Malaysia

· Malaysia Boosts Incentives to Attract MNCs. New incentives for the establishment of principal hub will attract multinational corporations (MNCs) with high value activities to Malaysia's capital and support further high-skilled regional job growth, said investment promotion agency Invest KL. On Monday, MITI Minister Datuk Seri Mustapa Mohamed announced details of principal hub incentives under the Malaysian 2015 Budget. The new incentives, which will be implemented on May 1, 2015, were based on a three-tiered corporate taxation rate, specifically zero per cent, five per cent, and 10 per cent, depending on the level of value created. (Bernama)

Asia-Pacific

· Taiwan March Exports Fall at Fastest Pace in 2 Years as Tech Demand Flags. Taiwan's exports posted their biggest drop in two years in March as shipments to major markets flagged, a sign that demand for gadgets like smartphones from Apple Inc may be cooling. Electronics exports, which had held up well in recent months as the island's technology manufacturers make many of the components packed into the hot-selling iPhone 6, lost ground in March, slipping 0.2% last month from a year earlier. Taiwan's export trend is a key gauge of global demand for technology gadgets worldwide. Annual exports in March fell 8.9%, widening from February's 6.7% fall. (Reuters)

· BOJ Sticks to its Guns Two Years into Stimulus, Lone Dissenter Proposes Tapering. The Bank of Japan maintained its massive stimulus programme on Wednesday and brushed aside speculation of near-term policy easing, even as inflation ground to a halt and growth stalled two years into its radical experiment to revive the economy. Concern over diminishing returns from aggressive money printing led one board member to propose reducing its asset purchases, which was voted down 8-1 but underscored the waning conviction that the BOJ will be able to meet its ambitious inflation target. (Reuters)

· Japan Service Sector Sentiment Improves to Highest in a Year. Japan's service sector sentiment index rose to its highest level in a year, a Cabinet Office survey showed. The survey of service workers such as taxi drivers, hotel and restaurant staff—called "economy watchers" for their proximity to consumer and retail trends—showed the index measuring their confidence in current economic conditions rising to 52.2 in March from 50.1 in February. It was the fourth straight month of improvement and the highest level seen since March 2014, a month before Japan's sales tax hike. The Cabinet Office said the economy was in a moderate recovery trend and raised its assessment slightly from the previous month. But officials also acknowledged that there were lingering concerns about the rising cost of consumer goods and the fact that wages were not keeping pace with prices. (Reuters)

· China to Loosen Capital Controls for Foreign Firms. China will loosen capital controls for foreign-funded firms, allowing them to convert all foreign-currency capital into yuan to help them hedge currency risks and cut costs, the foreign exchange regulator said on Wednesday. Foreign firms in China will be allowed to convert up to 100% of their registered foreigncurrency capital into yuan based on their business needs, according to new regulations issued by the State Administration of Foreign Exchange (SAFE). The regulator will adjust the capital conversion ratio based on the country's balance of payments situation, it said without elaborating. The change is effective from June 1. (Reuters)

USA

· FOMC Minutes: Fed Officials Divided Over June Liftoff. Federal Reserve policy makers last month were split over whether they would raise interest rates in June, a debate that occurred before recent disappointing payroll figures, minutes of their most recent policy meeting showed. “Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting,” according to minutes of the March 17-18 Federal Open Market Committee session released Wednesday in Washington. Others said energy-price declines and a stronger dollar would continue to curb inflation, arguing for a rate increase later in the year. A couple said the economy probably wouldn’t be ready for tighter policy until 2016. (Bloomberg)

· Fed Studies Show Damage to Labor Market Is Reversible. Most of the damage inflicted on the U.S. labor market by the recession is reversible, according to Federal Reserve research, leaving open the possibility that additional stimulus will be effective in reducing joblessness. About one-third, or 1.5 percentage points, of the jump in unemployment from 5% as the economic slump began to its 10% peak in October 2009 can be traced to a mismatch between the supply of labor and job openings, according to a study released this month by the Federal Reserve Bank of New York. That leaves the remainder due mainly to a lack of demand. The Fed research suggests the so-called natural rate of unemployment may be as low as 6%. (Bloomberg)

