Malaysia

Malaysia 1Q15 GDP Growth Seen Slowing Slightly. Malaysia's economy likely grew at a slightly slower pace in the first quarter due to weaker exports, but a surge in factory output and private consumption in March prior to the implementation of a new consumption tax may offer support. First quarter GDP was estimated to have risen 5.5% from a year earlier, according to the median forecast of a Reuters poll, slower than 5.8% in the fourth quarter. The forecasts ranged from 5.0 to 6%. Full-year growth is expected to come in at 5.0% according to the latest poll, compared with 6.0% in 2014. “We see a very good chance that this Friday's first quarter of 2015 GDP data will surprise on the upside, given the good historical relationship between Malaysia's industrial production and GDP," Michael Wan, an economist with Credit Suisse in Singapore, wrote in a note to clients on Monday. (Reuters)

Asia

China April Factory Output, Investment, Retail Sales All Miss Forecasts. China's factory output rose 5.9% in April compared with the same period last year, slightly below forecasts and reinforcing expectations that the government will have to step up its efforts to boost the cooling economy. Analysts polled had forecast a 6.0% rise, up from 5.6% in March, which was the weakest reading since the global financial crisis. Fixed-asset investment, a crucial driver of the world's second-largest economy, rose 12% in January-April from the same period a year ago, the slowest pace since December 2000, the National Bureau of Statistics showed on Wednesday. Economists had expected a 13.5% gain, the same as in the first quarter of the year. A breakdown of fixed-asset investment showed slower growth in both government and private sector spending, and a sharp drop in the metal mining sector. Overall spending on new projects stalled. Retail sales, meanwhile, rose 10% last month, missing expectations for a 10.5% rise and easing from March. (Reuters)

China Home Sales Rise as Property Market Stabilizes Amid Easing. China’s home sales rose for the first time this year in April after interest-rate cuts and a reversal in property curbs boosted demand. New-home sales jumped 16% to 485.4 billion yuan ($78.2 billion) last month from a year earlier, according to calculations based on data the National Bureau of Statistics released Wednesday. The 4.8% decline in the sales volume in the January-to-April period narrowed from 9.2% in the first quarter, showing “signs of a recovery” as developers added more supply after stimulus measures, according to a statement on the bureau’s website. (Bloomberg)

Business Climate in Japan up Fifth Straight Month. For a fifth straight month, those on the front lines of the economy said Japan's business climate is improving, the government reported Wednesday. The diffusion indexwhich gauges the mood among taxi drivers, retail clerks and others in positions sensitive to economic trendscame to 53.6 in April, according to the Cabinet Office. April's figure was 1.4 points better than in March and above the 50 mark for the third straight month. A reading above 50 indicates the economy is improving. The index for retail businesses jumped 4.6 points to 53.5. (Nikkei)

USA

U.S. Retail Sales Flat-Line in April. U.S. shoppers kept their spending in check in April, as modest wage growth over the past year keeps family budgets tight. The Commerce Department said Wednesday that retail sales were unchanged last month after rising 1.1% in March. Sales have risen just 0.9% over the past 12 months. Steady hiring has yet to spark significantly higher incomes. The retail sales report also raises the possibility that nasty winter weather can't entirely explain the recent lackluster consumer spending in prior months, since the anticipated spring rebound has not materialized. (AP)

Import Prices Fall for 10th Straight Month. U.S. import prices fell for a 10th straight month in April, likely reflecting the impact of a strong dollar, a sign of benign inflation pressures that could encourage the Federal Reserve to delay raising interest rates. The Labor Department said on Wednesday import prices fell 0.3% last month after slipping 0.2% in March. Economists polled had forecast import prices rising 0.3%. In the 12 months through April prices fell 10.7%. The dollar and lower crude oil prices are keeping a lid on price pressures. (Reuters)

Business Inventories Barely Rise, Suggest First Quarter GDP Contraction. U.S. business inventories barely rose in March as sales recorded their biggest gain in eight months, the latest indication that the economy actually contracted in the first quarter. The Commerce Department said on Wednesday business inventories edged up 0.1% after a downwardly revised 0.2% gain in February. Inventories are a key component of gross domestic product. Retail inventories excluding autos, which go into the calculation of GDP, ticked up 0.1% in March. That was well below the 0.8% gain the government assumed in its advance estimate of first-quarter growth published last month. That was the latest suggestion that first-quarter GDP growth could be revised down from the scant 0.2% annual pace reported in April to show a contraction. (Reuters)

