Malaysia

· Industrial Production Grew at 7.0% YoY in January, matching market expectations and only slightly lower than the oneand- a-half year high of 7.4% achieved in December. Manufacturing output did not lose momentum going into 2015 and was up 6.5% YoY (Dec: 7.9%, 2014: 6.1%). Mining output defied low commodity prices to record a sixth consecutive month of positive YoY growth with help from crude oil production from new offshore fields. Malaysia’s main export, electrical and electronic products, posted growth of 10.3% YoY. Export-oriented industries are growing quicker than domestic-oriented ones as the depreciating ringgit favors exporters over importers. Backed by domestic demand and a sustained export growth the economy is on track to record GDP growth of 5.0% in 1Q15. (Please refer to Economic Viewpoint for further comments)

Asia

· South Korea Hops on Rate-Cut Bandwagon with Quarter-Point Move. South Korea’s central bank unexpectedly lowered its key interest rate to an all-time low to prevent the nation from falling into deflation and support economic growth. The Bank of Korea lowered the seven-day repurchase rate to 1.75%, as forecast by just two of 17 economists surveyed by Bloomberg. With South Korea’s inflation at slowest pace since 1999 and exports falling, the BOK joins more than 20 other central banks in loosening policy this year, including its Thai counterpart, which unexpectedly cut rates Wednesday. Governor Lee Ju Yeol told parliament on Feb. 23 that the central bank would probably have to respond through interest rates if the economic situation deteriorated. (Reuters)

· China February New Yuan Loans, Money Growth Beat Forecasts. Chinese banks extended 1.02 trillion yuan ($162.9 billion) of new loans in February, well above market expectations, while growth in broad money supply quickened, taking some heat off the central bank as it seeks to boost flagging economic growth. Economists had expected new local-currency loans to fall to 750 billion yuan in February from 1.47 trillion yuan in January, which marked a lending surge not seen since mid-2009. Chinese banks, which face limits on how much they can lend annually, tend to front-load their lending in the beginning of each year in a bid to protect their market share. Total social financing, a broader measure of overall liquidity in the economy, fell to 1.35 trillion yuan in February, versus 2.05 trillion yuan in January. Broad M2 money supply (M2) in February rose 12.5% from a year ago, the central bank said on Thursday, beating expectations of 11% and quickening from January's 10.8%, which was the weakest since records started in 1998. (Reuters)

· Japanese Firms' Mood Worsens as Yen Slump Rattles, Dims Outlook. Confidence at big Japanese manufacturers worsened in January-March and is seen turning negative in the second quarter as a slumping yen ramped up the costs of raw material imports, a survey showed, complicating Tokyo's stimulus-driven campaign to revive the economy. The quarterly poll by the Ministry of Finance and the Cabinet Office released on Thursday suggests the drawbacks of a weak yen may be outweighing its benefits, which have not spread to broader sectors of the economy. The business survey index (BSI) of sentiment at large manufacturers stood at plus 2.4 in January-March, compared with plus 8.1 in the prior three months. (Reuters)

USA

· Cold Weather Chills U.S. Retail Sales. U.S. retail sales unexpectedly fell in February as harsh weather kept consumers from auto showrooms and shopping malls, tempering the outlook for first-quarter growth and a June interest rate increase by the Federal Reserve. Even accounting for the snowy and cold weather, which blanketed much of the country in late February, there is little doubt that consumer spending has slowed significantly after robust growth in the fourth quarter. Consumer spending accounts for more than two-thirds of U.S. economic activity. The Commerce Department said on Thursday retail sales dropped 0.6% as receipts fell in almost all categories, marking the third straight month of declines. Sales fell 0.8% in January. February was the first time since 2012 that retail sales had dropped for three consecutive months. Economists had forecast retail sales increasing 0.3% last month. (Reuters)

· U.S. Budget Deficit Dipped to $192 Billion in February. The U.S. budget deficit was $192 billion in February, down 1% from the same period last year, according to data released by the Treasury Department on Thursday. Analysts had expected a $187 billion deficit for last month. The deficit was $194 billion in February of 2014, according to Treasury's monthly budget statement. The current fiscal year-to-date deficit stood at $387 billion at the end of last month. February's budget results were affected by differences in the calendar. If adjusted for timing-related transactions, the budget deficit would have been $194 billion. Receipts last month totalled $139 billion, down 3% from the year-ago period, while outlays were $332 billion, down 2% from the year-ago period, Treasury said. (Reuters)

· U.S. Import Prices Rise, but Inflation Pressures Still Muted. U.S. import prices rose in February after seven months of declines as the cost of petroleum increased, but there was still little sign of imported inflation pressures. The Labor Department said on Thursday import prices gained 0.4% after a revised 3.1% plunge in January. Economists polled by Reuters had forecast import prices rising 0.2% after a previously reported 2.8% decline in January. In the 12 months through February prices fell 9.4%. The Labor Department report also showed export prices dipped 0.1% in February after falling 1.9% in January. Export prices dropped 5.9% in the 12 months through February. (Reuters)

