Malaysia

· Malaysia’s GDP Growth For 2014 Expected To Be In Line With Forecast. Bank Negara will not allow any “systemic” effect from an individual company to impact the country’s economy, according to governor Tan Sri Dr Zeti Akhtar Aziz. “We will never comment on an individual entity, but we have arrangements to deal with it so that no individual entity will have a systemic implication on the overall financial system of our economy,” she said when asked on 1Malaysia Development Bhd (1MDB)’s huge outstanding debts. On another note, Zeti said the country’s gross domestic product (GDP) growth for 2014 was expected to be within forecast. GDP growth for 2014 is expected to be between 5.5% and 6% and has been revised down to 4.5%-5.5% this year from the initial forecast of 5%-6%. (The Star)

· Malaysia’s Financial System Can Withstand Surge In Capital Outflow, Inflow. The ringgit will trend towards a level reflecting the economy's fundamentals, said Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz. "The current level of the ringgit reflects events that are unfolding in the global environment," she said to the media after the signing ceremony between the government and World Bank Group. Zeti said the financial system would be able to withstand the surge in both capital inflow and outflow. (NST)

Asia

· Thai Exports Fall In 2014, Pressure Mounts For Rate Cut. Thai exports fell for a second straight year in 2014, a blow for the military government as it struggles to get the economy growing and possibly increasing pressure on the central bank to cut interest rates today. Exports are worth more than half of the country's gross domestic product. For 2014, exports were 0.4% lower than the previous year, the Commerce Ministry reported yesterday. The rate of decline was slightly steeper than the previous year, when exports contracted 0.3%. For December, exports rose 1.9% from a year earlier, well above the 0.5% gain seen in a Reuters poll. Imports in the last month of 2014 were down 8.7%, much lower than poll's projected fall of 2.45%, while for the full year they tumbled 9%. (Reuters)

· China Money Rate Drops As PBOC Injects Funds Via Reverse Repos. China’s benchmark money-market rate fell as the central bank added funds to the financial system, ensuring cash supply as demand spikes before the Lunar New Year holidays. The People’s Bank of China conducted 60b yuan ($9.6b) of reverse-repurchase operations Tuesday for seven and 28 days, keeping rates close to market levels. The monetary authority offered 30b yuan of 28-day contracts at 4.8% and a similar amount of seven-day reverse repos at 3.85%. China’s New Year holidays start Feb. 18. (Bloomberg)

· China Industrial Profits Fall Most Since 2011 Amid Slowdown. Chinese industrial companies’ profits declined the most in at least three years last month, underscoring the challenge facing the nation’s former growth drivers as the economy slows and commodity prices slump. Industrial profits fell 8% in December from a year earlier, the National Bureau of Statistics said in Beijing on Tuesday, the biggest drop since at least October 2011, according to data compiled by Bloomberg. China will strive for 8% growth in industrial output this year, an official said at a briefing according to a transcript on a government website. (Bloomberg)

USA

· U.S. Services Sector Activity Growth Accelerates In January. New York - U.S. services sector growth rebounded modestly in January but companies reported the weakest level of new business growth in more than five years, an industry report showed on Tuesday. Financial data firm Markit said its preliminary, or "flash," reading of its Purchasing Managers Index for the service sector rose to 54.0 in January from 53.3 in December, which had matched a 10-month low. The January figure marked the first rise in the index since it peaked in June with a reading of 61. A reading above 50 level separates expansion from contraction. (Reuters)

· Payrolls Rose In 41 States In December, Led By Texas, New York. Payrolls increased in 41 states in December and the unemployment rate fell in 42 as the U.S. labor market closed out its best year since 1999. Texas led the nation with a 45,700 increase in payrolls, followed by New York with 30,400 additional jobs, figures from the Labor Department showed Tuesday in Washington. Broad-based advances in hiring are helping to lift Americans’ confidence and spur consumer spending, which accounts for about 70% of the economy. Growth in job creation and the lowest U.S. unemployment rate since 2008 also indicate that workers may be getting closer to a pickup in wages. (Bloomberg)

· Orders For US Durable Goods Fell 3.4 Percent In December. Orders for long-lasting manufactured goods dropped sharply in December, dragged lower by a big decline in demand for commercial aircraft. The Commerce Department says orders for durable goods fell 3.4 percent in December following a 2.1 percent decline in November. The weakness was led by a 55.5 percent plunge in the volatile category of commercial aircraft. There was also weakness in a number of areas, and a key category that serves as a proxy for business investment plans edged down 0.6 percent in December after a similar decline in November and a 1.8 percent fall in October. (AP)

