Global

IMF: Lower Oil Prices Good For World Economy. Falling oil prices are positive for the global economy, though they may hurt individual commodity exporters, said International Monetary Fund (IMF) managing director Christine Lagarde on Monday. “Assuming we have a 30% decline (in oil prices), it’s likely to be an additional 0.8% (in economic growth) for most advanced economies, because all of them are importers of oil,” Lagarde said, mentioning the United States, Europe, Japan and China in particular. World oil prices are down 40% since June. (Reuters)

Asia Pacific

S&P Lowers Japan Rating To ‘AA-’. Standard & Poor’s cast doubt on Japan Prime Minister Shinzo Abe’s ability to repair the country’s tattered finances, a day after Moody’s tarnished the government’s economic record less than two weeks away from a major election. Abe’s decision to delay a sales tax increase by 18 months may help the economy in the short term, but there is still no guarantee taxes will rise because the political dynamic could change after the election, said Takahira Ogawa, S&P director of sovereign ratings. S&P has an “AA-” rating on Japan, which is three notches from the top rating of “AAA”. S&P’s rating on Japan has a negative outlook, meaning a downgrade is possible. (Reuters)

Japanese Workers See Wages Drop For 16th Month On Inflation. Japanese wages adjusted for inflation dropped for a sixteenth straight month as Prime Minister Shinzo Abe faces an election focused on his efforts to spur economic growth. Earning declined 2.8% in October from a year earlier, the labor ministry said today, following data last week showing households cut spending for a seventh month. (Bloomberg)

South Korea November Inflation At Nine-Month Low, Builds Case For More Rate Cuts. South Korea's inflation in November cooled to a 9-month low on weak energy prices and depressed consumer confidence, data showed on Tuesday, adding to fears of deflation and reinforcing expectations for additional monetary easing in coming months. The consumer price index was just 1.0% higher in November from a year earlier, Statistics Korea reported, marking the slowest rate since February this year. It compared with a 1.2% gain in October, and was also below the 1.2% rise forecast in a Reuters poll. (Reuters)

Rajan Holds India’s Rates While Signaling Cut To Come. India’s central bank left interest rates unchanged for a fifth straight meeting while signaling a possible easing early next year after Prime Minister Narendra Modi’s government called for lower borrowing costs. Governor Raghuram Rajan kept the benchmark repurchase rate at 8%, the Reserve Bank of India said in a statement in Mumbai today, a move predicted by 44 of 48 economists in a Bloomberg survey. Risks to the central bank’s January 2016 target of 6% inflation “appear evenly balanced,” he said today in a statement. (Bloomberg)

Australia's RBA Keeps Rates On Hold Amid Commodity Selloff. Australia's central bank kept interest rates at record lows for a 16th straight month on Tuesday, saying sub-par economic growth could extend this unusually lengthy period of stability for some time yet. There was little relief for the hard-pressed local dollar as the Reserve Bank of Australia (RBA) repeated the currency was overvalued given the ongoing slide in prices for many of the country's commodity exports. "Overall, the Bank still expects growth to be a little below trend for the next several quarters," said RBA Governor Glenn Stevens following the bank's monthly policy meeting. (Reuters)

USA

Solid Construction, Auto Sales Data Boost U.S. Growth Picture. U.S. construction spending recorded its largest gain in five months in October, easing concerns of a sharp slowdown in fourth-quarter economic growth. The growth outlook also got a boost from strong automobile sales in November. Construction spending rose 1.1%, the biggest advance since May, the Commerce Department said on Tuesday. September's construction outlays were revised up to show only a 0.1% drop instead of the previously reported 0.4% fall. Separately, auto sales raced to an annual rate of about 17.1 million units in November, the best pace for that month since 2003 and well ahead of analysts' estimates for a rise to a rate of 16.7 million units. (Reuters)

