Malaysia

· Industrial Production In October Saw An Annual Growth Of 5.0% YoY a slight moderation from 5.4% seen in September. This is however, above market polls of 4.2%. On a monthly comparison, industrial production increased by 3.5% MoM (September: 0.9%) whilst the seasonally adjusted index registered a 0.6% MoM expansion. The manufacturing sector continues to expand at a moderating pace, registering a 3.0% YoY growth in October (September: 4.7%). The monthly comparison expanded at the same pace as previously, 2.2% MoM but the seasonally adjusted index posted a fall of 0.4% MoM. This adds caution to output performance moving forward. (Please refer to Economic Viewpoint for further comments)

Asia Pacific

· Japan Machinery Orders Tumble In Another Blow To Economy And PM Abe. Recession-hit Japan suffered a fresh blow on Thursday as data showed a key gauge of capital spending tumbled in October - a worrying sign for its recovery given that business investment was a big drag on the economy in the third quarter. The 6.4% on-month fall in core machinery orders, a highly volatile data series seen as an indicator of capital spending in the coming six to nine months, suggests business investment will struggle to underpin a rebound in the economy. The figure issued by the Cabinet Office was far worse than a 2.4% fall forecast by economists in a Reuters poll, and followed a 2.9% month-on-month gain in September. (Reuters)

· China November Fiscal Spending Revives, But Remains Lacklustre. China's fiscal expenditure picked up in November, but only slightly, as local governments boosted spending on targeted projects to support the economy, the finance ministry said. Fiscal expenditure ticked up 0.8% from a year earlier after a fall of 5.7% in October, as spending had been front loaded this year, data showed on Thursday. Central government spending in November fell 9.9% from a year earlier "mainly due to key spending items being allocated in advance", the ministry said. Local government spending rose 2.4%, it said. (Reuters)

· China's 2015 Monetary Policy Won't Be Too Tight Or Loose: Xinhua. China's monetary policy will not be too tight or too loose next year as authorities try to sustain a reasonable pace of growth in the economy, which faces considerable headwinds, state media cited the government as saying on Thursday. Investment will remain a key driver of growth as authorities ensure that exports, consumption and investment - also known as the three horse carriages for growth in China -play equal parts in powering the economy, Xinhua said. "There will be greater focus on monetary policy being appropriately tight or loose," Xinhua cited the government as saying as it reiterated that monetary policy will be kept "prudent" and fiscal policy "pro-active". Policies would be fine-tuned in a targeted way, Xinhua said, without further details. (Reuters)

· Bank Of Korea Holds Rates Steady, Cut Seen In Early 2015. South Korea's central bank governor flagged downward revisions to forecasts for inflation and economic growth, raising expectations of an imminent interest rate cut after the bank opted to hold the policy rate steady on Thursday. Governor Lee Ju-yeol described fears voiced over deflation risks as "excessive", and said the economy was being held back by structural issues despite efforts by the central bank and government to boost growth. The Bank of Korea's monetary policy committee held its base rate steady at 2.00%, as forecast by 30 out 31 analysts polled by Reuters. A majority of analysts expected a rate cut in early 2015. (Reuters)

· Indonesia Holds Interest Rate After Surprise November Increase. Indonesia’s central bank kept benchmark borrowing costs unchanged today, pausing after a surprise increase last month in response to President Joko Widodo raising subsidized fuel prices. Bank Indonesia Governor Agus Martowardojo and his board left the reference rate at 7.75%, the central bank said in Jakarta today, as predicted by all 21 economists surveyed byBloomberg News. The authority also kept the rate it pays lenders on overnight deposits, known as the Fasbi, unchanged at 5.75%. (Bloomberg)

· RBNZ Flags Future Interest Rate Rises Even As Pause Extended. New Zealand’s central bank said additional rate increases will eventually be needed even as it extended its tightening pause amid softer inflation. The currency surged. “Some further increase in the official cash rate is expected to be required at a later stage,” Governor Graeme Wheeler said in Wellington after keeping the official cash rate at 3.5%. The Reserve Bank of New Zealand lowered its forecast for the 90-day bank bill rate, suggesting borrowing costs won’t rise again until the second half of 2015. (Bloomberg)

USA

· Hiring, Cheaper Fuel Give U.S. Retailers A Boost. Shoppers basking in the glow of falling fuel prices and rising employment are opening their wallets, paying new dividends for the U.S. economic expansion in the midst of the holiday season. Retail sales rose 0.7% in November, the most in eight months, as consumers snapped up electronics, clothing and furniture, according to Commerce Department figures issued today in Washington. Other reports showed fewer Americans filed claims for jobless benefits last week and confidence climbed to the highest level in seven years. (Bloomberg)

