Global

· Global Economic Growth Inched Up in 2014, OECD Says. The global economy grew at a slightly faster pace in 2014, as a modest revival in the eurozone and a pickup in India helped offset slowdowns in China and Japan. The Organization for Economic Cooperation and Development Wednesday said the combined gross domestic output of the Group of 20 largest economies expanded 3.4% last year, up slightly from 3.2% in 2013. The G-20 accounts for about 90% of global economic output. That pickup was aided by a return to growth in the eurozone, where economic output rose 0.9%, having contracted by 0.5% in 2013. Economic growth in the U.S. was little changed, while China’s rate of expansion slowed to 7.4% from 7.7%. India and the U.K. recorded significant pickups in economic growth, while Japan slowed sharply. (The Wall Street Journal)

 · IMF's Lagarde Sees Monetary Policy Risks. The head of the International Monetary Fund (IMF) said during a visit to Berlin on Wednesday that diverging monetary policies posed a risk to the global economy. "We also have risks stemming from the monetary policies that we're seeing at work, where we will probably expect a return to more traditional monetary policy by the Fed, while at the same time we have continued or renewed accommodative policies by Japan and the European Central Bank," Christine Lagarde said. "So this will clearly involve more volatility and it will also have currency impact in that those countries or corporates that have borrowed extensively in dollar-denominated loans are going to suffer," she added. (Reuters)

Malaysia

· Bank Negara Malaysia 2014 Annual Report. The key message in Bank Negara Malaysia’s outlook for the current year is that the economy is resilient enough to withstand external shocks, citing the highly diversified structure of the Malaysian economy as buffer against the consequences of the fallout in commodity prices and financial market volatility. BNM projections released along with the central bank’s 2014 annual report show GDP growth expected at between 4.5% and 5.5%, well below the 6.0% achieved in 2014, to reflect the impact of sharply lower exports and the implementation of GST. This and the high likelihood of volatility in capital flows will see the current account balance narrow to between 2.0% and 3.0% of GNI from 4.8% in 2014. Meanwhile, average inflation over the course of 2015 is projected to be lower than last year’s 3.2%, mainly to reflect the impact of lower crude oil prices which is expected to partially offset the cost-push impact of GST. While BNM’s policy stance will remain bias in ensuring the economy remains on a steady growth path, it will also consider the impact of large shifts in global capital flows on domestic financial market. (Please refer to Economic Viewpoint for further comments)

Asia

· Thailand Surprises with Rate Cut to Lift Weak Confidence. Thailand unexpectedly cut its benchmark interest rate on Wednesday, in a bid to give the ailing economy a spark that the military government has been unable to provide so far. The first cut in a year in the one-day repurchase rate took it to 1.75%, its lowest since mid-2010. Wednesday's move came with the Bank of Thailand's warning that this year's economic growth will be below its 4% forecast. It said consumer and government spending were less than expected. The monetary policy committee - made up of three BOT officials and four outsiders - had been widely expected to keep rates unchanged. Only five of 21 analysts polled predicted a cut. (Reuters)

· Chinese Factory Data Shows Weakest Start in Six Years. China’s economy is already behind target as monetary easing shows few signs of traction. Industrial output, investment and retail sales growth missed analysts’ estimates in January and February, suggesting more stimulus is needed to boost the world’s second-largest economy. Factory production rose 6.8% in the two-month period from a year earlier, the National Bureau of Statistics said in Beijing Wednesday, compared with the median projection for 7.7% in a survey. Retail sales advanced 10.7%, while fixed-asset investment increased 13.9%. China combines data for industrial output, retail sales and fixed-asset investment for January and February due to distortions from the week-long Lunar New Year holiday, which has different timings. The two-month industrial output reading shows the slowest start to a year since 2009. Reflecting a housing slump that’s weighing on investment and retail spending, the value of property sales fell 15.8% in the two months from the same period a year earlier. (Bloomberg)

· Japan Machinery Orders Fall, Shows Firms Still Slow to Invest. Japan's core machinery orders fell 1.7% in January from the previous month, underscoring the challenges facing the government as it attempts to nudge firms into boosting spending on wages and equipment with its aggressive stimulus policies. Nonetheless, emerging signs of a steady pick up in exports have some analysts taking a more sanguine view of the outlook for capital spending. Indeed, the decrease in machinery orders was smaller than a median market forecast for a 4.1% drop, and the government said the decline was largely payback for the 8.3% rise in December - the fastest pace in six months. (Reuters)