Europe

· Eurozone Retail Sales Fall After Four Straight Monthly Rises. Retail sales in the eurozone fell in February after four successive monthly increases. The European Union’s statistics agency Wednesday said retail sales fell 0.2% from January, but were nevertheless 3.0% higher than in the same month of 2014 after strong rises since September. The sharp decline in energy prices in the final months of last year left households with more money to spend on other goods and services, boosting consumer confidence and spending. But as oil prices have steadied in recent months, that boost has attenuated. (The Wall Street Journal)

· German Industrial Orders Slip for Second Month. German factories secured fewer orders for the second month in a row in February as overseas demand for industrial goods from the country declined. Preliminary data released by the German Economy Ministry on Wednesday showed a 0.9% decline in February factory orders over January. The drop followed a sharp 2.6% decrease in January, according to revised figures for that month. However, for the three-month period covering December to February, factory orders rose 0.5% compared to the previous three months. Nevertheless, the ministry said in a statement that momentum had "slowed" at the beginning of 2015, in particular in terms of orders from abroad. Bulk orders had also declined, it said, while domestic orders from Germany were providing "the positive effect" for the three-month period. (Deutsche Welle)

· France Announces Plan to Boost Business Investment. Firms are to be given bigger tax rebates on investments as part of reforms announced on Wednesday to boost business activity and help the slow revival of France's economy. Flat business investment remains a drag on the improving outlook for the euro zone's second-largest economy at a time when consumer spending and exports are picking up. The government will allocate 2.5 billion euros ($2.72 billion) over five years for tax rebates to boost investment, Prime Minister Manuel Valls said. A key measure will be allowing firms to write down 140% of the value of industrial investments they make between now and April 2016. Local authorities will be reimbursed more quickly on sales tax paid on their public works investments and some tax rebates on housing works will be extended. (Reuters)

Currencies

· Dollar Rises for Third Day, Boosted by Fed Policy Minutes. The dollar rose on Wednesday, gaining against other leading currencies for a third day, as Federal Reserve minutes showed that U.S. policymakers were readying for a possible interest rate hike during 2015. The dollar index, which measures the greenback against the yen and five other major currencies, was down for most of the session, then pivoted to gains after release of minutes from a March 17-18 policymakers' meeting. The index was up 0.21% in late trading. The euro sank below $1.08 and was last off 0.25% at $1.0787, while the dollar was last at 120.10 yen, off 0.14% for the day but above the day's low below 120 yen. (Reuters)

Commodities

· Oil Dives 6% from 2015 High as Stocks Swell, Saudis Pump. Oil prices dived 6% on Wednesday after closing at their highest this year, as a mammoth rise in U.S. crude stockpiles and news of record Saudi oil production scuttled talk of a sustained recovery. U.S. crude oil inventories surged 10.95 million barrels - three times more than expected - to a modernday record 482.39 million last week, U.S. government data showed. The data added to earlier losses triggered by comments that Saudi oil production rose to 10.3 million barrels per day (bpd) in March, the highest monthly total on record. Brent May crude fell $3.55, or 6%, to settle at $55.55 a barrel. U.S. May crude fell $3.56, or 6.6%, to settle at $50.42 after closing at nearly $54 a barrel on Tuesday, the highest close since Dec. 30. (Reuters)

· Gold Falls below $1,200/oz after Fed Minutes Hint of June Rate Hike. Gold extended losses on Wednesday, falling below $1,200 an ounce after U.S. Federal Reserve minutes revealed an interest rate hike could take place as early as June, causing the dollar to turn higher. Spot gold was down 0.8% at $1,199.30 an ounce at 2:34 p.m. EDT (1834 GMT). Spot silver was down 2.3% at $16.42 an ounce, while platinum slipped 1% to $1,159.50 an ounce and palladium lost 1.8% at $753 an ounce. (Reuters)