Europe

Euro-Area Growth Picks Up as France Outperforms Germany. Euro-area growth quickened in the first quarter as stronger-than-predicted performances from France and Italy made up for weaker momentum in Germany. Gross domestic product in the region rose 0.4% in the first three months of the year after expanding 0.3% in the previous three months, the

European Union’s statistics office in Luxembourg said Wednesday. That’s in line with the median of 42 estimates in a survey. Greece fell back into recession. While German growth slowed more than predicted, economists say the nation’s recovery is not at risk. GDP rose 0.3% from the fourth quarter, when it was up 0.7%. The French economy beat estimates with growth of 0.6%, the fastest pace in almost two years, in what may mark the start of a more sustained economic revival after three years of sluggish growth. (Bloomberg)

Low Euro, Cheap Energy Helping Eurozone. Cheaper oil prices and a lower euro exchange rate are helping the euro zone economy pick up, but these are temporary factors with an impact that is expected to wane, ECB Executive Board member Benoit Coeure said on Wednesday. "International risks remain very high. The recovery is mainly underpinned by the fall in the euro and by weak energy costs, which are factors whose effect is set to wane in the short term," Coeure told French MPs in Paris. (Reuters)

UK Unemployment Falls to Seven-Year Low. Unemployment in the UK has continued to fall and the number of people in work has continued to rise, according to the latest official figures. The number of people out of work in the January to March period fell to 1.83 million, down 35,000 from the previous quarter and the lowest for seven years. At the same time, the total number in work rose to 31.1 million. Average pay for employees, excluding bonuses, rose by 2.2% in the quarter compared with a year earlier. Including the effect of bonus payments, average pay rose by 1.9% over the same period. The figures mean that regular pay is now growing at its fastest rate for nearly four years. (BBC)

Currencies

Dollar Slides after Weak U.S. Retail Sales Suggest Dovish Fed. The U.S. dollar hit a more than three-month low against a basket of major currencies on Wednesday after weaker-than-expected U.S. retail sales data for April supported expectations that the Federal Reserve would wait longer before hiking rates. Traders are watching U.S. economic data closely for signs of when the Fed will hike interest rates from rock-bottom levels. The euro was last up 1.27% against the dollar at $1.13560. The dollar was last down 1.36% against the Swiss franc at 0.91695 franc and was down 0.64% against the yen at 119.100 yen. The dollar index was last down 0.94% at 93.637. (Reuters)

Commodities

Oil Ends Down despite U.S. Crude Draw; Stockpiles Still Hefty. Oil prices fell after initially rallying on Wednesday as worries about huge supplies weighed on the market despite a second straight week of draws in U.S. crude. Government data showed U.S. oil inventories fell 2.2 million barrels in the week to May 8, to below 485 million barrels, compared with analysts' expectations for a rise of 386,000 barrels. Gasoline and distillate stockpiles also declined. But with stocks at nearly 90 million barrels more than a year ago, analysts and traders are also expecting production and imports to fall rapidly, something that has yet to occur. U.S. crude futures settled down 25 cents at $60.50 a barrel, after rallying to $61.85. North Sea Brent settled at $66.81, down 5 cents. It had surged to $68.17 earlier. (Reuters)

Gold Up 2% as Dollar Drops. Gold jumped 2% on Wednesday, rising well above $1,200 an ounce to a five-week high as the dollar hit a three-month low after disappointing U.S. employment data. U.S. retail sales were also unchanged in April as households cut back on purchases of automobiles and other big-ticket items. Spot gold hit a five-week high of $1,218.80 an ounce after the U.S. data pushed prices through the 100-day and 200-day moving averages, attracting additional technical buying. The spot market was trading up 1.8% at $1,214.60 an ounce by 1838 GMT. Silver climbed 3.4% to a five-week high of $17.11 an ounce, while platinum rose 1% to $1,143.35 an ounce. Spot palladium was up 0.5% at $786 an ounce. (Reuters)