Malaysia

· Inflation In November Increased To 3.0% YoY, after posting a 2.8% rise in the previous month. This is above polls expectations of 2.7%. It is largely on account of the double-digit increase of 10.5% in the alcohol & tobacco index, though the transportation index also played a role in the elevated inflation due to the reduction in petrol subsidy in October. The monthly comparison saw a 0.5% MoM increase in the consumer price index, the same level as the preceding month. The core inflation (which removes the more volatile food & beverages index), saw a 3.1% annual rise, above the 2.7% seen in October. It saw a 0.7% MoM increase, slower than 0.9% MoM previously. For the period of January to November, the CPI rate averaged at 3.2% YoY versus 2.0% seen in the same period in 2013. (Please refer to Economic Viewpoint for further comments)

· World Bank Cuts 2015 Malaysia GDP Forecast. The World Bank has cut its 2015 growth forecast for Malaysia’s economy to 4.7% from an earlier estimate of 4.9% on expectations of slower export growth and investments in the oil and gas industry as well as moderate private consumption next year. The intergovernmental financial organisation, however, has maintained its expectations of a 5.7% gross domestic product (GDP) growth for Malaysia for 2014. “It is still a robust and strong growth for an advanced middle-income economy,” Ulrich Zachau, World Bank’s country director for South-East Asia, said of the revised 2015 GDP growth estimate for Malaysia. “It compares well with other countries in the region, and we are positive about the outlook for Malaysia as good policies are in place to support the country’s economic stability and growth,” (The Star)

Asia Pacific

· ADB trims growth forecasts for developing Asia, says cheaper oil good for most. The Asian Development Bank slightly trimmed its growth forecast for developing Asia for this year and next, but said sliding prices for oil should help economies in the region push through with growth reforms. In its update to the 2014 outlook, ADB said on Wednesday developing Asia was now expected to grow 6.1% this year, a tad below its 6.2% forecast in September. Growth in 2015 was seen at 6.2%, from 6.4% previously. "While growth in the first three quarters of this year was somewhat softer than we had expected, declining oil prices may mean an upside surprise in 2015 as most economies are oil importers," said ADB Chief Economist Shang-Jin Wei. (Reuters)

· Asian Business Sentiment Rebounds In Fourth Quarter With India Most Optimistic. Business sentiment among Asia's top companies rebounded in the fourth quarter to the second-highest level in almost three years, a Thomson Reuters/INSEAD survey showed, helped by a stronger U.S. economy and a plunge in oil prices. The Thomson Reuters/INSEAD Asian Business Sentiment Index .RACSI increased to 72 in the fourth quarter from 66 in the previous three months. The result was only slightly below the 74 reading of the second quarter which was the highest since early 2012. A reading above 50 indicates an overall positive outlook. Indian businesses provided the biggest boost to the index, with companies reporting a maximum score of 100 for the third consecutive quarter as they look to new Prime Minister Narendra Modi to speed up economic recovery. (Reuters)

· Japan Export Growth Slows, Maintains Policy Pressure On Abe. Japan's exports grew for a third straight month in November from a year earlier, but much more slowly than expected and despite a sharp fall in the yen, maintaining economic policy pressure on Prime Minister Shinzo Abe days after his ruling coalition's big election win. The 4.9% rise in exports was much weaker than a 7.0% gain seen by economists in a Reuters poll, slowing from a 9.6% gain in October, Ministry of Finance data showed. (Reuters)

· New Zealand Economy Grows Faster Than Central Bank Forecast. New Zealand’s economic growth accelerated in the third quarter more than economists and the central bank forecast as low interest rates and record immigration stoked consumption. Gross domestic product increased 1% from the second quarter, when it advanced 0.7%, Statistics New Zealand said in Wellington today. That’s more than the median forecast of 0.7% from a survey of 12 economists by Bloomberg News. From a year earlier, GDP rose 3.2%. Growth was faster than the Reserve Bank of New Zealand’s 0.9% forecast published last week, when it signaled a prolonged pause in its tightening cycle amid lower inflation than previously projected. Governor Graeme Wheeler said Dec. 11 that  interest rates remain stimulatory and further increases are expected to be required “at a later stage.” (Bloomberg)

Americas

· Fed Confident On U.S. Growth, Opens Door Wider To Rate Hike. The Federal Reserve on Wednesday offered a strong signal that it was on track to raise interest rates sometime next year, altering a pledge to keep them near zero for a "considerable time" in a show of confidence in the U.S. economy. Fed Chair Janet Yellen told a news conference that "patient" meant the policy-setting Federal Open Market Committee was unlikely to hike rates for "at least a couple of meetings," meaning April of next year at the earliest. (Reuters)

· U.S. Current Account Deficit Widens In Third Quarter. The U.S. current account deficit unexpectedly rose in the third quarter as an increase in exports was offset by a rewidening of the secondary income shortfall. The Commerce Department said on Wednesday the current account gap, which measures the flow of goods, services and investments into and out of the country, rose 1.9% to $100.3b from a revised $98.4b deficit in the second quarter. The current account deficit represented 2.3% of gross domestic product, unchanged from the second quarter. (Reuters)

