Malaysia

Nielsen: Malaysian Consumers Less Pessimistic in Q1. Malaysia's consumer confidence index improved five points to 94 points in the first quarter of this year, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions. Global consumer confidence averages at 97 points. Nielsen Malaysia Country Manager Richard Hall said in a statement that the improvement in Q1 can be attributed to the decline in petrol prices. "Malaysians in general are more concerned than they are confident with the nation's economic conditions," he said. The survey found 47% of Malaysians cited the economy as their main concern with 22%worried about increasing food prices and 21% concerned about job security. (Bernama)

Oil and Gas Sector Seen to Add 52,300 Jobs by 2020. The oil and gas sector is expected to add 52,300 jobs, mostly highly-skilled workers, by 2020, Minister in Prime Minister's Department Datuk Seri Abdul Wahid Omar said. He said the government is building a significant human capital in the sector by churning out more than 16,000 highly-skilled and highly-paid technical professionals. The number of skilled employees in the sector is also expected to grow when the Pengerang Integrated Petroleum Complex in Johor comes on stream in the near future, he said. (Bernama)

New Target for Rapid Project Aimed at Lower Cost of RM89 Billion. Petronas will reorder some work being planned at the Refinery and Petrochemicals Integrated Development (Rapid) project in Pengerang, Johor to lower the project’s cost. It is now estimated that Rapid will cost RM89b, compared with its original price tag of RM97b. “We have taken a decision that some of the chains (phases) in the petrochemical plant would be rephased,” president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin said. “Basically, some of the chains we will do a bit later,” he told a dialogue session at the 18th Asia Oil and Gas Conference 2015. (The Star)

Asia

Japan’s Economy Grows More Than Forecast as Business Spend. Japan’s economy expanded for a second straight quarter, beating forecasts as businesses increased spending and boosted inventories. Gross domestic product grew at an annualized 2.4% in the three months through March from the previous quarter, when it increased by 1.1%, the Cabinet Office said on Wednesday. The median estimate was for a gain of 1.6%. Capital investment gained 0.4% from the previous three months, rising for the first time in four quarters. From the previous quarter, private consumption rose 0.4%. Inventory buildup added 0.5 percentage point to non-annualized growth in the first quarter. (Bloomberg)

Indonesia Central Bank Keeps Key Rate Unchanged. Indonesia's central bank kept its benchmark rate unchanged at 7.50%, as expected, ignoring some political pressure to cut because economic growth has fallen to its slowest pace since 2009. Bank Indonesia (BI) said the current rate level remains consistent with efforts to contain inflation and make the current account deficit healthier. Eighteen out of 21 analysts in a poll had forecast BI would hold the benchmark rate steady at 7.50%, where it has been since a 25 basis point cut in February. BI also left unchanged both its overnight deposit facility rate at 5.50% and lending facility rate at 8.00%. (Reuters)

Beijing's New Manufacturing Plan Centers on Innovation. China plans to provide support to 10 key manufacturing fields as part of a new 10-year plan to beef up the sector, focusing on technological development as the old strategy based on cheap labor runs up against its limits. The Made in China 2025 plan released Tuesday is the first part of a three-phase project slated to end in 2049, modern China's 100th anniversary. During the first phase, to run through 2025, China will use technology to advance the manufacturing sector as a whole and improve its efficiency. Next, it plans to join such countries as the U.S., Germany and Japan as a world manufacturing power by 2035. And by 2049, China aims to become a leading power. (Nikkei)

Japanese Household Spending Falls at Fastest Pace in FY2014. Japanese household spending in the year ended March was down 5.0% from a year earlier, falling at the fastest pace on record amid price rises following the consumption tax hike in April 2014, the government said Tuesday. The drop in spending in fiscal 2014 to a nationwide household average of 248,929 yen was the largest decline since comparable data became available in fiscal 2001 ended March 2002, beating the previous record fall of 2.6% in fiscal 2008, when the economy was hit hard by the global recession. (Nikkei)

Japan Finance Ministry Draft Reveals Deep Rift on Fiscal Reform. Advisers to Japan's Finance Ministry have accused the Cabinet Office of making overly rosy assumptions about growth and spending, a draft document showed on Tuesday, highlighting sharp internal divisions over how to tame the country's massive debt. The document, reviewed by Reuters, offers a rare glimpse of in-fighting within Shinzo Abe's government, and reflects fears within the hawkish Finance Ministry that some policymakers close to the prime minister want to backslide on fiscal spending cuts. The government is scheduled to present a final version of a plan to lower public debt next month.

