Asia

ASEAN Summit Concludes with Adoption of Three Declarations. ASEAN adopted three documents including the 'Kuala Lumpur Declaration on a People-Oriented, People-Centred ASEAN' as the 26th ASEAN Summit presided over by Malaysian Prime Minister Datuk Seri Najib Tun Razak came to a close here tonight. Two other documents adopted were the 'Langkawi Declaration on the Global Movement of Moderates', and the 'Declaration on Institutionalising the Resilience of ASEAN and its Communities and People to Disasters and Climate Change'. The gathering of the 10-member grouping officially opened at the Kuala Lumpur Convention Centre (KLCC) this morning before regional leaders converged on the island of Langkawi in northern Peninsular Malaysia for the retreat and closing sessions. (Bernama)

Fitch Downgrades Japan, Joins Moody's in Warning on Fiscal Policy. Fitch Ratings downgraded Japan's credit rating by one notch after the government failed to take steps in this fiscal year's budget to offset a delay in a sales tax increase, the agency said on Monday. Fitch cut its rating on Japan by one notch to A, which is five notches below the top AAA rating. The outlook is stable. "One reason why Japan is at single A, which is a low rating, is the fragility around the baseline case for the public debt," said Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch. "The tolerance to fluctuations in growth and interest rates is low." A plan to lower the corporate tax rate also increases uncertainty about whether the government will generate enough revenue to address its debt burden, Fitch said in a statement. Fitch's move follows a similar downgrade by Moody's Investors Service late last year and could pressure the government to take tough measures in a fiscal discipline plan that is due sometime around June. (Reuters)

Japan March Retail Sales Fall 9.7% YoY, Misses Consensus. Japanese retail sales fell 9.7% in March compared with the same month last year, when sales had surged the most in 17 years ahead of a consumption-tax increase, government data showed on Tuesday. The result compared with the median forecast for a 7.3% year-on-year drop in a poll of 17 economists. Compared with the previous month, sales fell 1.9% on a seasonally adjusted basis. (Reuters)

China March Industrial Profits Fall 0.4%, Down 2.7% in Q1. Profits earned by Chinese industrial firms fell 0.4% in March from a year earlier to 508.61 billion yuan ($82 billion), the National Bureau of Statistics said on Monday. That compared with a 4.2% year-on-year fall in the first two months of the year. For the first quarter of the year, profits declined 2.7% from a year earlier to 1.25 trillion yuan, the bureau said. "Despite the narrowed decline in profits, the operational situation of industrial enterprises remained grave," He Ping, an official at the bureau said in a statement. The NBS attributed the narrower decline in profits last month to a deeper fall in raw material prices and lower financing costs cost after the central bank cut interest rates. (Reuters)

USA

U.S. Services Sector Growth Cools in AprilMarkit. U.S. services sector expansion eased slightly in April from a seven-month high in March on a dip in new business growth, but the pace of hiring in the sector accelerated to its highest since last June. Financial firm Markit said its "flash," or preliminary, reading of its Purchasing Managers Index for the services sector slipped to 57.8 in April from a final reading of 59.2 in March, which had been the highest level since August. A reading over 50 signals expansion in economic activity. Markit's April reading of employment at service companies, meanwhile, rose to a 10-month high of 55.4 from March's 54.0. The services index's new business component pulled back slightly from the month before, when it had notched its highest level since September. (Reuters)

Europe

Germany Attracted Record Foreign Investment in 2014. Germany attracted a record 3.2 billion euros in foreign investment last year, as the number of new investors reached an all-time high thanks largely to growing interest from China, the trade and investment agency said. Foreign investors launched 1,199 new projects in the country in 2014, up a fifth from a year earlier, and the value of projects rose by 18.5% from 2.7 billion euros in 2013, according to the report by Germany Trade & Invest (GTAI), a government institution. Foreign investment also created at least 16,000 jobs in Europe's biggest economy last year, GTAI said. The largest number of investors by far came from China, pushing the United States down to second place. China launched 190 projects in Germany last year ranging from production to research and development, 37% more than in 2013. (Reuters)

Greece Prepares Legislation on Reforms to Appease EU/IMF Lenders. Greece is preparing draft legislation with reform proposals promised to the country's EU/IMF lenders, the finance ministry said on Monday, as Athens scrambles to strike a deal with the creditors to unlock cash. The move to legislate the reforms appeared to be the latest effort to bring new momentum in the painfully slow negotiations. The lenders have demanded that Greece show it is committed to implementing reforms by passing them through parliament. The bill will cover fiscal issues, tax reforms and public administration reforms, television media licenses and a tax on TV advertisements, the finance ministry said. (Reuters)

Unemployment in France Rises Again. There has been a second consecutive monthly rise in the number of people out of work in France. Data from the Labour Ministry showed the number of registered job seekers in mainland France rose by 15,400 last month to just over 3.5 million. That’s a jump of 0.4% on the previous month and 4.9% year-on-year. The figures are close to an all-time high. There was a spike in the number of young people out of work rising by one percent from February to 542,300. (Euronews)

Currencies

Euro Edges Higher as Greece Revamps Debt Negotiating Team, Dollar Index at 3-Week Low. The euro scaled a three-weak peak against the dollar on Monday, on optimism about Greece's prospects after the government reshuffled its bailout negotiating team as the cash-strapped country seeks to avoid a default. On Monday, Greek Prime Minister Alexis Tsipras appointed Deputy Foreign Minister Euclid Tsakalotos, an economist well-liked by officials representing creditors, as coordinator of the bailout negotiating team, giving him a more active role in the debt talks. The euro rose as high a $1.0925, the highest level since April 7. It was last up 0.1% at $1.0883. Still, investors remained negative on the euro, with sizable short positions of 214,465 contracts last week. The dollar index fell 0.2% to 96.744, a three-week low, as investors brace for the Federal Reserve's monetary policy meeting this week. The dollar was flat against the yen at 119.03 yen after trading higher for most of the day, as Fitch cut Japan's credit rating. (Reuters)

Commodities

Oil Slips as Ample Supply Counters Yemen, Drilling Slump. Crude settled lower on Monday as ample global supply blunted support from the conflict in Yemen and the falling number of U.S. rigs drilling for oil and kept traders cautious after prices reached 2015 peaks last week. U.S. commercial crude inventories have risen for 15 straight weeks to a record 489 million barrels even with the recent fall in drilling activity. Brent June crude futures fell 45 cents to settle at $64.83 a barrel, having swung from $64.40 to $65.61. Friday's $65.80 intraday high was a 2015 peak. U.S. crude for June delivery slipped 16 cents to settle at $56.99. Brent's premium to U.S. crude reached $8.33 a barrel on Monday, but ended at $7.84 based on settlements falling short of Friday's $8.43 peak. (Reuters)

Gold Rallies above $1,200/oz as Shorts Take Cover. Gold jumped more than 2% on Monday above $1,200 an ounce, on track for its biggest one-day rise since January as the rally had some dealers scrambling to cover short positions and the May options expiry triggered more buying. The more volatile silver market rallied 5%, also on track for its biggest surge since January, supported by the gold market. Spot gold was up 2.1% at $1,203.30 an ounce at 1856 GMT, well above the prior session's five-week low. U.S. gold futures for June delivery settled up 2.4%, at $1,203.20 an ounce. Spot silver was up 4.4% at $16.38 an ounce. Spot platinum was up 2% to $1,144.85 an ounce and palladium was up 1.1% at $778.80 an ounce. (Reuters)