· Biggest Price Drop Since 2008 Lifts U.S. Consumers: Economy. Prices paid by American consumers dropped in November by the most in almost six years, providing a boost to buying power that will propel economic growth. The cost of living fell 0.3%, the most since December 2008, after being little changed the prior month, according to Labor Department figures issued today in Washington. The retreat was led by a plunge in fuel that is continuing to unfold. Consumer prices rose 1.3% over the past year, the smallest gain since February and down from a 1.7% annual advance the prior month, according to the Labor Department. (Bloomberg)

· Brazil Congress Approves Lower Fiscal Goal In 2015 Budget Brazil's Congress on Wednesday approved federal budget guidelines that set a much lower savings goal for next year, in line with President Dilma Rousseff's efforts to regain fiscal credibility with more attainable targets. The new 2015 guidelines, known as LDO, set the primary budget surplus goal at 66.3b reais ($24.2b), or the equivalent of 1.2% of gross domestic product. Since Rousseff took office in 2011, the primary surplus, or excess revenues before debt payments, has shrunk from 3.1% of GDP to less than 2% and risks turning into a deficit this year for the first time in nearly two decades. In the guidelines, the government expects economic growth of just 0.8% for 2015, well below its original forecast of a 3% expansion. (Reuters)

Europe

· Wage Growth Picks Up As UK Unemployment Falls. In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%. It is the first time for six years that both measures of earnings growth have been above the inflation rate. Meanwhile, the number of people unemployed in the quarter fell by 63,000 to 1.96 million. The fall was the slowest quarterly fall for a year, leading some analysts to speculate that the rate of improvement may have peaked. The jobless rate was 6%, matching its lowest level in six years. The number of people claiming Jobseeker's Allowance in November fell by 26,900 to 900,100. (BBC)

· Russian Economy Stagnates In November - On Track To Recession In 2015. The Russian economy stagnated in November, data published on Wednesday showed, making it even more likely that the ruble's rapid collapse so far this month will push it into recession next year. Investment by Russian companies, once a staple of the country's economic performance, fell sharper than expected last month, underlining pressure from Western sanction imposed on Moscow for its role in the Ukraine crisis. Retail sales rose in line with expectations, but at a 1.8 annual increase they were a fraction of what their rise had been in the post-2008 crisis when consumer demand fueled the economy. The set of data, which also noted some increase in real wages, follows industrial production numbers, released on Monday, showing that industry output disappointed last month, falling by 0.4%, against analysts' expectations of a 1.1% rise. (Reuters)

Currencies

· Dollar Gains Against Yen, Euro After Fed Statement; Ruble Calms. The dollar rose against the yen and the euro, after trailing both currencies over the past week, after Janet Yellen said the Fed would wait before beginning its first series of Fed rate increases in more than six years. The euro traded at $1.23, its lowest level since Dec. 8, while the dollar traded at 118.70 yen, its highest level since Dec. 12. They traded at $1.25 and ¥117.07 Tuesday, respectively. The ruble traded at 61 to the dollar Wednesday after tumbling Tuesday to a record low of 80.1 to the dollar, before recovering to around 67.90 in late trade, in one of its most volatile sessions ever. The slide had come as investors worried that the central bank’s decision to hike its interest rate 650 basis points to 17% wouldn’t be enough to stop the selloff. (Marketwatch)

Commodities

· Brent Drops Below $60 As OPEC, Russia Keep Output Steady Amid Glut. Brent crude dropped below $60 a barrel on Wednesday, hovering near its lowest in five years as a supply glut dragged down prices. Oil prices skidded in recent weeks, with Brent down nearly $20 since the Organization of the Petroleum Exporting Countries (OPEC) decided to keep output steady in late November. Non-OPEC member Russia, one of the world's top producers, has also indicated that it does not plan to cut output despite a glut in the market. Brent for February delivery was down 56 cents at $59.45 a barrel as of 0349 GMT. It touched a session low of $58.50 on Tuesday, the lowest since May 2009, and has plunged 50% since June, when it was traded above $115. U.S. crude for January delivery dropped 97 cents to $54.96 a barrel after touching the lowest since May 2009 at $53.60 on Tuesday. (Reuters)

· Gold Choppy After Fed Signals On Track For 2015 Rate Hikes. Gold turned lower on Wednesday, after briefly climbing above $1,200 per ounce following the U.S. Federal Reserve's signal that it remained on track to raise interest rates in 2015. The Fed offered a strong message that it was on track to raise interest rates sometime next year, altering a pledge to keep them near zero for a "considerable time" in a show of confidence in the U.S. economy. Spot gold was down 0.4% at $1,191.45 by 2:46 p.m. EST (1946 GMT). On Tuesday, the metal's trading was volatile, hitting a session high above $1,221 then a one-week low of $1,188.41 before ending marginally firmer. Other precious metals were mixed with spot silver climbing 0.8% to $15.79 an ounce and platinum up 0.04% at $1,189.32 an ounce. Palladium was down 0.7% at $773.20 an ounce. (Reuters)