Malaysia

· Broad Money Grows 7.1% In Nov. Broad money (M3) grew by 7.1% in November driven by credit extended to the private sector by the banking system, coupled with higher net claims on the government, said Bank Negara Malaysia (BNM). In a statement today, BNM said net financing to the private sector grew at a relatively stable pace of 8.7% in November due to higher growth in outstanding banking system loans amid moderation growth of the private debt securities. On banking system capitalisation, BNM said it remained at strong levels, with the Common Equity Tier 1 Capital Ratio, Tier 1 Capital Ratio and Total Capital Ratio at 12.6%, 13.3% and 15.3%, respectively. Net impaired loans, it said, remained at 1.3% of net loans, while the loan loss coverage ratio remained above 103.3%. (Bernama)

· November Domestic PPI Declines 1.5%. Malaysia’s domestic Producer Price Index (PPI) for November declined 1.5% to 124.9 from 126.4 in the same month last year. In a statement today, the Statistics Department said month-on-month, the domestic PPI, however, remained the same at 124.9 from October. The PPI for local production fell 0.2% while import price index rose by 0.1%, it said. “Year-on-year, comparison showed that the PPI for local production declined by 1.8% and the import price index moved up by 0.3%. “The index for mining decreased 15.5% and for agriculture by 4.8%. However, index for electricity, gas and water supply surged 6.2%, fishing by 3.2% and manufacturing by 0.8%,” it said. The PPI for local production fell by 0.2% in November compared with the previous month, due to the negative changes in two categories of mining (2.9%) and electricity, gas and water supply (0.9%). In contrast, index for agriculture rose 1.6%, manufacturing 0.2% and fishing 0.1%. The import price index for November rose 0.3% to 113.1 from 112.8% a year ago. (Bernama)

· Rubber Market Ends Higher. The Malaysian rubber market extended its gain for the fifth consecutive day today to close the half-day trading higher, a dealer said. He told Bernama the market remained upbeat over the positive sentiment brought by the disruption in raw material supply owing to heavy rain and flood in both Peninsular Malaysia and Southern Thailand, the main rubber growing areas in the region. At the close, the Malaysian Rubber Board’s official physical price for tyregrade SMR 20 increased nine sen to 524 sen a kg, while latex-in-bulk rose 2.5 sen to 377.5 sen a kg. (Bernama)

Asia

· S. Korea Inflation Eases, Bok Warns On Price And Policy Linkxxx. South Korea reported its lowest inflation in more than 15 years, which could reinforce expectations for an interest rate cut early in 2015 – though the central bank governor seems to feel there’s no hurry for one. December’s consumer price index rose 0.8% from a year earlier, Statistics Korea said yesterday. (Reuters)

· China Factory Gauge Slips To Lowest Level Since June 2013. A Chinese manufacturing gauge slipped to the lowest level in 18 months, adding pressure on policy makers to do more to support growth in the world’s second-biggest economy. The government’s Purchasing Managers’ Index (CPMINDX) fell to 50.1 in December from 50.3 in November, according to data released today by the statistics bureau and the China Federation of Logistics and Purchasing in Beijing. That compared with a median estimate of 50 in a Bloomberg News survey of analysts. A separate manufacturing index released yesterday by HSBC Holdings Plc and Markit Economics also declined (see following report). The government’s manufacturing index was based on a survey of purchasing executives at 3,000 companies. (Bloomberg)

· China Factory Activity Contracts In December As Slowdown Deepens. Activity in China's factory sector shrank for the first time in seven months in December; a private survey showed on Wednesday, highlighting the urgency behind a series of surprise easing moves by Beijing in the past two months. The weak performance will add to the debate over whether Beijing needs to roll out more support measures to avert a sharper economic slowdown or fast-track market reforms to stimulate demand - or both. The final HSBC/Markit Purchasing Managers' Index (PMI) for December came in at 49.6, just below the 50.0 level that separates growth from contraction. The number was slightly higher than a preliminary "flash" reading of 49.5 but down from the final 50.0 in November. (Reuters)

U.S.A.

