Malaysia

· Inflation In The Month Of January 2015 Was At Its Lowest In Five Years, At Just 1.0%. This is well below the December 2014 figure of 2.7% and consensus expectations of a 1.9% increase. Lower fuel costs to consumers following a change to a managed float pricing system for RON95 petrol and diesel was the main cause for the sharp reduction in inflation. The transport sub-index, which captures fuel costs, declined 6.0% during the month. (Please refer to Economic Viewpoint for further comments)

Asia

· Japan Export Growth Accelerates on Stronger Asia Demand. Japanese export growth accelerated to the fastest pace in more than a year in January, with stronger demand from Asia and the U.S. supporting a recovery in the world’s thirdbiggest economy. The value of overseas shipments jumped 17% from a year earlier, the finance ministry said Thursday, exceeding a median 13.5% forecast. Imports fell 9%, reducing the trade deficit to 1.2tr yen ($9.9b) from a record shortfall of 2.8tr yen in January last year. Export volumes rose the most in four years, signaling the yen’s drop is starting to aid an economy that struggled out of recession last quarter amid weakness in consumer and business spending. The drop in oil prices is cutting import costs (Bloomberg)

· Japan February Flash Manufacturing PMI Falls to 51.5 from 52.2 in January. Japanese manufacturing activity expanded at the slowest pace in seven months in February as domestic order growth slowed, but orders from overseas picked up in an encouraging sign that economic growth will continue to expand. The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.5 in February from a final 52.2 in January. The index remained above the 50 threshold that separates contraction from expansion for the ninth consecutive month but fell to the lowest since July last year. New orders fell to a preliminary 51.1 from 53.4 in December. The index for new export orders, however, rose to a preliminary 52.8 from a final 51.8 in the previous month as a weakening yen made Japanese products more competitive overseas. (Reuters)

· BOJ’s Kuroda Signals Desire for Stable Yen. Bank of Japan Gov. Haruhiko Kuroda on Wednesday ruled out additional near-term stimulus and signaled his desire for stable exchange rates, suggesting officials have noted public complaints over the drawbacks of a falling yen. Since Prime Minister Shinzo Abe started his campaign to end the yen’s years of strength about two years ago, the currency has fallen roughly 50% against the dollar, cheering the country’s major exporters by inflating their overseas earnings. “I don't see any need to consider additional action for now,” Mr. Kuroda said at a news conference following a two-day policy meeting, where the central bank left policy unchanged. (The Wall Street Journal)

· South Korea Feb 1-20 Exports Flat Vs Year Ago. South Korean exports for the Feb. 1-20 period totalled $26.79b, customs data showed on Saturday, unchanged from a year earlier but a robust showing when considering holidays and weak oil prices. The three-day Lunar New Year holidays fell in February this year but in January last year, making much of South Korean economic indicators for either month vulnerable to distortions. Including January figures, South Korean exports for this year to Feb. 20 amounted to $72.02b, down 0.5% from the comparable period of 2014, the data from the Korea Customs Service showed. South Korea has said its exports are faring well, excluding the effects of the plunge in global prices of oil and related products. Refined oil and petrochemical products account for nearly 20% of South Korea's exports. (Reuters)

· Thai Junta Aims For Speedy Spending To Spur Growth. Thailand's cabinet approved a plan on Wednesday to accelerate government spending this fiscal year, especially by investment funds as the junta tries to revive the economy after months of political unrest hit growth last year. The military seized power in May to end turmoil, but has struggled to spur Southeast Asia's second-largest economy as exports are weak and domestic demand subdued, putting pressure on the government to speed up spending to boost growth. The economy grew only 0.7% in 2014, the weakest in three years. The government targets 87% of a total investment budget to be disbursed in the fiscal year ending in September after delays, Somsak Chotrattanasiri, head of the Budget Bureau, told reporters after a cabinet meeting. For the current fiscal year, which started in October, spending is projected at 2.575tr baht ($79b), of which 451b is for investment. (Reuters)

USA

· Applications For Unemployment Aid Plummet To 283,000. The number of Americans seeking unemployment benefits fell sharply last week, a sign that a recent string of strong job gains may continue. Weekly applications for unemployment aid dropped 21,000 last week to a seasonally adjusted 283,000, the Labor Department said Thursday. The four-week average of applications, a less volatile number, fell 6,500 to 289,750, its lowest level in 15 weeks. Applications are a proxy for layoffs. They have been near or below 300,000 since September, a very low reading by historical standards that points to solid hiring. The average has dropped 16% in the past year. (AP)

· Manufacturing Output Grows Modestly, Hit By Auto Decline. U.S. manufacturing output rose modestly in January and not at all in December, potentially worrisome signs for the U.S. economy given the recent strength in the dollar and weaker overseas markets. Factory output edged up 0.2% last month, the Federal Reserve said on Wednesday. The data showed flat output in December, a downward revision from a previous estimate of 0.3% growth. The output reading comes after several months in which factory manager sentiment surveys have pointed to a slowdown in growth. (Reuters)

· Cheaper Crude Oil Subdues U.S. Producer Inflation; Housing Starts Fall. U.S. producer prices recorded their biggest decline in more than five years in January on plunging energy costs, pointing to very benign inflation in the near term that could argue against raising interest rates. Other reports on Wednesday suggested the economy was growing moderately early in the first quarter. Housing starts fell last month, while manufacturing output edged higher. The Labor Department said its producer price index for final demand fell 0.8%, the biggest drop since the revamped series started in November 2009, after dipping 0.2% in December. It was the third straight month of decline in the PPI. (Reuters)