U.S. CEOs Gloomier On Spending, More Optimistic On Job Front. U.S. chief executive officers are more pessimistic about their spending plans and the outlook for the economy, but are more bullish on their hiring prospects, according to a quarterly survey from the Business Roundtable released on Tuesday. Of the 129 CEOs who responded to the survey, 36% said they expected to increase their capital spending in the next six months, down from 39% in the third quarter and an eight-point drop from 44% in the second quarter. The Business Roundtable CEO Economic Outlook Index – a composite index of CEO expectations for the next six months of sales, capital spending and employment – dropped slightly to 85.1 from 86.4 in the third quarter. The index is above the long-term average of 80.3, but more than 10 points below the second quarter when it stood at 95.4. CEOs said they expected 2015 U.S. economic growth of 2.4%, the same as their forecast for 2014. (Reuters)

U.S. Small Business Borrowing Rises To Highest On Record. U.S. small businesses ramped up borrowing in October, pushing the Thomson Reuters/PayNet Small Business Lending Index to a record high, according to data released on Tuesday. The reading of 131.8, up from 127.1 in September, was the highest since the index launched in 2005. The previous record was set in January 2007; later that year, the nation's economy fell into its deepest downturn in decades, a recession from which it has yet to fully recover. This time around the signs point to more growth ahead, not less, PayNet founder Bill Phelan said. (Reuters)

Europe

Euro Zone Producer Prices Fall At Sharpest Rate In A Year. Euro zone factory prices fell at their sharpest monthly rate in a year in October as the cost of energy and non-durable goods such as food dropped sharply, putting pressure on the European Central Bank to do more to lift the bloc's depressed economy. Prices at factory gates in the 18 countries sharing the single currency declined by 0.4 cent from September, the European Union's statistics office Eurostat said on Tuesday. Economists polled by Reuters had forecast a 0.3% drop. (Reuters)

Russia Warns Of Recession In 2015. The Russian government has warned the economy will fall into recession next year as Western sanctions, in response to its role in eastern Ukraine, and falling oil prices begin to bite. Russia's economic development ministry estimates the economy will contract by 0.8% next year. It had previously estimated the the economy would grow by 1.2% in 2015. Russia's reliance on tax revenues from the oil industry makes it particularly sensitive to price movements. Household disposable incomes are also forecast to decline by as much as 2.8%, compared with a previous estimate that they would grow by 0.4%. (BBC)

Currencies

Dollar Index Hits Highest Level Since March 2009. The ICE U.S. Dollar Index reached its highest level since March 2009 Tuesday as global economic data highlighted the increasing disparity between growth in the U.S. and elsewhere. The dollar Index a measure of the greenback’s strength against a basket of six currencies, was up 0.76% to 88.6150. The largest driver of the index’s gains was the euro, which hit a 28-month low against the dollar as investors sold the shared currency ahead of Thursday’s meeting of the European Central Bank’s Governing Council. It traded at $1.2360, compared to $1.2475 Monday. The dollar traded as high as 54.1820 rubles Tuesday, compared to 51.1995 rubles late Monday. The pound traded at $1.5653 Tuesday, compared to $1.5737 late Monday. Elsewhere, the dollar hit a fresh seven-year high against the yen Tuesday, reversing a week of losses to trade at 119.21 yen, compared to 118.27 yen late Monday. (Market Watch)

Commodities

Oil Falls Below $72 After Sharp Rally In Volatile Market. Brent oil fell below $72 a barrel on Tuesday, giving up some of its gains in the previous day's rally from five-year lows, as traders voiced uncertainty over whether the market had reached a floor or would keep falling. Brent was down $1 at $71.54 by 9:40 a.m. ET, after jumping 3.4% on Monday. U.S. crude was down $1.40 at $67.60 a barrel. (Reuters)

Gold Dips As Dollar Strengthens And Oil Returns Lower. Gold slipped on Tuesday as a strong dollar and signals the U.S. economy is benefiting from a decline in oil prices renewed expectations of a tightening in monetary policy by the U.S. Federal Reserve around the middle of next year. Spot gold dipped 0.95% to $1,198.77 an ounce by 2:52 p.m. Platinum lost 2.1% to $1,211.25 an ounce, while silver was flat at $16.42 an ounce and palladium edged 0.6% lower to $798.50 an ounce. (Reuters)