Malaysia

Industrial Production in April Posts Smallest Gain in 9 Months. Industrial production fell in April from a post-Lunar New Year rebound in March with the YoY change in the Industrial Production Index (IPI) at 4.0%, lower than the consensus and house estimates of 4.5% and 4.8% respectively. The manufacturing sector performed better-than-expected, expanding 4.1% YoY, against our estimate of 3.6%. The large Electrical and Electronics Products category grew 4.0% YoY with the Food, Beverages and Tobacco manufacturing category the best performer at 5.5% YoY. Mining output posted a rare ninth consecutive month of YoY growth. (See Economic Viewpoint for more)

Companies with GST Registration Now Total 380,313. Some 380,313 companies and business entities have registered for the Goods and Services Tax (GST) under the GST Act as of yesterday, said Deputy Finance Minister Datuk Ahmad Maslan. He said the number exceeded the target set by the government, which was for only 240,000 registrations. "We find the readiness to register for GST is higher among the big companies, compared with the small and medium companies. As of yesterday, the collection of GST on imports totalled RM3.37 billion, while the domestic net collection is RM2.95 billion, he added. (Bernama)

Asia-Pacific

China Industrial Output Gains in Sign Economy May Stabilize. China’s industrial production gained momentum in May while growth in retail sales kept pace with the previous month, showing signs of stabilization in the world’s second-biggest economy. Industrial output rose 6.1 last month from a year earlier, the statistics bureau said Thursday, accelerating from 5.9% in April and beating the median estimate of 6.0% in a survey. Retail sales added 10.1% in May, while fixed-asset investment excluding rural households climbed 11.4% in the first five months.

Bank of Korea Cuts Interest Rate to 1.5%. The Bank of Korea on Thursday cut its benchmark interest rate a quarter of a percentage point to a record low. The cut, the central bank’s fourth since August of last year and the second this year, comes amid concerns that an outbreak of Middle East Respiratory Syndrome could knock billions of dollars off economic output. South Korea’s economic growth outlook has already been revised lower recently because of faltering exports. The central bank in April cut its growth forecast for this year to 3.1% from 3.4%.The rate cut comes despite concerns among policy makers that cutting borrowing costs could exacerbate the country’s already high levels of household debt. (WSJ)

China May Investment up 11.4%. China's fixed-asset investment grew at its slowest rate in nearly 15 years in May, missing expectations even as growth in retail sales and factory output steadied, arguing for Beijing to increase policy support to avert a deeper downturn. Fixed-asset investment, a crucial driver of the world's second-largest economy, rose 11.4% in the first five months of this year from the year-earlier period, missing a Reuters poll forecast for a 12% gain, the same as in April. Some analysts said China's housing cooldown had crimped new investment as falling home prices dampened the mood of consumers, leading them to tighten their belts. (Reuters)

China's May Bank Loans, Money Supply Quicken on Policy Easing. China's banks made 900.8 billion yuan ($145.15 billion) worth of new loans in May, in line with market expectations, while broad money supply growth quickened as the central bank loosened policy to support the slowing economy. The central bank has cut interest rates three times since November, on top of cuts in banks' reserve requirements, but a flurry of data released on Thursday showed few other signs of improvement, arguing for more policy easing. Economists had expected new local-currency loans of 900 billion yuan in May, compared with 707.9 trillion yuan in April. (Reuters)

Australian Unemployment Fall Surprises. Australia reported an unexpected drop in its unemployment rate to a one-year low in May. The number of people employed rose by 42,000, almost triple the gain that economists had forecast. The statistics agency has in the past cited challenges in compiling the monthly report, and a half-point drop in the jobless rate in Western Australia conflicts with other evidence that the mining-dependent state is being walloped by a slump in resources investment. (Bloomberg)

USA

Retail Sales Jump in a Sign of More Confident Consumers. Americans stepped up their spending at retailers in May, especially for autos, clothes and building materials, in a sign that strong job growth has begun to boost store sales. Retail sales rose a seasonally adjusted 1.2% after a 0.2% gain in April, the Commerce Department said Thursday. Over the past 12 months, sales have risen a solid 2.7%. Excluding the volatile categories of autos, gas, building materials and restaurants, so-called core retail sales, which factor into the government's official measure of economic growth, rose a solid 0.7% in May. (AP)

