Malaysia

· Government to Modify PPP Concept – Abdul Wahid. The government will modify the public-private partnerships (PPP) concept and the facilitation fund for the 11th Malaysia Plan to make them more effective, says Minister in the Prime Minister's Department, Senator Datuk Seri Abdul Wahid Omar. Abdul Wahid said PPP has been as an effective method of raising capital and delivering high-quality public service and the government wanted to review and make the facilitation fund more effective. "The facilitation fund, which was offered in the form of grants, will be converted to some form of sub-equity (concept)," Abdul Wahid said on the sidelines of the International Directors Summit 2015 here today. He said the facilitation fund was currently given for high-impact projects. "So far we already approved RM11.2 billion. Earlier, in his keynote speech, the minister said between 1983 and end-2014, a total of 698 PPP projects in various economic sectors had been signed. "The impact has been significant, with the government saving capital and operating expenditures amounting to RM204.9 billion.”Privatisation of government assets has also yielded RM6.5 billion," he said. (Bernama)

Asia

· India Overhauls Monetary Policy Using Inflation Targets. India's government and central bank have agreed to commit to inflation targeting, in the biggest change to monetary policy since India's economy was opened up more than two decades ago, putting priority on subduing almost chronically volatile prices. In a document dated Feb 20 but published on the ministry website on Monday, the two sides set a consumer inflation target of 4%, with a band of plus or minus 2 percentage points, for the financial year ending in March 2017. Reserve Bank of India Governor Raghuram Rajan has championed the move to inflation targeting, increasingly popular among large emerging markets, and the document shows he has won a commitment from Prime Minister Narendra Modi's 10-month-old government. (Reuters)

· South Korea’s Inflation Eases to Slowest Pace Since 1999. Inflation in South Korea slowed to the weakest pace in more than 15 years amid declining energy-import costs and softness in domestic demand. Consumer prices rose 0.5% in February from a year earlier, Statistics Korea said in a statement on Tuesday. That’s lower than the median estimate of 0.7% in a survey of 17 economists. Prices were unchanged from the previous month, versus projections for a 0.2% gain. That’s likely to increase pressure on the Bank of Korea to consider cutting its benchmark interest rate after recent data showed industrial output unexpectedly falling and exports dropping the most in two years. Governor Lee Ju Yeol has said that if the economic situation deteriorates, the BOK will probably have reduce rates further. The BOK’s monetary policy board will consider rates on March 12. (Reuters) · China February HSBC PMI at Seven-Month High. Activity in China's factory sector edged up to a seven-month high in February but export orders shrank and deflationary pressures persisted, a private business survey showed, adding to the view that yet more interest rate cuts will be needed. On Monday, a survey showed the HSBC/Markit Purchasing Managers' Index (PMI) climbed to 50.7 in February - the strongest level since July - from 49.7 in January, as overall new orders picked up. The number was stronger than a preliminary reading of 50.1, which was just above the 50-point level that separates growth in activity from a contraction on a monthly basis. But even as factory activity picked up slightly, the survey showed manufacturers struggled to cope with erratic export demand and deflationary pressures. The new export orders sub-index dipped to 48.5 in February, the sharpest contraction in a year, while both input and output prices fell for a seventh month. Manufacturing employment shrank for a 16th month, although the pace of job shedding moderated. (Reuters)

· Indonesia Inflation Slows More Than Expected in February. Indonesia's annual inflation rate declined more than expected in February as oil prices fell, reinforcing views that the central bank will cut interest rates further to prop up growth. Cheaper oil has curbed inflation, but the drop in oil and commodities prices in general have also weighed on the economy. Annual inflation in February slipped more than expected, to 6.29% from 6.96% in January. A Reuters poll had expected inflation to slow to 6.70%. On a monthly basis, prices fell for a second month at a rate of 0.36%. Core inflation, which excludes administered prices and volatile food prices, slowed to 4.96% in February from 4.99% the month before. (Reuters)

USA

· Manufacturing in U.S. Expands at Slowest Pace in a Year. Manufacturing expanded in February at the weakest pace in a year, limited by weaker growth abroad and a work slowdown at West Coast ports. The Institute for Supply Management’s index dropped to 52.9, the lowest since January 2014, from 53.5 a month earlier, the Tempe, Arizona-based group’s report showed Monday. Readings above 50 indicate growth and the median forecast in a survey of economists was 53. Cutbacks in demand from overseas customers and domestic energy producers led to the weakest growth in new orders since May 2013, prompting U.S. factories to slow the rate of hiring. At the same time, manufacturing is being underpinned by sustained spending from American consumers who are enjoying low prices at the gas pump. “Manufacturing growth has slowed, but it’s still expansionary,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. (Bloomberg)

· Weak U.S. Consumer Spending Points to Slower First-Quarter Growth. Consumer spending fell for a second straight month in January as households continued to cut back on purchases, opting to save much of the massive windfall from cheaper gasoline. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, slipped 0.2% after falling 0.3% in December. The January dip reflected lower gasoline prices, which weighed on sales receipts at service stations, as well as drop in purchases of big-ticket items. With lower gasoline prices dampening inflation pressures, the socalled real consumer spending increased 0.3% after slipping 0.1% in December. But economists said the rise in the measure, which goes into the calculation of gross domestic product, was disappointing. That and another report from the Commerce Department showing a 1.1% drop in construction spending in January prompted some economists to cut their first-quarter growth estimates. (Reuters)