Europe

· Eurozone Factory Output Shows Turn in Sentiment in 2015. Output at eurozone factories fell slightly in January, but Thursday's data also showed evidence to support hopes that the bloc's fragile economy may be recovering. Industrial production in the 19 countries sharing the euro fell 0.1% from December, the EU's statistics office Eurostat said, compared to the 0.2% rise forecast by economists polled by Reuters. Still, on an annual basis, industrial production posted its best reading since July 2014, increasing 1.2% and outstripping economists' expectations of a 0.1% rise. That strong performance was helped by increases in France, Germany, Spain and Ireland as production of goods including televisions and computers rose 2.5%. Italy, which along with France and Germany makes up two-thirds of industrial output, fell 2.2% however. (Reuters)

· Irish Economy Hits Post-Crisis High with 4.8% Annual Growth. Ireland's economic growth rate surged to a post-crisis high of 4.8% last year, the fastest rate in the European Union, as data confirmed a stunning recovery from a devastating 2008 property crash. After two years of near stagnation, higher exports and consumer spending lifted 2014 gross domestic product growth to almost four times the average 1.3% rate posted across the European Union after most countries had published data. It is Ireland's highest growth rate since 2007, the final year of the Celtic Tiger boom, when the economy grew by 4.9%.

· French Consumer Prices Fall Year-On-Year in February. French consumer prices fell again year-on-year in February after registering their first decline in over five years in January, data showed on Thursday, underlining the challenge the European Central Bank faces in meeting its inflation target. The annual fall of 0.3% came despite a 0.7% month-on-month rise which the INSEE statistics office said was largely due to seasonal increases in prices after the end of the winter sales. The data were largely in line with expectations. Economists had forecast an increase of 0.6% month-on-month and a negative rate of 0.4% year-on-year. In January, prices fell 0.4% on an annual basis. (Reuters)

 Currencies

· Dollar Hits Speed Bumps, Euro Gains Slight Reprieve. The U.S. dollar nursed modest losses early on Friday after nervous investors booked profits in an extended rally that has driven the greenback to successive multiyear peaks this week. An unexpected fall in U.S. retail sales gave the market an excuse to sell the dollar, which promptly retreated from a 12-year high against a basket of major currencies. The dollar index last stood at 99.272, having slid 0.4% on Thursday - its biggest one-day fall in a month. The index earlier rose as far as 100.060, a high not seen since mid-April 2003. Against the yen, the dollar slipped to 121.34 yen, pulling away from a near eight-year high of 122.04. It also lost ground against the euro, which popped up to $1.0621, from a 12-year trough of $1.0494. The greenback also eased against commodity currencies such as the Australian dollar, which climbed back above 77 U.S. cents from a six-year low of $0.7561 set on Wednesday. Sterling, however, made no headway against the broadly softer dollar after Bank of England Governor Mark Carney signaled he was in no rush to raise interest rates, dashing some expectations of a hike in early 2016. The pound plumbed a 20-month low of $1.4850 and was last trading at $1.4883. (Reuters)

Commodities

· Oil Down as Supply Offsets Dollar, Brent - U.S. Spread Near Week High. Global oil prices fell on Thursday on estimates showing another big supply build at the delivery point for the U.S. crude contract, with trade volatile ahead of the expiry of the front-month in benchmark Brent oil. The reopening of the Houston Shipping Channel for oil imports and the possibility of higher total U.S. oil inventories stemming from a tentative deal to end a U.S. refinery strike added to the bearishness across the oil futures complex. U.S. crude CLc1 settled down $1.12, or 2.3%, at $47.05 a barrel. Brent LCOc1 closed down 46 cents, or nearly 1%, at $57.08. Brent's premium to U.S. crude, a favorite play in oil, widened by more than $1 to above $10 a barrel on Thursday, hitting a near one-week high. (Reuters)

· Gold Steadies After 8-day Losing Streak as Dollar Retreats. Gold steadied on Thursday as a retreat in the dollar from 12-year highs arrested its eight-session slide, though speculation that U.S. interest rates could rise sooner rather than later kept prices under pressure. Spot gold was up 0.05% at $1,154.65 an ounce at 1823 GMT, while U.S. gold futures for April delivery settled up $1.30 an ounce at $1,151.90. Earlier spot prices reached a high of $1,166.30 an ounce, but retreated as U.S. stocks climbed at the open. Spot platinum hit its lowest in 5-1/2 years at $1,108.50 an ounce. Silver was up 0.5% at $15.54 an ounce and spot palladium was up 0.1% at $787.70 an ounce. (Reuters)