Malaysia

· Bank Negara: Malaysia Has Moved On From Capital Flows Controls. Malaysia has “moved on” from using controls to manage capital flows, its central bank said, signalling it would not resort to such measures amid a falling currency and slowing economic growth. “Extreme measures such as capital controls are for extreme periods. We are certainly not experiencing such extreme conditions,” the central bank said. The ringgit was Asia’s weakest currency in 2014 and has also been the most under pressure in 2015, hit by Malaysia’s dependence on foreign portfolio flows, budget pressures from falling oil revenues and concerns over indebted local companies. The country is able to absorb greater volatility as it has in the past few years liberalised its financial markets and enhanced its competitiveness, according to the central bank. (Reuters)

Asia

· China's FDI Growth Hits Record In 2014, But Pace Slower. China's foreign direct investment (FDI) rose an annual 1.7% last year, although the pace slowed from 2013 as a cooling economy and shifting drivers of growth weighed on offshore investment flows. China attracted a record US$119.56bil from foreign investors last year compared to US$117.6bil in 2013, the Ministry of Commerce said in a statement on its website on Thursday. Outbound direct investment (ODI) surged 14.1% to a new high of US$102.9bil as Chinese corporate appetite for foreign investments grew, although ODI failed to overtake FDI as some had predicted, the commerce ministry told reporters on Friday. ODI growth, however, slowed from 16.8% in 2013. Growth in FDI also slowed from 5.3% in 2013, and was the weakest in two years, indicating that the economic cool down and shifting composition of the Chinese economy are starting to temper foreign sentiment. (Reuters)

· China Broadens Visitor Tax Refunds To Boost Consumption. China has broadened a tax refund scheme for overseas visitors to make it nationwide in a bid to attract tourists and boost domestic consumption, the state-run Xinhua news agency reported late on Friday. Under the plan, foreign tourists as well as visitors from Hong Kong, Macau and Taiwan who have lived on the mainland for no more than 183 days are eligible for an 11% rebate on consumer goods purchased at designated department stores, it said. "The expansion of the program will spur inbound trips and boost the export of Chinamade commodities," it quoted Liu Shangxi, a senior Finance Ministry researcher, as saying. (Reuters)

· China’s Treasury Holdings Decline As Japan’s Rise To Record. China’s holdings of U.S. government debt declined in November for a third straight month, reaching the lowest level since January 2013, as Japan’s jumped to a record. China, the largest foreign holder of Treasuries, had $1.25 trillion as of November, $2.3b less than a month earlier, according to Treasury Department data released Friday in Washington. Japan, the second biggest, moved to within $8.9b of China’s lead, increasing its ownership by $19.1b to $1.24 trillion. The two countries account for about two-fifths of all foreign ownership of Treasuries, which gained $53.5b in November to $6.11 trillion, the figures showed. Of that total, $4.13 trillion were government holdings. (Bloomberg)

· Bank Of Korea More Worried About Household Debt Than Growth. The South Korean central bank chief's surprisingly stern warning on Thursday against betting on an imminent policy easing showed it was far more concerned about rising household debt than uncertain economic growth. This concern makes sense, given that household debt – already among the heaviest in the world at 1.6 times average disposable income – has been growing at its fastest in years over recent months on the back of a recovering property market. Reuters calculations show each South Korean household was carrying some 40 million won (US$37,000) of loans owed to financial institutions as of November. (Reuters)

· Singapore December Exports Post Surprising Rise. Singapore's key non-oil exports surprisingly rose in December, primarily because electronics shipments reverted to an expansion. Exports of goods made in Singapore rose 2.3% in December compared with a year earlier, after a downwardly revised 0.8% gain in November, trade promotion agency International Enterprise Singapore said Friday. The median estimate of five economists in a Dow Jones Newswires poll was for December exports to contract 2.2% from a year earlier. (Dow Jones Newswires)

USA

· U.S. Manufacturing Output Expands Modestly In December. U.S. manufacturing output rose modestly in December, slowing from the torrid gains registered a month earlier but still signaling that American industry is weathering the impact of a strong dollar and weaker overseas markets. Factory output rose 0.3% last month, the Federal Reserve said on Friday. That marks the fourth straight month of growth although the pace was slower than the revised 1.3% expansion in November. (Reuters)

· U.S. Consumer Sentiment At Highest In 11 Years. U.S. consumer sentiment rose in January to its highest in more than a decade on gains in jobs and wages and on lower gasoline prices, a survey released on Friday showed. The University of Michigan's preliminary reading on the overall index on consumer sentiment for this month came in at 98.2, the highest since January 2004 and above the median forecast of 94.1 among 72 economists polled by Reuters. The final December reading was 93.6. The survey's gauge of consumer expectations rose to 91.6 from 86.4, beating the 87.0 forecast. The survey's barometer of current economic conditions rose to 108.3 from 104.8 and above the 105.4 (Reuters)