Europe

· Eurozone February Prices Fall Less Than Expected, Unemployment Down. Eurozone consumer prices fell by less than expected in February while unemployment eased in January for the third month in a row, offering signs that the risks of economic stagnation and deflation in the bloc are falling. The European Union's statistics office Eurostat estimated on Monday that consumer prices in the 19 countries sharing the euro fell 0.3% year-on-year in February after a 0.6% annual drop in the previous month. Economists had expected a 0.4% price decline. Eurostat said that much cheaper energy, prices for which were 7.9% lower in February than a year earlier, and a 0.2% decline in prices of non-energy industrial goods were the main factors pulling down the overall inflation index. Unemployment, usually the last indicator to react to better economic conditions, fell for the third month in a row to 11.2% in January from 11.3% in December. (Reuters)

· Central European Manufacturing Gains, Looks to Stronger Eurozone. Central Europe's manufacturing expanded in February, a series of reports showed, and an expected economic recovery in the euro zone, the region's largest export market, should help it continue to grow. The Purchasing Managers' Index for manufacturing in Poland, the region's biggest economy, eased slightly to 55.1 last month, according to data compiled by Markit and HSBC. The employment component of the index posted the second-fastest growth in the survey's 18-year history. Economists had expected the index to fall further, to 54.7. Anything over 50 indicates expansion; anything below that, a contraction. Hungary's PMI, compiled using different methodology, rose to 54.9 in February from 54.3 in January. (Reuters)

· Ireland's Manufacturing Sector Buoys Eurozone Output. Manufacturing output in Ireland has risen to its highest level in more than 15 years, according to the Markit Purchasing Managers' Index. Accelerated growth in both new orders and production pushed Ireland's PMI to 57.5 in February. A figure above 50 suggests expansion. Overall eurozone manufacturing PMI held steady in February at 51.0. France's manufacturing sector contracted to 47.6, the lowest score in the eurozone. Manufacturing in the eurozone matched January's figure, even though new orders rose to a seven monthhigh. Meanwhile, lower oil prices have reduced manufacturing input costs, said Markit. Job creation in Ireland's manufacturing sector reached its highest since May 1998. (BBC)

Currencies

· U.S. Dollar Shows Some Mettle, Aussie Wary of Rate Cut. The U.S. dollar hovered just below a fresh 11-year peak against a basket of major currencies early on Tuesday, as rising Treasury yields helped it prevail against the euro in a choppy session. The dollar index climbed as far as 95.514, surpassing the previous peak of 95.481 set on Jan. 23. It reached a high not seen since September 2003. The index rose as the euro slid back below $1.1200 and as the greenback hit a near three-week high of 120.19 yen. The euro zone common currency last stood at $1.1186. Dollar bulls largely shrugged off a batch of soft U.S. data including another fall in U.S. consumer spending and slower factory activity. In contrast, the market appears to be betting the Reserve Bank of Australia will likely deliver a back-to-back interest rate cut later on Tuesday. As a result, the Aussie dollar has fallen back to $0.7767 from a recent high of $0.7914. Traders said an 'on hold' decision by the RBA should spark a short-covering rally in the Aussie. Conversely, a cut accompanied by a dovish statement could see it fall towards a six-year trough of $0.7627 set a month ago. (Reuters)

Commodities

· Oil Tumbles On Iran, Libya; Worry About High Supply Returns. Brent futures fell 5%, its most in a month, on Monday as speculation of a nuclear deal that could lift Iran's sanctions and boost its oil exports brought worries about high supplies back to the market. Brent's front-month fell below the psychological $60-a-barrel support, closing down $3.04 at $59.54, after talk of a sooner-than-expected nuclear deal for Tehran. Brent rose 4% last week to finish February up 18%. In U.S. crude, the front-month settled down 17 cents at $49.59 a barrel after Genscape reported a 1.4-million-barrel build last week at the Cushing delivery point for oil, versus trade expectations of 2 million barrels or more. (Reuters)

· Gold Turns Down From 2-Week High; Traders Eye U.S. Policy. Gold turned lower on Monday as the U.S. dollar rose and investors cashed in gains after upbeat Asian demand lifted the metal to two-week highs, with expectations for a rise in U.S. interest rates later this year keeping a lid on prices. Spot gold was down 0.3% at $1,208.90 an ounce by 2:11 p.m. EST (1911 GMT). U.S. gold futures for April delivery settled down $4.90 an ounce at $1,208.20. Earlier, spot prices rose to $1,223.20 an ounce, their highest since Feb. 17, after an interest rate cut in Beijing lifted demand in China, the world's second-largest gold market. Spot silver was down 0.9% at $16.45 an ounce. Platinum was up 0.4% at $1,188.24 an ounce, while palladium was up 1.6% at $828 an ounce. Autocatalyst metal palladium hit its highest since mid-September at $832.15 after buy stops were triggered near $821 an ounce, its December high, traders said. (Reuters)