USA

Robust U.S. Housing Data Offers Hope for Q2 Growth. U.S. housing starts jumped to their highest level in nearly 7.5 years in April and building permits soared, hopeful signs for an economy that is struggling to regain strong momentum after a dismal first quarter. Groundbreaking surged 20.2% to a seasonally adjusted annual pace of 1.14 million units, the highest since November 2007, the Commerce Department said on Tuesday. The percent increase was the biggest since February 1991. Adding to the report's strong tenor, March's starts were sharply revised higher. Groundbreaking for single-family homes, which accounts for the largest share of the market, hit its highest level since January 2008. Starts for the volatile multifamily segment also recorded hefty gains last month. (Reuters)

Europe

UK Enters Deflation for First Time since 1960. Prices faced by households have fallen by 0.1% over the last year. An annual fall in prices is often referred to as "negative inflation" or "deflation". Based on comparable historic estimates, the last time the UK saw consumer price deflation was in the year to March 1960, when prices fell by an estimated 0.6%. The main downward push on inflation came from air and sea fares. Prices for both rose on the month, but by far less than a year ago, with the timing of Easter a likely factor. The falling rate of inflation in recent months is due in large part to falling prices for food and motor fuels. While the latter are now on the rise, prices at the pump are still lower than a year ago, meaning that they are still pulling the rate of inflation down. (Office for National Statistics)

German Economic Sentiment Hits 5-Month Low. German economic sentiment hit a five-month low in May, a survey of financial analysts and institutional investors showed Tuesday, suggesting the economic upswing in Europe's largest economy is losing momentum. The ZEW indicator of economic expectations dropped for the second straight month, to a reading of 41.9 in May from 53.3 in April and was the lowest since December 2014. The move was prompted by "unexpectedly poor growth figures in the first quarter of 2015 and turmoil in the stock and bond markets," ZEW President Clemens Fuest said. (MarketWatch)

EU Says Progress in Talks with Greece is Slow. Progress in talks between Greece and its creditors on more funding is slow, the European Commission said on Tuesday, denying the existence of a new proposal reported by the Greek press that would give Athens cash on more favorable terms. Greek newspaper To Vima said on Monday the Commission had prepared a possible compromise, proposing that creditors should accept a lower primary surplus target from Greece in return for tax reform and a hike in sales taxes. The report lifted the Athens stock market, but the Commission in Brussels and the Greek government both denied any knowledge of such a proposal. (Reuters)

Currencies

Strong U.S. Housing Data Boosts Dollar. The dollar rose on Tuesday on unexpectedly better U.S. April housing data, compounding an earlier euro sell-off that was spurred by hints the European Central Bank could take more action to lower euro zone bond yields and boost inflation. The euro hit a two-week low of $1.11185, down 1.74% after the U.S. data, according to the EBS trading platform. It leveled off around $1.11540, down 1.42% in late New York trade. Sterling fell to $1.5445, a one-week low, before rebounding to $1.5499 for a loss of 0.95%. Data showed British inflation fell into negative territory last month for the first time since 1960. The dollar rose 0.62% to 120.72 yen, its best level since April 13. (Reuters)

Faster ECB Money-Printing Excites Investors. The European Central Bank will accelerate the pace of money printing to buy government bonds over the next two months, one of its top officials said, while voicing concern about recent swings on bond markets. The comments from Benoit Coeure, initially made in private on Monday at a conference attended by one of Britain's richest hedge fund managers Alan Howard, some of his peers and academics, sent markets into a flurry when they were published on Tuesday. Anticipating a flood of yet more euros onto the market, the single currency tumbled when the ECB released its Executive Board member's remarks, sending European shares rising to near multi-year highs. (Reuters)

Commodities

Oil Slides More Than 3% on Dollar Rally, Glut Worry. Oil prices fell more than 3% on Tuesday, with U.S. crude extending losses for a fifth straight day as the dollar rallied and on evidence that the United States and top oil exporter Saudi Arabia were pumping more than the world needed. North Sea Brent and U.S. crude settled down more than $2 a barrel each as the dollar hit two-week highs against the dollar index, making crude and other dollar-denominated commodities less affordable for holders of currencies such as the euro. Brent fell $2.25 to $64.02 a barrel while the front-month contract for U.S. crude settled down $2.17 at $57.26. (Reuters)

Gold Snaps Five-Day Rally on Dollar Gains, Higher Shares. Gold's five-day rally ran out of steam on Tuesday as the dollar extended gains on strong U.S. data, while global shares rose on the European Central Bank's suggestion it may speed up bond buying. Firm U.S. 10-year bond yields and uncertainty ahead of the Wednesday release of the minutes from the latest Federal Reserve policy meeting also weighed on sentiment towards gold. Spot gold was down 1.5% at $1,207.30 an ounce by 1839 GMT. It reached a three-month high of $1,232.20 on Monday. Silver dropped 3.4% to $17.07 an ounce. Platinum fell 2.1% to $1,145.41 an ounce and palladium was down 1.7% at $772.44 an ounce. (Reuters)