· U.S. Jobless Claims Rise, But Labor Market Still Firming. The number of Americans filing new claims for jobless benefits rose more than expected last week, but the trend remained consistent with sustained strength in the labor market. Initial claims for state unemployment aid increased by 17,000 to a seasonally adjusted 298,000 for the week ended Dec. 27, the Labor Department said on Wednesday, after four straight weeks of declines. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 250 to 290,750 last week. It has remained below the 300,000 mark for 16 straight weeks. (Reuters)

Currencies

· Dollar Has Its Best Year Since 2005. The U.S. dollar ended its strongest year since 2005 with gains versus major rivals as investors penciled in further strength in the U.S. economy and diverging monetary policy paths between a more hawkish Federal Reserve and dovish European and Japanese central banks. The benchmark DXY which measures the greenback against a basket of six rival currencies, traded at 90.269 in late North American trade, up 0.3% from Wednesday and by 12.8% since the end of 2013. The wider WSJ Dollar Index rose 0.38 point on Wednesday, to 83.04. The euro is down around 12% versus the dollar in 2014, which is also the biggest drop since 2005. The U.S. currency has advanced 13.8% against the yen. In other currencies, the pound rose to $1.5578, from $1.5555 on Tuesday, but lost 5.9% against the U.S. unit for the year. The Australian dollar exchanged hands at 81.81 U.S. cents, down from 81.84 cents on Tuesday. The Aussie lost 8.3% versus the U.S. unit in 2014. (Marketwatch)

· Ringgit Closes Higher Against US Dollar. The ringgit extended early gains to close higher against the US dollar today on continued buying interest for the local currency, a dealer said. As at 5pm, the ringgit was quoted at 3.4950/4980 against the greenback compared with 3.4970/5000 on Tuesday. It appreciated against the yen to 2.9222/9252 from 2.9256/9289 on Tuesday but weakened against the pound to 5.4424/4485 from 5.4340/4397 yesterday. The ringgit fell against the Singapore dollar to 2.6451/6490 from Tuesday’s 2.6432/6475 but went up against the euro to 4.2475/2522 from 4.2572/2613 previously. (Bernama)

Commodities

· Brent Falls Towards $57 As Demand Concerns Outweigh Supply Disruptions. Brent crude prices dropped towards $57 a barrel on Wednesday as weak Chinese manufacturing data and demand concerns outweighed supply disruptions in Libya. China's factory sector shrank for the first time in seven months in December, with the final HSBC/Markit Purchasing Managers' Index (PMI) for this month coming in at 49.6. The final reading was higher than a preliminary reading of 49.5, but down from the final 50.0 in November. Brent for February delivery was down 79 cents at $57.11 as of 0728 GMT, after earlier dropping as low as $56.87. U.S. crude for February delivery was down 61 cents at $53.51. (Reuters)

· Gold Falls On Oil, Dollar; Poised To End 2014 Down 2 Pct. Gold fell 1.5% on pressure from weak oil prices and gains in the U.S. dollar on Wednesday, and was poised to end 2014 down a slight 2% after falling below $1,200 an ounce. The impact of a stronger dollar was partially offset by demand from investors worried about tensions in Russia and political uncertainty in Greece. Bullion was on track for a small fall this year after a turbulent 2013, when prices fell by a third following 12 years of gains. Spot gold was down 1.5% at $1,182.30 an ounce by 2:39 p.m. EST (1939 GMT). On Tuesday, it had climbed to a near two-week high of $1,209.90 as concerns over tension between Russia and the West weakened the dollar and stock markets. Silver fell 3.9% to $15.63 an ounce and was on track for a 19.5% annual decline and platinum, down 1.1% at $1,200.40 an ounce, was headed for a yearly fall of 12%. With an 11% jump, palladium was the bestperforming precious metal this year, mostly on supply concerns from top producer Russia. Palladium prices were down 0.9% at $793.00 an ounce on the day. (Reuters)