Global

Surging Dollar Boosts Europe, Japan as U.S. Slows, IMF Says. The strengthening dollar is boosting growth in the euro area and Japan while taking some steam out of the U.S. recovery, the IMF said in its latest forecast. The IMF left its projection for global growth in 2015 unchanged from three months ago at 3.5%, according to its World Economic Outlook released Tuesday. Underneath the stable forecast, however, the IMF depicts a global economy being reshaped by swings in currency markets and the drop in oil prices. The Washington-based crisis lender cut its U.S. expansion forecast by 0.5 percentage point to 3.1%, still the fastest among major developed economies. The Japan growth outlook increased to 1% from 0.6% and the euro area is projected to expand 1.5% as weakening currencies provide a “welcome boost,” the IMF said. Emerging markets are showing their own mixed forecasts, with growth projected to slow to 4.3% from 4.6% in 2014, the fifth straight annual decline and the same forecast as in January. The figures show India will grow more quickly this year than China for the first time since 1999, according to data on the fund’s website. The IMF predicts India will expand at a 7.5% rate, up 1.2 percentage points from the January forecast. Meanwhile, China is expected to grow 6.8% this year, unchanged from January’s forecast. The world’s second-biggest economy is slowing as “previous excesses in real estate, credit and investment continue to unwind,” the IMF said. (Bloomberg)

WTO Cuts World Trade Growth Forecasts for 2015 and 2016. Global goods trade will grow by 3.3% this year and by 4.0% in 2016, less than previously forecast, mainly due to sluggish economic growth, the World Trade Organization said on Tuesday. "We expect trade to continue its slow recovery but with economic growth still fragile and continued geopolitical tensions, this trend could easily be undermined," WTO Director-General Roberto Azevedo said. The WTO figures are based on economic growth estimates provided by other organizations. Although the forecasts do suggest some modest growth in world goods trade, they follow repeated downward revisions of trade forecasts as the economic outlook worsened. Trade grew by 2.8% in 2014, far less than an original forecast of 4.7% and also below the revised forecast of 3.1% predicted last September. The new expectation of 3.3% growth this yearalready revised down twice, from 5.3% and then 4.0%, is a small acceleration but far below the long term trend. (Reuters)

Malaysia

Government May Introduce Two Power Tariff Rates in End-2015. The government is looking to introduce the enhanced time of use (eTOU) mechanism by end of 2015 or early 2016 for electricity usage in Peninsular Malaysia and Sabah, said Energy, Green Technology and Water Ministry deputy secretary general Datuk Dr Nadzri Yahaya. "We haven't made a final decision yet. The concept will enable consumers to know at any time, day or night, when the tariff is higher or lower and can capitalise on the differences to carry out their household activities or industries. There will be two tariff rates," he told reporters at a launch yesterday. He said the concept is similar to the mechanism adopted in Japan, which has two tariff rates. The concept in Japan has seen some industries changing work processes to utilise lower tariff rates at night. Nadzri said tentatively, the ministry is looking at maintaining day time rates and lower night time rates but the exact rates have not been determined yet. (The Sun Daily)

Property Market Rebounds from 2-Year Decline. The Malaysian property market recovered slightly from a transaction slump in 2013 with a marginal increase in 2014, the first uptick since 2011. According to the Property Market Report 2014 by the National Property Information Centre (Napic), Finance Ministry, 2014 saw a 0.8% increase in total transactions to 384,060 as total value transacted rose 7% year-on-year to RM162.97 billion. In contrast, total transactions in 2013 saw a 10.9% contraction year-on-year. “The cooling measures which resulted in the moderation of market activity in the last two years have seen market corrections, which ensured the slight pick-up in activity in 2014,” said the report. The residential property segment remained the mainstay of the market, comprising 64% of total transactions at 247,251 last year worth RM82.06 billion. (KiniBiz)

Asia

Singapore Surprises by Standing Pat on Policy. Singapore's central bank on Tuesday surprised markets by holding off from further monetary easing, saying an improving outlook for global growth would underpin the trade-reliant economy. The Monetary Authority of Singapore (MAS) said the city-state's economy was on track to meet the official forecast of 2% to 4% growth in 2015, and kept its projections for headline and core inflation unchanged. "The outlook for the global economy has improved slightly, anchored by a stronger recovery in the G3," the MAS said in its half-yearly policy statement. The central bank kept the slope, width and mid-point of the Singapore dollar's policy band unchanged and said it would maintain its policy of a "modest and gradual" appreciation of the Singapore dollar. An estimate of first-quarter gross domestic product released on Tuesday showed that Singapore's economy grew an annualized 1.1% in January-March from the prior quarter, above expectations for 0.5% growth. (Reuters)

Indonesia Central Bank Holds Rate, Looks to Safeguard Rupiah. Indonesia's central bank kept its benchmark interest rate unchanged on Tuesday, as widely expected, saying the existing level is consistent with efforts to contain inflation and the current account deficit. Analysts expected Bank Indonesia (BI) to leave the benchmark rate on hold due to concerns over a weak rupiah and risk of capital outflows if foreigners reduce holdings in government bonds. In a statement on Tuesday, BI said it will "strengthen the stabilisation measures for rupiah, in order to maintain macroeconomic and financial stability." BI also left the overnight deposit facility rate and lending facility rate unchanged at 5.50% and 8.00% respectively on Tuesday. The rupiah has strengthened around 2% since it hit its lowest level in 17 years last month. Foreigners own almost 40% of the Indonesian government's local-currency bonds, fuelling concerns of capital flight when U.S. rates rise. The rupiah was relatively stable at 12,980 per dollar after the policy announcement. (Reuters)