· U.S. Business Inventories Rise. U.S. retail inventories excluding automobiles picked up in October, which could affect fourth-quarter growth estimates. The Commerce Department said on Thursday retail inventories excluding autos, which go into the calculation of gross domestic product, increased 0.3% in October. They had gained 0.2% in September. Overall business inventories increased 0.2%, in line with economists' expectations, after a 0.3% gain in September. (Reuters)

Europe

· French Core Inflation Turns Negative, Points To Deflation Risk. French core inflation turned negative in November, with the first drop in the indicator since records started in 1990 pointing to a growing risk of deflation in the euro zone's secondlargest economy. French core, or underlying, inflation excludes the most volatile consumer prices and tax measures as well as public sector prices. It contracted by 0.2% from a year ago in November and by 0.1% month-on-month. (Reuters)

· France Revises 2016, 2017 Deficit Targets After 2015 Savings. The French government revised its public deficit targets for 2016 and 2017 slightly down on Thursday following extra savings announced for 2015 to respond to EU requests for more efforts. Its budget deficit will drop to 3.6% of GDP in 2016 and 2.7% of GDP in 2017 after 4.1% in 2015 and 4.4% in 2014, the finance ministry said. This is slightly better than the latest deficit targets of 3.8% of GDP in 2016 and 2.8% in 2017. (Reuters)

· Ifo Says Weak Euro, Falling Oil Supporting German Growth. Germany's Ifo institute has revised up its expectations for growth in Europe's largest economy due to the falling euro and decline in oil prices. The Munich-based institute said on Thursday it expected German gross domestic product (GDP) to expand by 1.5% this year and next. "Falling oil prices and the slump in the euro exchange rate have helped to pull the economy out of the state of shock induced by the outbreak of the Ukraine crisis. Companies are now slightly more relaxed as they look to the future," Ifo President Hans-Werner Sinn said. (Reuters)

· Greek Unemployment Falls To 25.7% In September. Greece's jobless rate fell to 25.7% in September from a upwardly revised 26% rate in August as the country's six-year recession eases, Greek statistics agency ELSTAT said on Thursday. September's reading was the lowest since August 2012 when unemployment stood at 25.5%. The record high was set in September 2013, when unemployment hit 28%. (Reuters)

· Italy October Industry Output Falls, Disappointing Recovery Hopes. Italian industrial output was weaker than expected in October, slipping 0.1% from the month before and offering no sign of recovery for Italy's recession-bound economy, data showed on Thursday. National statistics institute ISTAT made no revision to September's steep 0.9% monthly drop and said that in the three months to October output was down 0.9% compared with May-July. (Reuters)

Currencies

· Dollar Surges Against Oil-Backed Currencies As Crude Falls Below $60. The dollar extended its gains against the ruble, Norwegian krone and Canadian dollar Thursday as crude oil prices fell below $60 a barrel, a sign that the contagion that has afflicted the ruble for the past two weeks has spread to the currencies of other major oil exporters. The dollar traded at 56.40 rubles, an all-time high. The buck traded at 7.32 krone, and 1.155 Canadian dollars, its highest level since July 2009, compared with 7.13 krone and 1.140 Canadian dollars Wednesday afternoon. The euro traded slightly below $1.24, compared with $1.245 Wednesday. The buck traded at 118.90 yen compared with ¥117.57 Wednesday. It traded flat against the pound at $1.57. The ICE U.S. Dollar Index a trade-weighted measure of the dollar’s strength against a basket of six rival currencies, rose 0.38% to 88.60. (Market Watch)

Commodities

· U.S. Crude Crashes Below $60 As Six-Month Oil Rout Continues. U.S. crude fell below $60 a barrel on Thursday, the first time in five years that it breached the psychologically-important support, as oil markets extended this week's crash on continuing oversupply concerns. U.S. crude's front-month contract settled down 99 cents, or 1.6%, at $59.95 a barrel, after falling to $59.56, its lowest since July 2009. Brent crude's front-month ended down 56 cents at $63.68, after the benchmark for global oil plumbed a 5-1/2-year low at $63.48. (Reuters)

· Gold Barely Changed On Mixed Economic Signals. Gold was little changed in choppy dealings on Thursday, amid conflicting signals as the firm dollar applied pressure and weak U.S. economic data spurred safe-haven buying, fueling hopes that interest rates will rise. Spot gold was up 0.7% at $1,227.53 an ounce by 2:49 p.m. EST (1949 GMT), after falling nearly 1% to $1,219.90 per ounce. Among other precious metals, silver snapped a three-day rally, falling 0.1% to $17.04 an ounce, while platinum was down 0.4 at $1,238.70 an ounce and palladium gained 0.6% to $815.25 an ounce. (Reuters)