Malaysia

GDP expanded by 5.6%. After two consecutive quarters of surpassing expectations, Malaysia’s GDP in the 3rd quarter of the year fell within estimates and posted a 5.6% YoY growth. It is line with market polls but just slightly below ours of 5.8%. This is on account of slower growth in exports and overall investment. On the bright side however, consumption had improved in the 3Q14 as overall prices began to normalize. As a whole though, we had expected a moderation in the quarter on account of a high base effect, better seen in the 0.9% quarter-on-quarter seasonally adjusted figure, nearly half of the 1.9% expansion registered in the 2Q14 and 1.7% increase in the same quarter a year ago. Meanwhile the 2Q14 growth was revised up by 0.1 percentage point to 6.5%. (Please refer to Economic Viewpoint for further comments)

Zeti Upbeat On 5.5-6pc Growth. Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz is confident that the economy will meet the 5.5 to six% growth target this year, after posting a 5.6% growth in the third quarter from a revised 6.5% in the second quarter. “It remains to be a much improved growth performance compared to before, due to the strong first half,” she said when releasing details on the third quarter performance yesterday. On a quarter-on-quarter seasonally adjusted basis, the economy grew 0.9%. “While risks to growth have increased, the Malaysian economy is expected to remain on a steady growth path.” Although exports would benefit from the recovery in advanced economies and from regional demand, the trend was likely to moderate, reflecting both the high base effect from last year and lower commodity prices, Zeti added. She warned of a considerable downside risk to global growth. (NST)

Current Account Surplus Narrowed in 3Q14. The current account surplus narrowed by RM8.4b to RM7.6b in the 3Q14, from RM16.0b in the 2Q14. This is the second consecutive quarter of narrowing surplus. As a result, its ratio to nominal Gross Domestic Product (GDP) lessened to 2.8% from 6.1% previously. It is also lesser than the same quarter in 2013, which posted 4.0% of GDP. (Please refer to Economic Viewpoint for further comments)

Global

G-20 Plans $2 Trillion Growth Boost to Uneven Global Economy. Group of 20 leaders agreed to take measures that would boost their economies by a collective $2 trillion by 2018 as they battle patchy growth and the threat of a European recession. Citing risks from financial markets and geopolitical tensions, the leaders said the global economy is being held back by lackluster demand, according to their communique following a two-day summit that ended yesterday in Brisbane. The group submitted close to 1,000 individual policy changes that they said would lift growth and said they would hold each other to account to ensure they are implemented. (Bloomberg)

Asia Pacific

China Lending Drops Sharply, Fuels Calls For Bolder Stimulus Moves. China's bank lending tumbled in October and money supply growth cooled, raising fears of a sharper slowdown in the economy and prompting some economists to urge the government to ratchet up stimulus measures, including cutting interest rates. Chinese banks made a much less-thanexpected 548.3b yuan ($89.5b) worth of new loans in October, down 36% from September, central bank data showed on Friday, pointing to deepening economic weakness in the fourth quarter. (Reuters)

China Bad Loans Jump Most Since 2005 As Economy Cools. China’s bad loans jumped by the most since 2005 in the third quarter, fueling concern that a cooling economy will be further weakened as banks limit lending to avoid credit risks. Nonperforming loans rose 72.5b yuan ($11.8b) from the previous quarter to 766.9b yuan, the China Banking Regulatory Commission said in a statement on Nov. 15. Soured credit accounted for 1.16% of lending, up from 1.08% three months earlier. (Bloomberg)

China's Fiscal Spending Falls In October From Year Earlier. China's fiscal expenditure dropped 5.7% in October from a year earlier, data from the Ministry of Finance showed on Friday, reflecting the government's efforts to put the brakes on spending after a surge in previous months. Spending growth decelerated after annual rises of 9.1% in September and 6.2% in August. For the first 10 months, spending was 11.4 trillion yuan ($1.86 trillion), higher than the 10.2 trillion yuan of the same period a year earlier. (Reuters)

Indonesia Gives First Indication On Size Of Fuel Increase. Indonesia will raise fuel prices by less than 3,000 rupiah ($0.25) a liter in the coming weeks, a move that will save the government more than $8b in the 2015 budget, its finance minister said. “For sure, it will be less than 3,000 rupiah,” Finance Minister Bambang Brodjonegoro said in an interview yesterday in Brisbane, Australia, where leaders of Group of 20 economies are meeting. The government is “watching closely” what happens with international oil prices, “because most of our fuel is imported,” he said. Widodo, known as Jokowi, has pledged to curb the energy subsidies that cost more than $20b a year, taking up more than a 10^th of government spending in the 2015 budget. (Bloomberg)

Australia-China Trade Deal To Drive Exports Beyond Mining. Australia will reach a free trade deal with China today, cementing ties with its biggest economic partner and reducing the nation’s reliance on resource exports. “The free-trade agreement to be announced tomorrow with China will be a game changer,” Josh Frydenberg, parliamentary secretary to the prime minister, said in an interview in Brisbane late yesterday. “Opening up the Chinese economy in various sectors, including services and agriculture, to Australian exports, is going to be really beneficial.” Australia is the most Chinadependent developed economy in the world, with exports to the nation accounting for 5.3% of gross domestic product, according to Commonwealth Bank of Australia. Two-way trade, which reached A$151b ($132b) in 2013, has been driven by China’s insatiable appetite for resources and energy, while Australia mainly buys cheap Chinese manufactured products. (Bloomberg)

USA

U.S. Consumer Sentiment At More Than Seven-Year High. U.S. consumer sentiment rose in November to a more than seven-year high as falling unemployment and lower gasoline prices boosted views on both current conditions and expectations, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment for this month came in at 89.4, the highest reading since July 2007, above not only the median forecast of 87.5 among 61 economists polled by Reuters, but also the highest estimate of 89.0. The survey's barometer of current economic conditions rose to 103.0 from 98.3 and above the 98.8 forecast. The survey's gauge of consumer expectations rose to 80.6 from 79.6, beating the 80.2 forecast. (Reuters)

