Global

Global Factory Growth Picks Up but Stays Weak. Global manufacturing growth accelerated slightly last month but remained weak as firms again turned to existing orders to keep active, a business survey showed on Monday. JPMorgan's Global Manufacturing Purchasing Managers' Index, produced with Markit, nudged up to 51.2 in May from April's near two-year low of 51.0. May was the 30th month the index has been above the 50 level that separates growth from contraction, but some of that activity was again driven by running down old orders. (Reuters)

Malaysia

Approved Investments Rises to RM57.4 Billion in Q1. Malaysia's approved investments for the primary, services and manufacturing sectors rose by 18.8% to RM57.4 billion in 1Q15, from RM48.3 billion in 1Q14.International Trade and Industry Minister Datuk Seri Mustapa Mohamad said the manufacturing sector was the major contributor, accounting for 58.5 per cent of the total or an equivalent of RM33.6 billion, followed by services (38.9% or RM22.3 billion) and primary (2.6% or RM1.5 billion). Mustapa said the bulk of investments came from domestic sources, which contributed RM47.4 billion or 82.6%, and the rest by foreign investors. He said Q1 performance was considered "unusual", as petroleum products accounting for a big chunk of the total investments in the manufacturing sector did not reflect the normal trend. "There was a big increase, especially from the Petronas' Refinery and Petrochemicals Integrated Development Project," he said. (Bernama)

Post-GST Pullback Slows Money Supply, Loan Growth. Money supply growth slowed in April as the use of money and credit was affected by the implementation of the Goods and Services Tax (GST) from April 1. All three main measures of money supply saw a slower pace of expansion during the month, consistent with market expectations. Broad money or M3, along with M2 and M1 moderated to 6.5%, 7.0% and 8.1% on YoY basis respectively System-wide loan growth edged lower to 8.8% YoY in April from 9.2% in March but was flat compared to the previous month. (See Economic Viewpoint for further comments)

Asia

China HSBC PMI at 49.2 in May. Activity in China vast factory sector shrank for a third consecutive month in May as export orders contracted at the sharpest rate in nearly two years, a private survey showed on Monday, suggesting China remains locked in an economic cooldown. The final HSBC/Markit Purchasing Managers' Index (PMI) stood at 49.2 in May, below the 50-point level that separates an expansion from a contraction in activity on a monthly basis. That is little changed from a preliminary reading of 49.1, and up a touch from April's 48.9. In a sign that China's sputtering economy could face bigger headwinds in the short-term, a sub-index for new exports skidded to 46.7, a low unseen since June 2013, and well below April's 50.3. Factory output also shrank for the first time this year as the sub-index slipped under 50. (Reuters)

Japan May Final Manufacturing Back in Expansion after Rocky April. Japanese manufacturing activity expanded in May for the first time in two months as domestic orders and output rose. The Markit/JMMA final Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 50.9 in May, unchanged from the preliminary reading but higher than a final 49.9 in April. The index returned above the 50 threshold that separates contraction from expansion for the first time in two months. New orders rose to 50.9, versus a flash estimate of 51.2 and a final 48.8 in April. The output index rose to 51.9, slightly more than the flash estimate of 51.7 and 49.3 in April. The index for new export orders was 50.6, slightly above a preliminary 51.2 and a final 50.3 in the previous month. (Reuters)

South Korea Inflation Speeds Up for First Time in 7 Months. South Korea's annual inflation in May accelerated for the first time in seven months, but still-low price pressures give the central bank enough headroom to cut interest rates again to jump-start a tottering economy. The consumer price index rose 0.5% in May from a year earlier, Statistics Korea data showed on Tuesday, up from a 0.4% increase in April. It was the first pick up in annual terms since October 2014 and the fastest since February this year. The result matched a median 0.5% rise tipped in a survey. (Reuters)

Indonesia Inflation Rate Picks Up to 7.15% in May. Annual inflation in Indonesia picked up to 7.15% in May due to higher prices for food, beverages and tobacco, the statistics bureau said on Monday. A poll of analysts had expected the inflation rate to accelerate to 7.00% from 6.79% in April. The consumer price index increased 0.50% in May compared to a month earlier, the data showed. Annual core inflation, which excludes administered price and volatile food prices, was steady at 5.04%, the same rate as in April. (Reuters)

