consumer prices suggested the recovery may be losing momentum. Gross domestic product (GDP) rose by 0.5% in the third quarter from the second, preliminary National Statistics Institute (INE) data showed on Thursday, in line with expectations but down from 0.6% between April and June. Consumer prices shrank for the fourth straight month in October, separate INE figures showed, with national prices dropping 0.1% from a year earlier. (Reuters)

U.K. Housing Loses Momentum With Price Growth At 9-Month Low. U.K. house price growthslowed to a nine-month low October, adding to evidence that the market for residential property is cooling. Annual price gains dropped to 9% from 9.4% in September in a second month of declines, Nationwide Building Society said today in a statement on its website. Still, prices rose 0.5% on the month after dropping 0.1%. Mortgage approvals fell to a 14-month low in September, Bank of England data show, and Hometrack Ltd. said London has hit an “inevitable” slowdown after values reached a record. The central bank imposed tougher mortgage rules to preserve financial stability. (Bloomberg)

Portugal Will Reach 1.5% Growth In 2015 Despite Bes Collapse, Pm Says. The collapse of the Espirito Santo banking family's business empire will not keep Portugal's economy from growing 1.5% next year, as forecast, but probably will keep it from expanding any further, the Portuguese prime minister said on Thursday. "Various adverse scenarios of that impact applied to public accounts put the growth within the central projection, and the government sees no reason to revise it," Pedro Passos Coelho told parliament during discussions of the 2015 budget. He acknowledged the problems at Espirito Santo Group will have negative consequences, "which means that if it wasn't for this problem, we could possibly grow more and have more jobs". (Reuters)

Euro-Area Slump Concerns Ease As Confidence Improves. Economic sentiment in the euro area unexpectedly rose in October in a sign that the 18-nation region has moved one step away from a renewed economic downturn. An index of executive and consumer confidence increased to 100.7 from 99.9 in September, the first gain in three months, the European Commission in Brussels said today. Economists predicted a drop to 99.7, according to a Bloomberg survey. (Bloomberg)

Currencies

U.S. Dollar Approaches Four-Year High After Fed. The U.S. dollar extended gains against rival currencies on Thursday, pushing a widely-watched gauge of the greenback’s strength near a four-year high. The ICE Dollar index a measure of the dollar against a basket of major currencies, edged up to 86.142 on Thursday, from 85.979 late Wednesday. The index closed in on its highest level since 2010. The dollar was at ¥109.22 from ¥108.90 late Wednesday, while the euro slipped to $1.2611 from $1.2631. The British pound slipped to $1.6002 from $1.6021. (Market Watch)

Commodities

Oil Slips On Dollar, Rate Fears After 2-Day Gain. Oil prices closed down 1% on Thursday, resuming their downtrend after a two-day climb, as the dollar rallied on bets of a sooner-than-expected U.S. rate hike and traders placed little hope on OPEC cutting output at its November meeting. Brent crude for December delivery settled down 88 cents a barrel at $86.24, after falling to as low as $85.92. Front-month U.S. crude finished down $1.08 at $81.12, after a session low at $80.80. (Reuters)

Gold, Silver Tumble On Strong U.S. Growth Data, Fed Outlook. Gold fell 1% to $1,200 an ounce and silver plunged to its lowest level in more than four-and-a-half years on Thursday, hit by strong third-quarter U.S. economic growth and worries the Federal Reserve might raise interest rates sooner than expected. Spot gold fell as low as $1,195.70 an ounce, which marked a three-week low, and was down 1.1% to $1,198.70 an ounce at 3:16 p.m. (1916 GMT). Silver was down 3.7% at $16.41 an ounce on Thursday, having earlier hit its lowest level since March 2010 at $16.30 an ounce. Spot platinum fell 1.2% to $1,239 an ounce, while spot palladium dropped 1.6% to $777.25 an ounce. (Reuters)