Malaysia

· Exports in December increased by 2.7% YoY, compared to 2.1% seen in November. This exceeded ours, as well as consensus expectations of 1.0%. The monthly comparison saw a 6.2% rebound, after falling by 2.0% previously. This can be largely attributed to the Christmas and New Year celebrations worldwide boosting sales. The weaker ringgit also added a slight extra advantage to Malaysia’s exporters. For the whole of 2014, exports achieved a 6.4% annual rise compared to just 2.4% in 2013. Imports in December also posted above forecasts, managing a 4.2% rise, beyond the expected 2.6%. On a month-on-month basis, imports rose by 11.2% following a 17.7% fall previously. In addition to the usual seasonal factors boosting imports for consumption, it was also indicative of better external demand going forward. For the whole of 2014, overall imports increase by 5.3%, slightly weaker compared to 6.9% in 2013. As a result of stronger imports, trade surplus in December narrowed to RM9.2b from RM11.b. For the whole of 2014, trade achieved a surplus of RM83.1b, surpassing 2013’s RM71.3b. Total trade in the final month of the year rose to 3.4%, following a 1.2% increase in the preceding month. For the whole of 2014, total trade expanded by 5.9% compared to 4.5% in 2013. (Please refer to Economic Viewpoint for further comments)

· Trade, Exports Expected To Grow Between 2, 3% In 2015 – Mustapa. Malaysia's trade and exports are expected to grow between two and three% next year, says International Trade and Industry Minister Datuk Seri Mustapa Mohamed. Mustapa said the modest growth projection was due to the drop in world growth anticipated from 3.8% to 3.5%. "We also face uncertainties created by fluctuations in oil prices and other commodities as well as mixed impact on sectors by the fluctuating exchange rate of the ringgit. "However, we believe there will be recovery in the oil prices and there are pluses and minuses of the current ringgit performance to our exports," he said at a briefing on "Malaysia's Trade Performance 2014" here Thursday. (Bernama)

Asia

· Indonesia 2014 Growth Slowest In 5 Years. Indonesia's economic growth slipped to its weakest in five years in 2014 as weak exports and investments dragged, underlining the challenges facing the country's new President Joko Widodo. Southeast Asia's largest economy is finding it harder to fire up its engines of growth with the ending of the commodities boom and as high interest rates weigh on domestic demand. Exports of primary commodities such as coal and rubber fell last year, as growth slowed in large markets, notably China, while a mineral export ban hit copper and nickel ore shipments. Oil and gas exports also fell. Gross domestic product expanded 5.02% for the full year, slower than growth of 5.58% in 2013. In the fourth quarter, the economy grew a slightly better than forecast 5.01% from a year earlier, but contracted 2.06% against the third quarter, on a seasonally unadjusted basis. (Reuters)

USA

· U.S. Trade Deficit Widens; Weekly Jobless Claims Up Modestly. The U.S. trade deficit in December widened sharply to its highest level since 2012 as a stronger dollar appeared to suck in imports and weigh on exports, which could see the fourth-quarter economic growth estimate revised lower. The Commerce Department said on Thursday the trade deficit jumped 17.1% to $46.6b, the largest since November 2012. It was the biggest%age increase since July 2009 and also reflected a sputtering global economy. Wall Street had expected the trade gap to narrow to $38b. When adjusted for inflation, the deficit widened to $54.7b from $48.7b in November. While trade is on the back foot, the labor market is weathering the strong dollar and the global slowdown. Initial claims for state unemployment benefits increased 11,000 to a seasonally adjusted 278,000 for the week ended Jan. 31, the Labor Department said in a separate report. The increase, which was less than economists' expectations for a rise to 290,000, left intact the bulk of the prior week's huge decline, which had taken claims to their lowest level since April 2000. (Reuters)

· U.S. Productivity Falls In Fourth Quarter; Labor Costs Rise. U.S. nonfarm productivity braked more sharply than expected in the fourth quarter, while unit labor costs rebounded after falling in the prior three months. The Labor Department said on Thursday productivity fell at a 1.8% annual rate after rising at a revised 3.7% pace in the third quarter. Economists had forecast productivity, which measures hourly output per worker, rising at a 0.5% pace. Unit labor costs, a key gauge of inflation and profit pressures that measures the price of labor for any given unit of output, increased at a 2.7% rate in the fourth quarter after falling at a 2.3% rate in the third quarter. (Reuters)

Europe

· No More Orders Or Austerity From Europe, Greek Pm Says. Greek Prime Minister Alexis Tsipras tore into his European Union allies on Thursday, pledging to "put an end once and for all" to the EU's austerity policies. In a defiant first speech to his left-wing parliamentary group after returning empty-handed from a European tour, Tsipras said Athens was no longer open to being told what to do. "Greece won't take orders any more, especially orders through emails," he said. "Greece is no longer the miserable partner who listens to lectures to do its homework. Greece has its own voice". In an apparent reference to the tough stance taken by the European Central Bank and others, Tspiras said: "Greece cannot blackmailed because democracy in Europe cannot be blackmailed." (Reuters)

· Greece Says Banks Protected Via Access To Emergency Liquidity Assistance. Greece's finance ministry said on Thursday that the country's banking system is fully shielded through its access to emergency liquidity assistance (ELA) available from the domestic central bank. The ministry also said the ECB's decision puts pressure on the Eurogroup to reach a deal that would be "mutually beneficial" for both Athens and its eurozone partners. (Reuters)

· European Auto Recovery Lifted By Cheap Oil, Southern Markets. The car sales recovery in Western Europe gathered pace in January with a 7.1% gain as southern markets including Spain continued to bounce back, according to industry data published on Thursday. Registrations last month increased to 960,531 cars from 897,008 a year earlier, based on data and estimates compiled by consulting firm LMC Automotive, helped by low oil prices and returning consumer confidence. This compared with a 4.7% gain in December. (Reuters)

Currencies

· Dollar Falls Versus Euro On Swiss Bank Speculation, Optimism On Greece. The U.S. dollar tumbled against the euro while the euro rose against the Swiss franc on Thursday on speculation the Swiss National Bank was buying euros and as traders took a sanguine view on developments surrounding Greece. The euro was up 1.21% against the dollar at $1.14835 after hitting a low of $1.13040. The euro hit 1.06425 franc, its highest against the franc since Jan. 15, when the Swiss central bank stunned markets by scrapping the three-year-old cap on its currency. The Swiss franc, meanwhile, benefited from the dollar's weakness. The greenback was last down 0.35% against the franc at 0.92245 franc The dollar was last up 0.23% against the yen at 117.55 yen. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.49% at 93.524. (Reuters)

Commodities

· Oil Up Over 4% On Libya Raid, China Easing; Volatility Seen. Crude prices closed up more than 4% on Thursday as rising violence in producer Libya and an expected boost in oil demand from China's central bank easing helped the market rebound from a sharp rout in the previous session. Benchmark Brent crude futures settled up $2.41, or 4.5%, at $57.57 a barrel. U.S. crude futures, also known as West Texas Intermediate (WTI), finished up $2.03, or 4.2%, at $50.48. (Reuters) · Gold Falls On Greek Uncertainty; U.S. Data Eyed. Gold fell on Thursday on uncertainty in Greece after the European Central Bank said it would no longer accept Greek bonds in return for funding. Spot gold was down 0.5% at $1,263.50 an ounce by 2:22 p.m. EST (1922 GMT) after falling 1% to the session low at $1,256.22. Spot silver fell 0.8% to $17.22 an ounce. Platinum rose 1.1% to $1,249.90, and palladium gained 0.5% to $793.15. (Reuters)