USA

Manufacturing Growth Accelerates for 1st Time in 6 Months. U.S. manufacturing growth accelerated in May for the first time in six months, propelled by more new orders and an increase in hiring. The Institute for Supply Management, a trade group of purchasing managers, said Monday that its manufacturing index rose to 52.8 last month from 51.5 in April. That's the highest reading since February. Any reading above 50 signals expansion. A measure of new orders rose to the highest level since December and order backlogs also jumped, the ISM said. A gauge of production fell, though remained above 50. The increase in orders points to greater production in the months ahead. And a measure of employment jumped to 51.7, after falling below 50 in April. (AP)

Consumer Spending Flat in April as Income, Savings Rise. U.S. consumers held back from spending more in April, deciding instead to channel income gains into savings. Consumer spending was flat in April, the weakest performance in three months, after a revised 0.5% increase in March, the Commerce Department reported Monday. The unchanged reading for consumer spending in April had been expected given weakness previously reported in retail sales and auto sales for the month. Economists, however, forecast that spending will rebound in coming months. With income growing and spending flat, the personal saving rate jumped to 5.6% of after-tax incomesthe second highest level since December 2012. (AP)

Construction Jumped 2.2% in April. U.S. construction spending climbed in April to the highest level in more than six years, fueled by healthy gains in housing, government spending and non-residential construction. Construction spending advanced 2.2% in April to a seasonally adjusted annual rate of $1 trillion, the highest level since November 2008, the Commerce Department said Monday. Spending had risen a more modest 0.5% in March. The gain included a 0.6% rise in residential construction and a 3.1% jump in non-residential activity such as office buildings, hotels and shopping centers. Government projects increased 3.3%, reflecting the biggest jump in spending on state and local projects in three years. (AP)

Europe

Spain, Italy Manufacturing Strengthen as Weak Euro Lifts Orders. Manufacturing in Spain and Italy grew more than economists forecast this month as the weaker euro helped to boost export competitiveness. Markit Economics said its Purchasing Managers Index for Italy, the euro area’s third-largest economy, rose to 54.8 from 53.8 in April, the highest since 2011, while the Spanish measure jumped to 55.8 from 54.2. Export competitiveness has its downside: Markit’s report showed input costs at factories across the region are rising by the most in three years, while selling prices are stagnating, squeezing companies’ margins. Markit’s factory PMI for the entire 19-nation euro region rose to 52.2 in May from 52 in April, it said. While that’s above the key 50 mark that divides expansion from contraction, it’s below the initially reported reading of 52.3. In Germany, the index fell more than initially reported, dropping to 51.1 from 52.1. (Bloomberg)

Currencies

Dollar Hits 12.5-Year Peak against Yen on U.S. Data. The U.S. dollar rose on Monday, hitting a 12.5-year peak against the yen after the release of stronger-than-expected data on U.S. manufacturing and construction spending, while renewed worries over a Greek default contributed to the euro's weakness. The latest data fueled the greenback's rise to 124.920 yen, its highest since December 2002. The data underscored the divergence between the Fed's path toward tighter monetary policy and the Bank of Japan's ultra-loose policies. The euro last traded down 0.54% against the greenback at $1.0931, retreating from Friday's one-week high of $1.1006. The dollar was last up 0.51% against the yen at 124.800 yen. The dollar was last up 0.56% against the Swiss franc at 0.94565 franc. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.53% at 97.416. (Reuters)

Commodities

Oil Drops on High OPEC Output. Oil settled down as much as 1% on Monday, retreating from Friday's sharp rally on a strong dollar and concern over stubbornly high supplies as OPEC was expected to stick with robust production at its meeting this week. The Organization of the Petroleum Exporting Countries pumped a 2.5-year high of 31.22 million barrels of oil per day (bpd) in May, a monthly survey showed. Brent crude oil futures, settled down 68 cents, or 1%, at $64.88 a barrel. U.S. crude fell just a dime, settling at $60.20 a barrel, after falling more than 1% with Brent earlier. (Reuters)

Gold Steadies as Dollar Rallies after U.S. Data. Gold was little changed on Monday, giving up gains as the dollar rallied after the precious metal was initially buoyed by an unexpected stall in U.S. consumer spending and comments on interest rates from a Federal Reserve's official. Spot gold rose to a session high of $1,204.31 an ounce and was down 0.04% at $1,189.30 an ounce by GMT. It posted a second consecutive weekly fall last week, hitting a three-week low of $1,180.50 on Thursday. Silver fell 0.1% to $16.68 an ounce. Platinum fell 0.3% to $1,104.28 ounce, while palladium was down 0.2% at $772.78 an ounce. (Reuters)