· Home Prices In 20 U.S. Cities Increased 4.3% In November. Home prices in 20 U.S. cities rose at a slower pace in the year ended in November, a sign the industry struggled to find momentum even amid low mortgage rates. The S&P/Case Shiller index of property values increased 4.3% from November 2013 after rising 4.5% in the year ended in October, the group said Tuesday in New York. The median projection of 28 economists surveyed by Bloomberg called for a 4.3% yearover- year advance. Nationally, prices rose 4.7% after a 4.6% gain in the year ended in October. (Bloomberg)

· Sales Of New U.S. Homes Rose More Than Forecast To End 2014. Purchases of new homes in the U.S. jumped in December to the highest level in more than six years, a sign the industry is poised to keep expanding in 2015. Sales increased 11.6% to a 481,000 annualized pace, exceeding all estimates in a Bloomberg survey of economists and the most since June 2008, figures from the Commerce Department showed Tuesday in Washington. Demand increased in three of four regions. (Bloomberg)

· Consumer Confidence In U.S. Rises More Than Forecast On Jobs. Consumer confidence rose more than forecast in January to the highest level since August 2007 as Americans took heart in an improving labor market and prospects for higher earnings. The Conference Board’s consumer confidence index increased to 102.9 this month from a revised December reading of 93.1, the New York-based private research group said Tuesday. (Bloomberg)

Europe

· UK Economy Records Fastest Growth Since 2007. The UK's economy grew by 2.6% last year, the fastest pace since 2007 and up from 1.7% in 2013, official figures have shown. Figures from the Office for National Statistics (ONS) showed the economy grew by 0.5% in the final three months of 2014. That was a slowdown from 0.7% growth recorded in the previous three months. Economists were mixed over whether the loss of momentum in the final quarter might be temporary or prolonged. The ONS's chief economist, Joe Grice, said it was "too early to say" if this slowdown would persist. "The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic," he said. (BBC)

Currencies

· Dollar Tumbles After Surprisingly Weak Durable-Goods Orders. The U.S. dollar weakened against its main rivals Tuesday after the Commerce Department said durable-goods orders were surprisingly weak in December. The euro climbed to $1.1351, from $1.1239 late Monday. The dollar traded at to ¥117.81, compared with ¥118.48 late Monday in New York. The franc fell to its lowest level since the SNB ditched the trading cap. The euro traded as high as 1.0381 francs, from 1.0150 earlier in European trading. The shared currency was worth 1.0258 francs in recent trade. The dollar rose to 0.9042 francs, up from 0.9030 late Monday. In other currencies, the pound rose to $1.5192 after the durablegoods orders data. In emerging markets news, the Russian ruble rebounded after falling to its lowest level against the dollar since its mid-December collapse Monday, after Standard & Poor’s Ratings Services cut Russian debt to junk. The ruble traded at 66.8 rubles Tuesday, down from 68.8 Monday. The rand traded at 11.55 to the dollar, down from 11.44 to the dollar Monday. The ICE U.S. Dollar Index, a measure of the dollar’s value against a basket of six trade-weighted currencies, was down 0.76% to 94.0860. (Marketwatch)

Commodities

· Oil Jumps On Weaker Dollar; Traders Wary Of Stock Build. Oil jumped as much as 3% on Tuesday as a weak dollar propped up commodities, but crude prices came off their highs in post-settlement trading on signs of another big U.S. supply build last week. Oil prices were up most of the day, tracking the dollar, despite concerns about rising U.S. inventories. While some traders expressed surprise with the market's behavior, others shrugged it off as they did not think oil was on the cusp of an extended recovery because of nagging worries about the global oversupply in crude. Benchmark Brent crude settled up $1.44, or 3%, at $49.60 a barrel after rallying to just a penny short of $50. The last time Brent was at $50 was on Jan. 22. U.S. crude futures finished up $1.08, or 2.4%, at $46.23 a barrel, after a session peak at $46.55. The API data, released two hours after the close in U.S. crude, pared the trading gains. Brent was at $49.25 a barrel by 5:00 p.m. ET (2200 GMT), while U.S. crude traded below $45.80. (Reuters)

· Gold Rises On Soft Dollar Ahead Of Fed Policy Statement. Gold rose 1% on Tuesday after two sessions of losses, as the dollar and shares eased ahead of a U.S. Federal Reserve policy meeting that may push back expectations for when U.S. interest rates will start to rise. Spot gold was up 1% at $1,293.06 an ounce by 2:27 p.m. EST (1927 GMT). The metal had fallen 1.6% in the previous two sessions on strong equities and uncertainties over the Greek election. Gold hit a fivemonth high of $1,306.20 on Thursday. Among other precious metals, spot silver was up 0.9% at $18.03 an ounce. Palladium was up 0.1% at $781 an ounce, while platinum rose 0.9% to $1,259.25 an ounce. (Reuters)