Malaysia

Lower Fuel Costs to Keep Electricity Tariff Depressed. Moody's Investors Service expects lower fuel costs to keep Malaysia's electricity tariff depressed over the next 12 to 18 months, given the weaker outlook for thermal coal and crude oil prices. In a statement Tuesday, Moody's said the increased use of coal-based capacities and cheaper coal imports, which had replaced the expensive liquefied natural gas (LNG), had reduced generation costs. "In response, the Malaysian regulator has announced an adjustment to lower electricity tariffs in February 2015, through the application of its imbalance cost pass-through (ICPT) mechanism, it said. Moody's associate analyst, George Teng, said coal will become the main source of fuel in Peninsular Malaysia by 2017. (Bernama)

Weaker Ringgit Will Boost Exports, Investments. A weaker ringgit will benefit Malaysia in terms of boosting exports and foreign investments but imports will be expensive, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said Tuesday. "However, this situation won't be long," he told reporters when asked on the ringgit depreciation which touched a nine-year low against the US dollar yesterday. As the Malaysian economic fundamentals remain strong, the local currency would continue to strengthen, he said after attending a meeting with the National Associations and Chambers of Commerce here. (Bernama)

Asia

China Deflation Risks Linger. China’s consumer prices rose at a slower pace in May and factory-gate deflation extended a record stretch of declines, underscoring tepid demand at home and abroad. The consumer-price index increased 1.2% last month from a year earlier, according to China’s National Bureau of Statistics. That compared with the 1.3% median estimate and the 1.5% increase in April. The producer-price index fell 4.6%, extending declines of more than three years. Food inflation was 1.6%, while non-food prices rose 1% from a year earlier. Producer price declines in mining and raw materials were narrower last month. (Bloomberg)

Japan April Core Machinery Orders Up 3.8%. Japan's core machinery orders unexpectedly rose 3.8% in April from the previous month, the Cabinet Office said on Wednesday, in a sign that capital expenditure is gaining strength. The rise in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with the median estimate of a 2.0% decrease in a poll of economists. That followed a 2.9% increase in the previous month. Compared with a year earlier, core orders rose 3.0%, versus the median estimate for a 1.3% annual decline. (Reuters)

Economic Growth Halved Hunger in Asia over 25 Years. Economic growth helped the Asia-Pacific region to halve the proportion of those who have too little to eat to 12% of its population over the past 25 years, meeting one of the U.N. Millennium Development Goals. The target, one of eight international development goals agreed upon by world leaders in 2000, was to halve the proportion of hungry people around the world by 2015 from 1990 levels Reductions in hunger vary within the region, with South Asia failing to meet the target, reducing undernourishment by 34.4%. Southeast and East Asia have been the most successful parts of the region at reducing hunger, by 68.5% and 58.5% respectively (Reuters)

USA

Number of Job Openings Jumped to a 15-Year High in April. U.S. employers advertised the most open jobs in April than at any time in the 15 years that the government has tracked the data. The Labor Department said Tuesday that the number of open jobs at the end of April jumped 5.2% to 5.4 million. The figure suggests that employers anticipate stronger customer demand in the months ahead. The job market has remained healthy even as the economy faltered at the start of 2015. The steady hiring shows that businesses see the economic slump as having resulted mainly from temporary factors such as a harsh winter. (AP)

Small Business Confidence Rises to Five-Month High. U.S. small business confidence increased to a five-month high in May with owners expecting a solid improvement in profits, which bodes well for the economy's prospects in the months ahead. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index rose 1.4 points to 98.3, the highest reading since December. About 616 businesses took part in the survey. Eight of the index's 10 components rose last month. Sales expectations, which fell in April, declined again. (Reuters)

40% Chance That Fed Will Delay Liftoff After September. Economists see almost a 40% chance that the Federal Reserve will delay an interest-rate increase beyond September if jobs gains stumble or inflation fails to move higher, according to a Bloomberg News survey. Economists surveyed June 5-9 put the probability of a September increase in the benchmark federal funds rate at 50%, according to the median estimate. The odds were nine% for October, 20% for December and 10% for some time in 2016. (Bloomberg)

Europe

Greece Makes New Proposals to End Bailout Impasse. New Greek proposals aimed at ending a long standoff with international bailout creditors and unlocking vital rescue funds were received with little visible enthusiasm in Brussels on Tuesday. Greece has just three weeks to conclude a deal before its finances implode, and a key negotiator complained that officials at the European Union's executive Commission have yet to respond to the documents presented late Monday. A government official said the proposals included alternative ideas on budget measures required for creditors to approve the bailout payment, and for "a workable plan" to render Greece's crushing debt load viable. (AP)

ECB Paper Finds that Weaker Currency Does Not Boost Exports. The time taken for business to ramp up production when a currency falls means that the cheaper currency does not significantly translate into higher exports, two European Central Bank economists have found. When a currency rises, however, the impact is much stronger. research carried out by ECB economists and based on 10 European Union countries between 2001 and 2012 suggested the link between a falling currency and rising exports is not significant. The paper's findings, published on Tuesday, gel with data showing that, despite the euro fall, euro zone exports growth slowed in the first quarter while imports accelerated.

Currencies

Dollar Edges Up, Traders Eye U.S. Retail Report. The dollar inched ahead on Tuesday, eroding its previous session's loss, helped by a rise in U.S. bond yields and expectations that a Federal Reserve interest rate hike may come as early as September. The euro, which rose 1.5% against the dollar on Monday, was off 0.20% at $1.1271. The dollar also was up against sterling and the Swiss franc and was down against the yen. Trading was choppy, as investors awaited a U.S. retail sales report on Thursday that could reinforce optimism about the economy generated by last Friday's unexpectedly strong 280,000 increase in jobs during May. The dollar index was last off 0.10% at 95.175, well below the high of 96.909 scaled on Friday. (Reuters)

Commodities

Oil Up More Than 3% in Broad Rally. Prices for crude oil, gasoline and diesel jumped more than 3% on Tuesday, as bullish investors made bets across the oil complex for another weekly drop in U.S. stockpiles. A poll of five analysts forecast that U.S. crude inventories fell 1.7 million barrels last week, for a sixth straight week of declines. Industry group American Petroleum Institute (API) estimated a draw four times as much, at 6.7 million barrels. The U.S. government's Energy Information Administration (EIA) will issue official inventory data on Wednesday. Brent settled up $2.19, or 3.5%, at $64.88 a barrel. That was the largest advance on the day for Brent since May 29. U.S. crude settled up $2, or 3.4%, at $60.14 a barrel. (Reuters)

Gold Up but Range-Bound. Gold rose on Tuesday as European stock markets fell and commodities picked up across the board, but prices remained range-bound as investors awaited clearer signals on the timing of an expected U.S. interest rate hike. Spot gold was up 0.3% at $1,176.88 an ounce at 1927 GMT. Among other precious metals, silver was up 0.2% at $15.94 an ounce, while platinum rose 0.3% to $1,103.50 and palladium edged down 0.3% to $739.50. (Reuters)