Applications for Jobless Aid Remain Low at 279,000. The number of Americans seeking unemployment benefits rose slightly last week, yet remained at a historically low level that points to a healthy job market. The Labor Department said Thursday that weekly applications for jobless aid increased 2,000 to a seasonally adjusted 279,000. The four-week average, a less volatile measure, rose 3,750 to 278,750. Even with the increases, both figures remain at very low levels. The average fell to a 15-year low last month. (AP)

Businesses Boost Stockpiles 0.4% in April. U.S. businesses increased their stockpiles in April by the largest amount in nearly a year while their sales posted a second straight healthy advance. Inventories held by businesses rose 0.4% in April compared to March when stockpiles had risen a much smaller 0.1%, the Commerce Department reported Thursday. It was the largest increase since a 0.5% rise in May 2014. Total business sales rose 0.6% in April following a similar 0.6% rise in March. (AP)

Europe

Greece’s Bailout Creditors Signal Negotiations over Aid at an End. Greece’s creditors on Thursday issued their starkest warnings to Athens since the start of a five-month stand-off over the country’s soon-to-expire €172bn bailout, with the International Monetary Fund withdrawing its negotiating team and European leaders saying the time for compromise had ended. The pointed language in public reflected growing private fears that Alexis Tsipras, the Greek prime minister, had overestimated the amount of time he has left to cut a deal to release the bailout’s final €7.2bn aid tranche for his cash-strapped government. (FT)

Currencies

Dollar Rises as U.S. Retail Sales Perk Up, Yen Retreats. The dollar gained on Thursday, buoyed by a surge in U.S. retail sales in May that could push Federal Reserve policymakers toward raising U.S. interest rates as early as September. The dollar, which had traded weakly over the previous three days, was up as much as 1.1% against the yen after posting on Wednesday its biggest single-day drop in six months versus the Japanese currency. The dollar last traded at 123.41 yen, up 0.6% on the day, and it was ahead 0.60% against the euro to $1.1260. The dollar index was up 0.4%. The dollar was also helped by a selloff in the New Zealand dollar, which slumped to a five-year low against the greenback after the Reserve Bank of New Zealand cut rates and suggested more easing may follow.

Commodities

Oil Slips, Rally Cut Short by Dollar and Greek Worry. Crude oil prices fell on Thursday as players took profits from the past two days of gains, turning bearish after the dollar's rise against the euro on Greek debt worries weighed on demand for commodities. A positive outlook for oil from the International Energy Agency (IEA) was offset by the dollar's first rally in five days against a basket of currencies. Brent settled down 59 cents, or about 1%, at $65.11 a barrel, after plumbing an intraday low at $64.50. U.S. crude settled down 66 cents, or 1%, at $60.77, after a session low at $60.21. (Reuters)

Singapore's Weekly Fuel Oil Imports Hit Highest since October 2013. Weekly imports of residual fuel into Singapore in the week to June 10 nearly tripled, led by a jump in shipments from Russia, data from IE Singapore showed on Thursday. Fuel oil imports rose 180% week-on-week to 2.33 million tonnes. Russian exports to Singapore were at 840,000 tonnes. Venezuela, Saudi Arabia, India and Colombia also ramped up exports to the city-state, the world's largest trading hub of the heavy distillate. (Reuters)

Gold Snaps Three-Day Rally as Dollar Extends Gains. Gold prices fell on Thursday, snapping three days of gains, as global stock markets and the dollar rose after strong U.S. economic data, feeding expectations that the Federal Reserve will raise interest rates in 2015. Spot gold was down 0.4% at $1,181.30 an ounce at 1827 GMT. The metal has held largely in a $50 range around $1,200 since mid-March. Silver was up 0.2% at $16 an ounce, while platinum fell 0.7% to $1,102.25 an ounce and palladium was up 0.1% at $742.75 an ounce. Palladium earlier touched its lowest since April 1 at $736.00 an ounce. (Reuters)