Global

TPP Supporters Breathe Easier as U.S. Trade Bill Clears Senate Hurdle. A 12-nation Pacific trade agreement cleared a crucial test in the U.S. Senate on Thursday, giving a resounding thumbs-up to legislation that holds the key to President Barack Obama's diplomatic pivot to Asia. Just two days after Democrats defied Obama to block debate on a bill to "fast-track" trade deals such as the Trans-Pacific Partnership (TPP) trade deal through Congress, the Senate voted 65 to 33 to move ahead with consideration of the measure. Strong support for the bill on this second go-round suggests senators are unlikely to reject the bill, although heated debate is still expected in the Senate over amendments and later in the House of Representatives, where many Democrats staunchly oppose the TPP on fears trade liberalization will cost U.S. jobs. (Reuters)

Asia

ASEAN Financial Institutions Urged to Manage Risks from Cross-border Operations. Financial institutions in ASEAN countries must develop the capacity and capability to manage risks arising from cross-border operations. Bank Negara Malaysia Deputy Governor Datuk Muhammad Ibrahim said given the greater complexity of business, boards and management would be confronted with more difficult and multi-dimensional challenges in driving strategy and overseeing operations. "This calls for greater emphasis on board and management composition and diversity in terms of skills and experience," he added, in his keynote address at the ASEAN Risk Conference: "ASEAN Financial Integration - Outlook and Implications" here Thursday. (Bernama)

China's Fiscal Spending Jumps 33.2% in April. China's fiscal spending jumped 33.2% in April from a year earlier, data from the Ministry of Finance showed on Thursday, quickening sharply from the 4.4% rise seen in March, reflecting the government efforts to support a slowing economy. The government has set a wider budget deficit for 2015 to step up spending and spur economic growth. Government spending totaled 1.25 trillion yuan ($201.57 billion) in April, the ministry said. (Reuters)

China Imposes $160 Billion Municipal Bonds for Debt Swap. China is imposing a $160b municipal bonds for debt swap on banks in an effort to shift some of the financing costs of cash-strapped local governments back to lenders, local media reported on Wednesday. Ballooning debts at municipalities have emerged as one of the faultlines in China’s economy as growth slows and property prices dip. Beijing is seeking to limit debt servicing costs for municipalities by obliging banks to switch out loans, which frequently carry interest rates over 7 per cent, in return for municipal bonds with a capped coupon. The swap will crimp banks’ income, but the central bank will cushion the blow by accepting municipal bonds as collateral for key lending facilities through which it provides liquidity to commercial lenders. (Financial Times)

USA

U.S. Producer Prices Resume Downward Trend in April. U.S. producer prices resumed their downward trend in April as the cost of energy fell and a strong dollar kept underlying inflation pressures benign. The Labor Department said on Thursday its producer price index for final demand fell 0.4% last month, declining for the third time this year. The PPI increased 0.2% in March. In the 12 months through April, producer prices fell 1.3%, the biggest year-on-year decline since 2010, after declining 0.8% in March. Economists had forecast the PPI rising 0.2% last month and falling 0.8% from a year ago. (Reuters)

Europe

Bank of England Cuts Growth Outlook. The Bank of England cut its forecasts for British economic growth over the next three years on Wednesday, and cautiously backed bets in financial markets that it will only start to raise interest rates in around a year's time. The central bank now expects growth this year of 2.5%, down from a 2.9% projection in February and closer to most other economic forecasters' expectations. Britain was the fastest-growing major advanced economy in 2014. The Bank said its growth downgrade was because interest rates were likely to increase slightly faster than markets had expected three months ago, sterling had strengthened and the outlook for house-building and productivity had weakened. (Reuters)

Carney Wants Clarity on Timing of Britain’s EU Referendum. Bank of England Governor Mark Carney indicated he’s in favor of Prime Minister David Cameron holding an early referendum on Britain’s European Union membership. The vote should take place “as soon as necessary,” Carney said on BBC Radio on Thursday. “It’s in the interests of everybody that there is clarity about the processes and the question and the decision.” Cameron, who won a majority in Parliament in this month’s election, has pledged to hold a referendum by the end of 2017 on whether Britain should stay in the EU. He first wants to renegotiate membership terms. (Bloomberg)

Greece to Privatize Port, Airports in Concession to Creditors. Greece will continue with efforts to privatize the country’s largest port and regional airports as it seeks ways to attract investment for other state assets, Economy Minister George Stathakis said, in a government concession in talks with its creditors. A sale of the Piraeus Port would be a reversal on the part of Greece’s Syriza party-led government, which had earlier pledged to block such moves. (Bloomberg)

Currencies

Dollar Drifts Lower after U.S. Data Undermines Q2 Growth Hopes. The U.S. dollar held near its lowest since January against a currency basket on Thursday after soft U.S. producer prices data challenged hopes for better U.S. economic growth and supported the view that the Federal Reserve would delay hiking interest rates. The U.S. dollar index remained near a low of 93.133 hit earlier in the session. That level was the lowest since Jan. 22, when the European Central Bank announced a program of quantitative easing. The euro was last 0.35% higher against the dollar at $1.13965 after hitting a roughly three-month high of $1.14450 earlier in the session. The dollar was up 0.07% against the yen at 119.235 yen after hitting a two-week low of 118.885. (Reuters)

Commodities

Oil Down on Ample Supply as June Brent Expires. Oil futures pulled back on Thursday as ample global supply weighed on prices while Brent's front-month June contract headed to expiration. Trading was choppy as market participants tried to square bullish factors, including recent drops in U.S. inventories, spot demand for crude in Asia and Middle East unrest, with basic supply fundamentals of historically high inventories and ample production. Expiring front-month Brent June crude fell 22 cents to settle at $66.59 a barrel. July Brent fell 57 cents to settle at $66.70. June U.S. crude fell 62 cents to settle at $59.88. (Reuters)

Gold Hits Three-Month High as U.S. Data Eases Rate Fears. Gold hit a three-month high on Thursday as the dollar came under pressure following a new batch of mixed U.S. data that pushed back expectations of when interest rates in the world's largest economy will rise .Spot gold rose to the highest since Feb. 17 at $1,227.04 an ounce and was trading up 0.5% at $1,221.43 an ounce by 1828 GMT. The metal was heading for its biggest weekly gain since January, mostly aided by an almost 2% rally on Wednesday after the dollar first tumbled to three-month lows after flat U.S. retail sales releases. Silver rose to a three-month high of $17.55 an ounce. Platinum was up 0.7% at $1,155.74 an ounce, while palladium fell 0.7% to $778.50 an ounce. (Reuters)