· Gauge Of US Economy Posts Slight 0.2% January Gain. An index designed to predict the future health of the U.S. economy rose in January by the smallest amount in five months, indicating the economy's momentum may have slowed a bit. The New York-based Conference Board said Thursday its index of leading indicators increased 0.2% in January, the weakest gain since a 0.1% rise in August. In addition, the December increase was revised lower to a 0.4% rise instead of the initially reported 0.5% increase. The pace of growth in the index has moderated in recent months from gains of 0.6% in both September and October to smaller increases since that time. (AP)

Europe

· Greece Bailout: Four-Month Extension in Eurozone Deal. Greece and eurozone nations have agreed a deal to extend financial aid after bailout talks in Brussels. Eurozone finance ministers reached an agreement to extend Greece's financial rescue programme by four months. Dutch finance minister Jeroen Dijsselbloem, head of the Eurogroup, said that Athens had pledged to honour all its debts. In return for the extension, Greece has agreed to present an initial list of reform measures by Monday, he added. Yanis Varoufakis, the Greek finance minister, said he would work night and day between now and Monday to devise the new list. Eurozone officials will then review the reforms and see if they go far enough to appease creditors. If finance chiefs are left unsatisfied, there is still a chance the deal will be scrapped. (BBC)

· French Consumer Prices Fall For First Time Since 2009. French consumer prices fell on an annual basis in January, their first decline in more than five years, data showed on Thursday, in another illustration of the challenge the European Central Bank faces in meeting its inflation target. French consumer prices declined 0.4% year-on-year, dragged down by a 7.1% drop in energy prices and a 1.4% drop in the cost of manufactured goods, statistics office INSEE said. Prices last fell on an annual basis in the euro zone's second-largest economy in October 2009, when the consumer price index dropped 0.2%. Month-on-month, prices fell 1.1% in January from December, with winter sales also affecting prices (Reuters)

· UK Retail Sales Fall 0.3% In January. UK retail sales fell 0.3% in January from the previous month, according to figures from the Office for National Statistics. The decline in sales follows a 0.2% rise in December 2014. The January figure was a 5.4% rise on a year earlier, the ONS said. UK High Street shops have been reducing their prices in an effort to attract customers, the figures indicate. Average store prices were 3.1% cheaper than last January. This was the largest year-onyear fall since consistent records began in 1997, the ONS added. Online sales in January were up 12% on January 2014. (BBC)

· Swiss Exports Fall in Month SNB Removes Cap on Franc. Swiss exports fell 0.8% in January in real terms from a year earlier, when adjusted to take account for one less working day than last year, with sales of chemicals and pharmaceuticals hard hit, the Federal Customs Office said on Thursday. The surge in the Swiss franc since Switzerland scrapped the currency's cap in mid-January may also have played a role in the fall in exports, but it is too early to judge its exact impact on trade figures, Matthias Pfammatter, senior economist at the Customs' Office told Reuters. The Swiss National Bank removed its 1.20 francs per euro cap on Jan. 15, a measure that had helped protect exporters from a strong franc. (Reuters)

Currencies

· Euro Rises After Greek Debt Accord. The euro closed higher against the dollar Friday, but finished lower on the week, after the Eurogroup announced it had agreed to a four-month extension of Greece’s bailout. The shared currency traded at $1.1377, down from its session high of $1.1430. It had traded at $1.1369 Thursday. Greece’s bailout agreement is set to expire on Feb 28. The shared currency recorded a 0.1% weekly loss against the U.S. dollar. The ICE U.S. Dollar Index, a measure of the dollar’s strength against a trade-weighted basket of six currencies, finished lower for the fourth week in a row. The index was down 0.05% to 94.3490. The dollar finished the session at 119 yen, unchanged from Thursday’s close, because of the market’s focus on Greece Friday, rather than the U.S. economy. Elsewhere, the British pound traded lower after data showed that U.K. retail sales declined by a larger-than-expected margin in January, giving up most of its gains from earlier in the week. The pound hit its highest level since the beginning of the year on Wednesday, after U.K. wagegrowth surprised to the upside, and the Bank of England said it believes inflation will have risen by the end of the year. The pound traded at $1.5399, compared with $1.5417 Thursday. (MarketWatch)

Commodities

· Oil Ends Mixed After Mild Rig Count Drop, Heating Oil Spikes. Crude prices ended mixed on Friday as the number of U.S. rigs drilling for oil fell far less than expected this week, while heating oil jumped 6% after severe winter cold crimped output at three refineries. WTI's March futures settled down 82 cents at $50.34 a barrel, expiring as the front-month contract. The front-month in benchmark Brent settled just a penny higher at $60.22, after falling to a week low of $57.80 on Thursday. (Reuters)

· Gold Turns Down As Greek Accord Is Drafted, 4th Weekly Drop. Gold turned lower in choppy dealings on Friday, flirting with a seven-week low after the euro zone discussed extending the Greek bailout by just four months, while prices headed for their fourth straight weekly drop. A draft text on extending Greece’s bailout from its international creditors proposes prolonging the program by four months rather than a previously suggested six, officials from Greece and other euro zone states said on Friday. Spot gold turned down 0.7% at $1,198.55 an ounce by 1949 GMT. The metal has lost 2.5% so far this week, dipping to its lowest in six weeks at $1,197.56 on Wednesday, when hopes for a successful resolution to Greece’s debt talks boosted investor appetite for risk. Silver fell 1.1% to $16.18 an ounce, while platinum dropped 0.7% to $1,157.75 an ounce, after reaching a 5-1/2 year low at $1,151.40 earlier. Palladium fell 0.6% to $779.80 an ounce. (Reuters)