Asia

ASEAN Leaders to Promote SMEs, PPP and Movement of Skilled Labour. ASEAN leaders are expected to give greater emphasis to the development of small and medium enterprises (SMEs), towards efforts to propel the region's economy towards a single market under the ASEAN Economic Community (AEC). The 10-member grouping is set to pledge to provide a conducive environment for the SMEs and greater access for them to the formal financial system under the KL Declaration to be adopted on Monday. The Public-Private Partnership (PPP) will continue be one of the promoted areas. The declaration is expected to see stronger commitment to narrow the gap between the more advanced economies in ASEAN and those less developed. (Bernama)

ASEAN, EU Explore Possibility of Resuming FTA Talks. ASEAN and the European Union (EU) are set to explore the possibilities of resuming negotiations on the ASEAN-EU free trade agreement (FTA) after the ASEAN Economic Community (AEC) implementation. European commissioner for trade Cecilia Malmstrom said ASEAN and EU senior officials would meet towards the year-end to take stock and explore the way forward and report back to the ministers. "The EU is committed to have a region to region (ASEAN-EU) FTA but it is important that we get it right," she told reporters at a briefing after the 13th ASEAN Economic Minister-EU Trade Commissioner Consultation here Sunday. The consultation, which was co-chaired by Minister of International Trade and Industry Datuk Seri Mustapa Mohamed, is held in conjunction with the 26th ASEAN Summit. (Bernama)

China Plans Greater Yuan Convertibility Inside and Outside FTZs. China plans to take a giant step towards making the yuan more convertible by extending a pilot scheme allowing the currency to be traded with few restrictions to all its free trade zones, before taking the scheme nationwide later this year. The liberalisation, revealed to Reuters on Friday by three sources with knowledge of the plan, underlines China's ambition to transform the yuan into a major global currency. The timing would aid Beijing's campaign this year to persuade the International Monetary Fund to include the yuan in its currency basket. Under the pilot scheme, firms in the Shanghai free trade zone (FTZ) can move the yuan and other foreign currencies in and out of China for capital account transactions. That lets them raise money overseas and bring the funds back to China for real investment - a practice that is otherwise banned in China. (Reuters)

USA

Chill Persists in March U.S. Durable Goods Report. Aircraft and defense orders pushed headline orders to a solid increase in March, but the underlying details were less robust. Modest inventory accumulation and slumping order backlogs are troubling signs that production will remain slack into the current quarter. This should become evident in next week’s production gauges from the Chicago PMI and manufacturing ISM. Headline orders rose 4.0% following a -1.4% decline in February. The headline gain was stronger than forecasters anticipated (0.6%), but this was largely due to a 34.1% jump in civilian aircraft orders and a 17.0% rise in defense goods. Headline orders are down -3.8% annualized relative to Q4 2014, and up just 0.7% in year-on-year terms. (Bloomberg)

Europe

German Business Morale hits Highest Level since June. German business morale rose to its highest level in almost a year in April, a leading survey showed on Friday, in a sign that Europe's largest economy has started the second quarter on a strong footing. Ifo's business climate index, based on a monthly survey of some 7,000 firms, climbed to 108.6 in April from 107.9 in March. That was its highest reading since June 2014 and was slightly higher than the Reuters consensus forecast for 108.4. "German business optimism seems to be unstoppable, paving the road for an excellent year of growth," said Carsten Brzeski, senior economist at ING. However, he cautioned against being too optimistic, pointing to the Greek debt crisis, a soft spell for the U.S. economy and weaker Chinese growth. (Reuters)

Eurozone Officials Seek to Bypass Varoufakis to Spur Greek Talks. A fraught eurozone meeting in Riga at the weekend has left Yanis Varoufakis, the Greek finance minister, increasingly isolated both in Brussels and in Athens as officials seek to bypass him in an effort to jump-start bailout talks. Greece’s dire financial position is forcing eurozone authorities to look beyond Mr Varoufakis to Alexis Tsipras, prime minister, much like in February when Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup, brokered an extension of the current bailout programme. According to two eurozone officials, Mr Dijsselbloem phoned Mr Tsipras from Riga in an effort to mend fences after Friday’s feisty eurogroup meeting, where Mr Varoufakis was rounded on by his eurozone colleagues. Amid the acrimony, differences over a new list of reforms that is to be agreed by Athens were barely discussed at the meeting, putting off indefinitely a deal to unlock access to the funds left from Greece’s €172bn bailout. (Financial Times)

Currencies

Dollar on Defensive after More Weak U.S. Economic Data. The dollar started the week on the defensive on Monday after more disappointing U.S. economic data reinforced expectations the U.S. Federal Reserve will not hike interest rates any time soon, while concerns about Greece's ongoing debt talks pressured the euro. Data on Friday showed U.S. business investment spending plans fell for a seventh straight month in March, suggesting the economy was struggling to rebound. The data sent the dollar index, which tracks the greenback against a basket of six major rivals, to a nearly three-

week low of 96.755. It stood at 96.911 in early Asian trading. The dollar was buying 118.91 yen, down about 0.1% on the day and well below last week's high of 120.10 yen touched on Thursday. The euro was slightly down at $1.0868, below Friday's more than two-week high of $1.0900 hit on hopes of progress in Greece's negotiations with European Union and International Monetary Fund creditors. (Reuters)

Commodities

Brent at 4-½ Month High; U.S. Crude Up for Sixth Week. Oil prices diverged on Friday, with Brent hitting 4-1/2-month highs on continued fighting in Yemen as U.S. crude fell on concerns of another upcoming stock build, though both benchmarks headed toward weekly gains. Fighting between Yemen's warring factions raged in southern and central parts of the country, and air strikes from a Saudi-led coalition hit Houthi militia forces, creating more tensions over the security of Middle East oil supplies. Brent settled up 43 cents at $65.28 a barrel after hitting a Dec. 10 high of $65.80. Brent also finished up for a third straight week, gaining 3% this week. U.S. crude closed down 59 cents at $57.15 a barrel, retreating from Thursday's 2015 high of $58.41. It rose for a sixth straight week, its longest such stretch since the first quarter of 2014. This week's gain was 2.5%. (Reuters)

Gold Falls to 1-Month Low as Global Equities Hit All-Time Highs. Gold hit its lowest level in more than a month, falling for the third straight week as strength in global equities diverted interest from the precious metal, although uncertainty over the timing of a U.S. rate rise kept prices in a tight range. Spot gold was down 1.4% at $1,177.03 an ounce at 1834 GMT Friday, while U.S. gold futures for June delivery settled down $19.30 an ounce at $1,175. That marked spot gold's largest single-session decline since March 6. Spot prices are down 2.2% this week, their biggest weekly loss in seven weeks. Silver was down 1% at $15.71 an ounce, after hitting its lowest level in five weeks at $15.56, while platinum was down 1.3% at $1,117.75 an ounce and palladium was up 0.25% at $769.50 an ounce. (Reuters)