Malaysia

Pre-GST Spending Lifts Money Supply and Loans Growth. Money supply growth picked up pace for the second consecutive month in March consistent with expectations of a spike in consumer spending before the April implementation of the Goods and Services Tax. M3 or broad money expanded at an annualised 7.9%. The narrowest money supply measure, M1, expanded 10.2% as consumers used liquid assets to make pre-GST purchases. Loans growth improved for a second consecutive month to 9.2% after hitting a near five-year low in January. Despite the substantial improvement in conditions in March, we stand by our expectations for money supply and loans growth to be subdued this year on tight lending conditions, weaker economic growth and consumer pessimism. Our forecast is for loans growth to average between 7.0% and 8.0% in 2015, below the 8.7% seen in 2014. (See Economic Viewpoint for further comments)

Asia

China April Official PMI Shows Factories Struggling to Grow. China's factories struggled to grow in April as domestic and export demand remained weak, reinforcing expectations that Beijing will roll out more measures to support the slowing economy. The official manufacturing Purchasing Managers' Index (PMI) stood at 50.1 in April, identical to the previous month's reading and just above the 50-point mark that separates growth from contraction on a monthly basis. The PMI index for new orders - a proxy for foreign and domestic demand - was unchanged at 50.2 in April from March. New export orders contracted again and at a slightly faster pace, falling to 48.1 from 48.3 in March. Manufacturers also continued to shed jobs, and at a slightly faster clip than in March. (Reuters)

China April HSBC PMI Shows Biggest Drop in Factory Activity in a Year. China's factories suffered their fastest drop in activity in a year in April as new orders shrank. The HSBC/Markit Purchasing Managers' Index (PMI) fell to 48.9 in Aprilthe lowest level since April 2014from 49.6 in March, as demand faltered and deflationary pressures persisted. The number was weaker than a preliminary reading of 49.2, and below the 50-point level that separates growth from contraction compared with the previous month. The overall new orders sub-index dipped to 48.7 in April, the sharpest contraction in a year. That suggested a marked deterioration in domestic demand, as new export orders showed tentative signs of improvement. (Reuters)

USA

Factory Orders Post Largest Gain in 8 Months. New orders for U.S. factory goods recorded their biggest increase in eight months in March, boosted by demand for transportation equipment, but the underlying trend remained weak against the backdrop of a strong dollar. The Commerce Department said on Monday new orders for manufactured goods increased 2.1 percent, the largest gain since July last year, after a revised 0.1 percent dip in February. Economists had forecast orders rising 2.0 percent in March after a previously reported 0.2 percent gain in February. Orders excluding transportation were flat in March after edging up 0.1 percent in February. (Reuters)

Manufacturing Growth Holds at Low Level in April: ISM. The pace of U.S. manufacturing growth held at its slowest in almost two years in April, as a rebound in new orders was offset by employment shrinking to its lowest level in more than five years. The Institute for Supply Management (ISM) said its index of national factory activity was 51.5 in April, matching the March reading, which had been the lowest since May 2013. The reading fell shy of expectations of 52.0, according to economists. A reading above 50 indicates expansion in the manufacturing sector. This was the 29th-consecutive headline reading at or above 50. (Reuters)

Consumer Sentiment Up in April from Prior Month. U.S. consumer sentiment in April rose versus the prior month to its highest level since January, but was slightly below analyst expectations for a final reading. The University of Michigan's final April reading on the overall index on consumer sentiment came in at 95.9, unchanged from the preliminary April reading. The final reading in March was 93.0. Analysts were looking for a final April reading of 96.0. (Reuters)

Construction Spending Hits Six-Month Low in March. U.S. construction spending fell in March to a six-month low as outlays on private residential construction spending declined sharply, which could add to concerns about the economy's ability to rebound strongly from the first-quarter's soft patch. Construction spending slipped 0.6 percent to an annual rate of $966.6 billion, the lowest level since September, the Commerce Department said on Friday. February's outlays were revised to show them unchanged instead of the previously reported 0.1 percent dip. Economists had expected construction spending to rise 0.5 percent in March. (Reuters)

Europe

Price Rise Hurts Eurozone Factories. Eurozone factory activity has grown at a slower pace after manufacturers raised their prices for the first time in eight months. For April, the Purchasing Managers' Index (PMI) from Markit was 52.0, down from 52.2 in March when it reached a 10-month high. But the figure has been above 50 for 22 months, showing an expansionary trend. Ireland and Spain performed best, with an increase in export orders boosting most other eurozone countries. The Austrian PMI showed that the country's manufacturing continues to stagnate, following a 7-month pattern of slowing. Greece saw the sharpest fall in new orders and production since 2013. But manufacturing employment continued to rise during April, with job creation rising for eight months consecutively - its highest since August 2011. (BBC)

Currencies

Dollar Rises on Light Trade. The dollar rose for a second straight session on Monday in thin trading, after data suggesting the U.S. economy might be stabilizing following a soft patch in the first quarter helped the dollar recover after a two-week drop. The greenback moved in tight ranges against major currencies as trading was thinned by market holidays in Britain and Japan. The dollar index gained about 0.7 percent on Friday after data showed a jump in consumer sentiment and stronger-than-expected vehicle sales and was 0.2 percent higher on the day at 95.485. The euro was down 0.5 percent against the greenback at $1.1138 following a report that showed German factory activity cooled in April from an 11-month high in March. The dollar was steady against the yen at 120.10 yen. Sterling slipped 0.2 percent to $1.5118 ahead of tight British parliamentary elections on Thursday. (Reuters)

Commodities

Oil Down after 2015 High. Brent oil hit a 2015 high before settling down with U.S. crude on Monday as Saudi Arabia's plan to halt bombing in Yemen eased tensions over the security of oil Middle East supplies. A stronger dollar, following the largest U.S. factory orders in eight months, had also weighed on crude. Brent crude touched the year's high of $67.10 before settling down just a penny at $66.45 a barrel. A public holiday in Britain had limited trading volumes in Brent. U.S. crude settled down 22 cents at $58.93. A Saudi-led Arab alliance, waging an air campaign against Houthi fighters in Yemen, was considering calling a truce to allow humanitarian relief, Saudi-owned al-Arabiya television quoted the country's foreign minister as saying. (Reuters)

Gold Rebounds from 6-Week Low on Weak Data in China. Gold climbed 1 percent on Monday, buoyed by weak Chinese factory data and earlier dollar weakness, lifting prices above the prior session's six-week low, though caution over the timing of a U.S. interest rate hike kept prices hemmed within a narrow range. Silver also jumped, to its highest level in nearly four weeks, on the coattails of gold prices. Trading across financial markets was thinned by a UK holiday on Monday. Spot gold was up 1 percent at $1,189.65 an ounce at 2:58 p.m. 1858 GMT, off a high of $1,193. Silver was up 1.9 percent at $16.44 an ounce. Platinum was up 1.6 percent at $1,145 an ounce, while palladium was up 1.2 percent at $781.80 an ounce. (Reuters)