Strong Dollar, Weak Oil Helping Americans Get Cheaper Imports. U.S. import prices fell in September by the most in more than two years as the cost of petroleum products declined and a strong dollar made it cheaper for Americans to buy goods from abroad. The Labor Department said on Friday import prices fell 1.3% last month. That was the biggest decline since June 2012 but just shy of expectations for a 1.5% drop. Export prices fell 1% during the month. The drop in overall import prices was led by lower costs for imported fuels, with the cost of petroleum down 6.9%. (Reuters)

U.S. Mortgage Delinquencies Fall To Lowest Since 2007: MBA. Late payments on U.S. mortgages fell in the third quarter to the lowest in nearly seven years, returning to a level last seen prior to the housing bust, according to a survey from a mortgage industry group released on Friday. The delinquency rate on home loans decreased to 5.85% on a seasonally adjusted basis in the third quarter. It has fallen for six straight quarters to its lowest since the fourth quarter of 2007, the Mortgage Bankers Association's latest National Delinquency Survey showed. (Reuters)

Europe

Improvement In Eurozone As Germany, France Skirt Recession. The economic clouds over Europe appeared to lift slightly in the third quarter as its two biggest economies both narrowly escaped a new recession, official data showed on Friday. Overall the eurozone grew by just 0.2%, a still worryingly low figure, but a slight acceleration from the standstill reported originally for the previous quarter. The data from the European Union’s Eurostat agency was an improvement, but will do little to dispel fears that problems in Europe, which include low inflation and stalled reforms, could spread to the world economy. In Germany, Europe’s economic powerhouse, gross domestic product (GDP) expanded by 0.1% in the period from July to September, after shrinking by 0.1% in the preceding three months. In Paris, the French economy grew by 0.3% in the third quarter, following a contraction of 0.1% in the second quarter. (AFP)

Greece's Economy Emerged From Recession In First Quarter. Greece's economy emerged from a prolonged austerityled recession as early as the first quarter this year and expanded in the next two quarters as well, data showed on Friday. This is the first time published data has shown Greece emerging from the crippling recession it sank into when its debt crisis exploded, forcing the country to seek aid from foreign lenders. The flash estimate on gross domestic product based on seasonally adjusted data showed the 182b euro economy expanding by 0.8% in the first quarter - the first time the economy has expanded since the second quarter of 2009. It then expanded 0.3% in the second quarter and 0.7% over the July to September period. (Reuters)

Currencies

U.S. Dollar Sinks Vs. Euro On Falling Inflation Expectations. The U.S. dollar moved lower against the euro on Friday, after U.S. a report of consumer sentiment indicated that expectations for higher inflation fell. The consumer –sentiment report suggests that the Federal Reserve may be in no rush to raise rates. The euro moved up $1.25 against the dollar on Friday from $1.2475 late Thursday. ICE Dollar Index a measure of the dollar’s strength against a basket of six currencies, notched lower to 87.54 from 87.82 on Thursday. The dollar did, however, move higher against the yen, hovering at a seven-year high against the Japanese currency on Friday. The greenback bought ¥116.31, up from ¥115.77 late Thursday, climbing back to levels not seen since 2007. Meanwhile, the pound ended virtually flat against the dollar at $1.57 from $1.5710 Thursday evening. (Market Watch)

Commodities

IEA: Oil ‘Price Rout’ Not Over. Oil prices are expected to keep sliding well into 2015, held down by weak demand and increased shale production, the International Energy Agency said Friday, as it maintained its full-year forecast for slow global consumption growth. The IEA said while there had been speculation that the high cost of shale extraction "might set a new equilibrium for Brent prices in the US$80 to US$90 range, supply/demand balances suggest that the price rout has yet to run its course". "Our supply and demand forecasts indicate that barring any new supply disruption, downward price pressures could build further in the first half of 2015," it added. Demand growth is meanwhile expected to remain at the fiveyear low rate of 680,000 barrels a day in 2014, reaching an estimated 92.4 million barrels a day, the IEA said. (AFP)

Oil Surges A Day After Brent Crash; Supply Fears Linger. Brent crude jumped almost $2 a barrel on Friday for its biggest daily gain in three weeks as support emerged a day after prices crashed to four-year lows below $80, but analysts were skeptical the rebound would continue, citing concerns over oversupply. Brent's new front-month contract, January, settled at $79.41 from Thursday's $77.49. The 2.5% gain was the biggest for Brent since Oct. 23 and came after a four-year low of $76.76 set earlier on Friday and a session peak at $79.75. For the week, January Brent lost 5%, accounting for declines in four earlier sessions. On a continuation basis, Brent has fallen eight weeks in a row, the longest streak of weekly declines since 1988, according to Reuters data. U.S. crude's front-month ended up $1.61 at $75.82 a barrel, after a fouryear low at $73.25 and session high of $76.30. (Reuters)

Gold Soars On Short-Covering, New Fund Buying. Gold surged 2.5% on Friday to just shy of $1,200 an ounce as shortcovering, fund buying and a sudden weakening of the dollar offset better-than-expected U.S. data that diminished demand for safe-haven metals. At 2:42 p.m. EST (1942 GMT), spot gold was up 2.5% at $1,190.60 an ounce, a sharp rise from a low of $1,146.64 after the report. Silver was up 4.4% at $16.28 an ounce, while spot palladium edged down 0.2% to $764.72 an ounce. Platinum climbed 1.5% to $1,209.49 an ounce, having earlier touched a five-year low at $1,171.10. (Reuters)