Malaysia

Inflation Stays Low at 0.9% in March. Consumer price inflation remained at a level below the long-run average on continued low prices for commodities, in particular, crude oil, and very little sign of imported inflation despite the rapid depreciation of the ringgit over the past three quarters. Headline inflation matched consensus estimates and only narrowly missed our own 1.0% estimate. It shows that the rate of price increase has returned to near January levels after declining to a five-year low of just 0.1% YoY in February. This is mostly due to the upwards adjustment in fuel prices (25 sen/litre) going from February to March. (See Economic Viewpoint report for more comments)

MNCs Expected to Drive E&E Exports This Year. The country’s electrical and electronics (E&E) exports are expected to grow by 5% this year, compared with 8% a year ago. The growth would be fuelled by reinvestments from multinational corporations (MNCs) in the country, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said after launching Semicon South-East Asia 2015. “This is because the MNCs that are already here continue to show confidence in the country. Their reinvestments continue to make the E&E sector the key driver of the nation’s economy,” he said. Last year, Mustapa said, of the RM71.9bil investments generated for the manufacturing sector, some RM11.1bil was for the E&E segment. “Last year was an exceptional year and it is hard to beat the record,” he added. (The Star)

Petronas: Floating LNG facility still viable. Petroliam Nasional Bhd (Petronas) believes its US$1.5 billion floating liquefied natural gas facility (PFLNG1), which is under construction, is still viable and could fetch a double-digit returns despite the decline in global oil and gas prices. Petronas vice president and venture director LNG projects (domestic) Datuk Abdullah Karim said the investment decision is based on long-term oil and gas prices projections. "We're cautiously optimistic, we've long-term projection... it's viable for Petronas to go ahead with current oil price of about US$60 per barrel because we control the gas field and ship and supported the existing customers," he noted. (The Sun Daily)

Asia

Japan Logs First Trade Surplus in Nearly 3 Years in March. Japan posted a goods trade surplus in March for the first time in nearly three years after sharp declines in crude oil prices pushed down import values, the government said Wednesday. The trade balance came to 229.3 billion yen ($1.9 billion) in surplus, the first black ink since June 2012, also reflecting an increase in exports amid a global economic recovery, particularly in the United States. The value of exports rose 8.5% to 6,927.4 billion yen, up for the seventh straight month, led by increased exports of automobiles and semiconductors, the Finance Ministry said in a preliminary report. Imports dropped 14.5% to 6,698.1 billion yen, down for the third consecutive month, affected by decreased imports of oil-related products as well as liquefied natural gas. Lower energy costs since last year more than offset the effects of a weaker yen, which makes imports more expensive. (Nikkei)

BOJ Report Shows Japan Banks Slashing JGB Holdings, Take on More Risk. Japanese banks made deep cuts in its bond holdings and spent double that amount boosting loans and securities investment, a Bank of Japan report showed, a sign the central bank's aggressive bond buying is nudging them into taking on more risk. Since the central bank deployed its stimulus programme two years ago, domestic financial institutions saw their balance sheet expand by 124 trillion yen ($1.04 trillion) of which 89 trillion yen were in cash and deposits, the BOJ's semi-annual report on Japan's financial system showed on Wednesday. As the BOJ gobbled up Japanese government bonds (JGB) aggressively to pump cash into the market, the financial institutions cut their JGB holdings by 34 trillion yen and spent nearly double that amount increasing domestic and overseas lending as well as investing in other securities, it showed. (Reuters)

South Korea Q1 GDP Grows 0.8%. South Korea's economy grew 0.8% in January-March over the previous quarter, the central bank estimated on Thursday, in line with expectations and up from a 0.3% rise in the fourth quarter of 2014. The Bank of Korea's estimates showed private consumption gained a seasonally adjusted 0.6% in the first quarter after rising 0.5% in the October-December period. Capital investment posted no growth after a 4.0% gain. The central bank data showed construction investment during the January-March period rebounded by a seasonally adjusted 7.5%, which felling short of recovering a shocking 7.8% drop in the fourth quarter. Despite the pick-up in the seasonally adjusted reading on a sequential basis, gross domestic product growth slowed to 2.4% on an annual basis. (Reuters)

USA

Existing-Home Sales Up 6.1% in March. Sales of previously owned homes rose to the highest level in 18 months in March, a sign the housing market is gaining strength after a slow start to the year. Existing-home sales increased 6.1% last month from February to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said Wednesday. That was the highest level since September 2013. Economists had expected March sales would increase to a pace of 5.03 million. (The Wall Street Journal)

Mortgage Applications Rose in Latest Week. Applications for U.S. home mortgages rose last week as interest rates declined. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.3% in the week ended April 17. The MBA's seasonally adjusted index of refinancing applications rose 0.6%, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 5.0% to its highest level since June 2013. The refinance share of total mortgage activity fell to 56% of applications, its lowest level since October. (Reuters)

Europe

Berlin Lifts Growth Forecasts as Economy Creates Jobs, Benefits from Cheap Oil. The German government raised its economic growth forecasts to 1.8% for this year and next on Wednesday as Germany rides high on a tide of strong private consumption thanks to rising employment, bigger paychecks and cheap oil. Back in January Berlin had estimated that Europe's biggest economy would expand by 1.5% in 2015 and by 1.6% in 2016. But Economy Minister Sigmar Gabriel said the government now felt more upbeat about the economy as recent data has shown output climbed sharply late last year, while cheap oil and the weak euro are also helping the major exporter. (Reuters)

Currencies

Dollar Mixed after Jump in U.S. Home Resales. The dollar stood mixed against other major currencies on Wednesday after a 6.1% jump in U.S. home sales data lifted expectations that Federal Reserve policymakers may soon hike interest rates. The euro, which earlier traded at $1.08 against the dollar, was last up 0.08% to $1.0742 amid an absence of major news about the Greek financial crisis, which has been pressuring the euro zone currency. The greenback was up 0.20% against the yen at 119.88 yen, while the dollar index was last off 0.09%. In a subdued session for most major currencies, sterling topped $1.50 against the dollar after Bank of England minutes emphasized hopes for a further improvement in the British economy over the next year. (Reuters)

Commodities

Brent Up on More Yemen Bombing. Oil prices diverged on Wednesday with Brent closing up on renewed fighting in Yemen while U.S. crude fell after another weekly rise in inventories despite slower production. Futures of U.K. North Sea Brent, the more globally used benchmark for crude, settled up 1% as warplanes from a Saudi-led coalition bombed Yemen a day after Riyadh said it was ending air strikes against Iranian-allied Houthi rebels there. In New York, U.S. crude futures closed nearly 1% lower after reeling between negative and positive territory as players weighed government data that showed production declines versus higher stockpiles. (Reuters)

Gold has Sharpest Single-Day Loss in 6 Weeks. Gold fell to its lowest level in more than a week on Wednesday, suffering its sharpest single session loss in over six weeks after a report showed strong U.S. home sales in March, raising expectations for a June U.S. Federal Reserve interest rate hike. Spot gold was down 1.3% at $1,186.63 an ounce by 1847 GMT, after falling as low as $1,185.33, the lowest level since April 14. Spot silver fell 1.3% to $15.77 an ounce. Platinum lost 1.9% to $1,125.25 an ounce and palladium fell 1.8% to $755 an ounce. (Reuters)