· Gasoline Dampens U.S. Inflation; Mid-Year Rate Hike In Doubt. U.S. consumer prices recorded their biggest drop in six years in December and a gauge of underlying inflation was flat, which could make the Federal Reserve more cautious about raising interest rates. The Labor Department said its Consumer Price Index fell 0.4% last month, the largest decline since December 2008, after sliding 0.3% in November. In the 12 months through December, the CPI increased just 0.8%, the weakest reading since October 2009 and a sharp deceleration from November's 1.3% rise. (Reuters)

Europe

· European Car Sales Return To Growth After Six Years. Car sales in the European Union rose in 2014 for the first time in six years, according to the industry trade association ACEA. Sales were up 5.7% to 12,550,771, fuelled by government scrappage schemes and wholesale orders from companies. There was also a shift in sales to cheaper brands, with Dacia and Skoda reporting some of the biggest sales rises. Spain and the UK saw a sales jump in 2014, up 18% and 9.3% respectively. The ACEA said in a statement that in December sales rose 4.7% year-on-year, the 16th consecutive monthly rise. (BBC)

· Swiss Finance Minister Says Economy Will Withstand Loss Of Cap. Swiss officials sought to reassure the country on Sunday that a shock decision by the central bank to scrap its cap on the franc would not destabilize the economy ahead of a crucial week in which the European Central Bank could announce a massive bond-buying program. Finance Minister Eveline Widmer-Schlumpf said she expects the exchange rate to settle down at around 1.10 per euro, a level she believes firms in the export-orientated country should be able to withstand. "I'm confident that the economy will be able to cope with this decision. Companies are in a far better position than in 2011 when the cap was introduced," she told the SonntagsBlick and Schweiz am Sonntag newspapers. (Reuters)

· Greek Central Bank Asks ECB To Allow Emergency Bank Lending Line If Needed. Greece's central bank has moved to protect its banks from any fallout from the coming general election, asking the European Central Bank to approve a stand-by domestic emergency funding line, a Bank of Greece official said on Saturday. The move comes after two major banks applied to be able to tap an emergency liquidity assistance (ELA) window on Friday as Greeks withdraw cash before the snap election on Jan. 25. "We have sent a request to the ECB on ELA approval for all four major banks to have a shield for the banking system," the official said, declining to be named. "It is up to each bank to decide whether it will use the funding line," the official added without providing further details. (Reuters)

Currencies

· Swiss Fallout Drives Euro To 11-Year Low Against Dollar. The euro fell to another 11-year low against the dollar Friday, a day after the Swiss National Bank’s surprise decision to eliminate its exchange-rate cap removed a source of support for the shared currency. The euro briefly traded under $1.15, its lowest level against the buck since 2003. The euro was last at $1.1567 to the dollar late Friday, down 0.57% on the day and 2.3% on the week. The euro tumbled to 1.0068 to the franc, from a high of 1.0252 franc earlier in the session. The shared currency is down about 21% against the swiss franc for the week — the largest one-week decline since 2006. The dollar bought 0.8587 Swiss franc, up from 0.8391 Thursday evening. For the week, however, the dollar lost 15.34% relative to the Swiss currency — also the largest weekly decline since 2006. The ICE U.S. dollar index a measure of the greenback against a basket of six-rival currencies rose 0.82% to 93.1320 and up 1.3% for the week. Following the release of the survey data, the pound slipped lower, finishing at $1.5151, erasing gains against the dollar from earlier in the session, and ending the week flat against the pound. In other currencies, the dollar gained against the yen after weakening Thursday. It traded at ¥117.61, up from ¥116.31 Thursday afternoon. The dollar had traded at ¥118.5 last Friday. (Marketwatch)

Commodities

· Oil Closes Up For First Week In Eight After Supportive Reports. U.S. crude oil prices staunched seven weeks of losses rising 33 cents on the week as it rallied just before settlement because of short covering ahead of the contract expiration Tuesday. Prices received a strong boost from a report by the International Energy Agency (IEA), which said there were signs lower prices had begun to curb production in some areas, including North America. WTI settled up $2.44 at $48.69 a barrel. Global Brent crude futures for March settled up $1.90 at $50.17. (Reuters)

· Risk Aversion Puts Gold On Track For Biggest Weekly Gain Since 2013. Gold rose to a four-month high on Friday and was set to increase 4.5% for the week, its biggest weekly gain since August 2013, as investors sought safety from volatility in wider markets after Switzerland unexpectedly abandoned a cap on the franc. Spot gold was up 1.3% at $1,277.16 an ounce at 2:27 p.m. EST (1927 GMT), after touching a four-month high of $1,281.50 earlier in the day. On Thursday, the metal rose 2.6%, the most in six weeks, after the Swiss National Bank's move. Spot silver rose 4.6% to $17.65 an ounce, after surging 5.5% to $17.81, the highest since Sept. 24. Platinum rose 0.6% to $1,261.80 and palladium slipped 1.6% to $751.00 an ounce. (Reuters)