· Indonesia Central Bank Says to Keep Tight Stance, Focus on Current Account Balance. Indonesia's central bank will focus its efforts on improving the current account deficit and maintaining a tight monetary stance, the governor said on Wednesday, as Southeast Asia's biggest economy looked to ease jitters over its weak currency. President Joko Widodo held high-level talks with senior central bank and economic ministers late on Wednesday, as the rupiah hit its lowest level since August 1998. "The current tight condition will not be loosened if inflation and the current account deficit are not going in a good direction," Bank Indonesia Governor Agus Martowardojo said after the Jakarta meeting. (Reuters)

· India's Economy Recovering, Reforms Vital: IMF. India's economy is recovering and its ability to withstand external shocks has improved, but growth is likely to fall short of government targets, the International Monetary Fund said on Wednesday. In an annual report, the IMF forecast that Asia's third-largest economy would grow by 7.5% in the 2015/16 fiscal year that starts on April 1, up from 7.2% in the year now ending. That is less optimistic than the forecasts in Prime Minister Narendra Modi's annual budget, which foresees growth of up to 8.5% in 2015/16 - making India the world's fastestgrowing large economy ahead of China. (Reuters)

Europe

· EU Backs Investment Plan With Pushback On Help For Hardest Hit. European Union finance ministers agreed to press ahead with a proposed 315 billion-euro ($338 billion) investment plan, while reminding crisis-hit nations that it won’t offer them special assistance. The investment fund, EU Commission President Jean-Claude Juncker’s flagship effort to jumpstart growth, won a green light from ministers at Tuesday’s meeting in Brussels. This paves the way for discussions with the European Parliament, as policy makers target a final deal by June. (Bloomberg)

· UK Industrial Output Unexpectedly Falls in January, Hit by Tumble in IT Work. British industrial output expectedly fell in January hit by a reduction in work in the information technology and machinery sectors after a strong December, official figures showed. Industrial output fell by a monthly 0.1%, compared with a forecast for a 0.2% increase from economists taking part in a poll. The Office for National Statistics said manufacturing output slid 0.5% in January from December. The biggest drag came from the computer, electronic and optical sector in which output plunged by 9.5%, its biggest monthly fall since early 2002, the ONS said. Output in the sector had been boosted in December by a big public sector defense contract, an ONS official said. There was also a big monthly fall in output of equipment used for power generation, he said. Over the three months to January, a less volatile measure of output, manufacturing was up 0.4% compared with the previous three months, picking up a bit of speed from December. (Reuters)

Currencies

· Euro Slides Further on Record Negative Bond Yields. The euro extended its unrelenting fall on Wednesday, dropping 1% to below $1.06 for the first time in 12 years as the European Central Bank's 1.1 trillion bond-buying program hammered the region's bond yields to record negative levels. The single currency has declined 12% since January and is about 5.6% away from reaching parity against the greenback. The euro was broadly lower against other major currencies. It struck a seven-year low against sterling at 70.145 pence and an 18-month low of 128.29 yen. The dollar climbed 0.9% to a 12- year high of 99.507 against a basket of major currencies. It was last up 0.7 in early U.S. trading. (Reuters)

Commodities

· Brent Oil Halts Five-Day Slide in London; WTI Pares Decline. Brent oil futures halted a five-day slide in London, while West Texas Intermediate pared losses after falling to the lowest in more than a month. Brent for April settlement gained $1.17, or 2.1%, to $57.56 on the ICE Futures Europe exchange at 2:15 pm New York time. Brent’s premium over WTI widened to $9.46 on the ICE from $8.10 yesterday. WTI for April delivery fell 12 cents, or 0.3%, to $48.17 a barrel on the New York Mercantile Exchange. Futures earlier fell as far as $47.33, the lowest level since Feb 2. (Bloomberg)

· Gold Hits Three-Month Lows on Dollar, Equities Strength. Gold fell more than 1% on Wednesday, touching its lowest in more than three months in what looked to be an eighth straight losing session as a robust dollar and expectations of higher U.S. interest rates curbed appetite for the metal. Spot gold earlier fell 1.1% to $1,147.10 an ounce, its lowest since Dec 1, and was down 0.7% at $1,153.10 an ounce by 1835 GMT. Weakness in gold spread to other precious metals, with platinum taking the biggest hit as prices slumped to $1,109.50 an ounce, their lowest since July 2009. Silver shed 2.2% to a threemonth low of $15.26 an ounce and palladium was down 1.4% at $789.47 an ounce. (Reuters)