China’s New Bank Loans Beat Forecast, but Monetary Growth Slows. Chinese banks made 1.18 trillion yuan ($189.87 billion) worth of new loans in March, beating expectations, as the authorities ramped up efforts to avert a slowdown in economic growth while lenders cut their exposure to the risky shadow financing. Economists polled by Reuters had expected new local-currency loans at 1.03 trillion yuan in March, compared with 1.02 trillion yuan in February. In spite of the expanded loans, growth in broad money supply slowed, which could put the central bank under more pressure to support the economy. Broad M2 money supply (M2) in March rose 11.6% from a year ago, missing market expectations of 12.3% and slowing from February's 12.5% pace. Outstanding loan growth was 14% in March. (Reuters)

USA

US Retail Sales Heat Up in March. Americans increased their spending on autos, furniture, clothing and building materials in March, lifting retail sales for the first time in four months. Retail sales jumped 0.9% last month, after declining 0.5% in February, the Commerce Department said Tuesday. The rebound suggests that shoppers are returning after an unseasonably cold winter froze sales. Warmer weather fuelled a 2.7% increase in auto sales and a 2.1% boost in building materials, possible signs that the lagging manufacturing and construction sectors might also recover from a winter slump. Excluding the volatile categories of autos, gas, building materials and restaurants, sales rose 0.3%. (AP)

US Businesses Boosted Stockpiles 0.3% in February. U.S. businesses increased their stockpiles by a moderate amount in February although total business sales were weak for a seventh straight month. Businesses boosted stockpiles 0.3% in February after no growth in January, the Commerce Department reported Tuesday. Sales were flat in February following a 2.3% plunge in January. Sales by businesses have either fallen or been flat for the past seven months with the last increase coming in July. Economic growth has been slow over the past six months but economists are looking for a rebound in the current April-June quarter, led by stronger consumer spending. The inventory report showed that stockpiles held by retailers were up 0.4% while wholesale inventories rose 0.3% and manufacturing stockpiles edged up 0.1%. (AP)

Europe

Eurozone February Industrial Production Stronger than Expected. Eurozone industrial production jumped much more than expected in February, data showed on Tuesday, rebounding from a brief slump in January and adding to signs that economic recovery was gathering pace. The European Union's statistics office Eurostat said industrial production in the 19 countries using the euro rose 1.1% month-on-month, the strongest monthly increase in 10 months, for a 1.6% year-on-year gain. Economists had on average expected a 0.4% monthly increase and a 0.7% annual rise. The monthly gain was across the board in the production of energy, capital goods, durable and non-durable consumer goods. While services are the biggest contributor to euro zone economic growth, industrial production is very important too because of its large indirect impact on other sectors. (Reuters)

UK Narrowly Avoids Falling Prices in March. The U.K. has narrowly avoided a drop in consumer prices as the cost of filling up a car rose in Marcha development that's likely to ease concerns of a deflationary spiral that can hurt the economy. Official figures Tuesday showed annual consumer price inflation in the U.K. was flat for the second month in March, a full two percentage points below the Bank of England's target. Unlike previous months, the price of car fuel edged up, offsetting falls in heating gas and clothing and footwear. Many in financial markets were predicting a negative inflation rate, which would have been the first decline since records began in 1989. The statistics office estimates consumer prices were last negative temporarily in 1960. (AP)

Currencies

Dollar slides on U.S. retail sales, IMF outlook. The dollar tumbled on Tuesday, after five straight days of gains, as investors took advantage of weaker-than-expected U.S. retail sales to lighten hefty positions on the greenback that had built up due to expectations of an impending rate increase. A second blow to the U.S. economic outlook came from the International Monetary Fund, which lowered its forecasts for U.S. growth to 3.1% for this year. The yen, meanwhile, gained broadly, hitting a two-year high against the euro after an economic adviser to Japan's Prime Minister Shinzo Abe indicated that the currency might have fallen too far and needed to retrace some of its losses. In late trading, the dollar index was down 0.7% at 98.745. The euro, meanwhile, was last up 0.8% at $1.0653. However, concerns over Greece's ability to repay its debt by a month-end deadline limited the euro's gains. After slumping to a two-year low against the yen, the euro rebounded to trade 0.2% higher at 127.15 yen. (Reuters)

Commodities

Oil Rises on U.S. Production Dips. Crude oil futures rose on Tuesday on signs of falling U.S. oil production, weakness in the dollar and tensions in the Middle East, particularly Yemen. North Dakota's February oil production fell 15,000 barrels per day (bpd) versus January, data showed on Tuesday, although the number of producing wells hit a record high. North Dakota's report followed the U.S. Energy Information Administration's (EIA) Monday report forecasting U.S. shale production will fall by 45,000 bpd to 4.98 million bpd in May, which would be the first monthly decline in four years. Ahead of Wednesday's May contract expiration, Brent rose 50 cents to settle at $58.43 a barrel, just above its $58.40 100-day moving average. U.S. May crude rose $1.38 to settle at $53.29, surging above its 100-day moving average of $52.96. (Reuters)

Gold Cuts Losses on Lower Dollar after Below-Forecast U.S. Data. Gold cut losses on Tuesday, as the dollar turned lower after U.S. retail sales and producer prices data came in weaker than expected, but prices remained below $1,200 an ounce on higher equities. Spot gold, which had fallen 1.2% to its weakest level in two weeks at $1,183.68 an ounce in earlier trade, cut declines to trade down 0.4% at $1,193.16 at 1826 GMT. Spot silver was down 0.7% at $16.20 an ounce, having touched a one-month low of $15.96 earlier. Platinum was down 0.1% to $1,148.00 an ounce and palladium dropped 0.9% to $760.00 an ounce. (Reuters)