Malaysia

GST Collections of RM6 Billion an Indicative Sum. The RM6 billion in Goods and Services Tax (GST) collections announced recently includes import GST and thus cannot be seen as the government's revenue, according to the Ministry of Finance. "It is actually part and parcel of input tax that may be claimed in June or July," Deputy Minister Chua Tee Yong said. It is thus too early to give an exact estimation of how much has been collected, he told reporters at a programme for GST customers here today. It was announced in Parliament recently that the government had collected a total of RM6 billion in GST as of June 10. "An accurate or more reflective sum would be in August, as 70% of the filings (of GST returns by business owners) is done in July," he said. (Bernama)

Asia

Japan May Exports Rise 2.4% on Year. Japanese exports rose 2.4% in May from a year earlier, up for the ninth straight month, Ministry of Finance data showed on Wednesday, underscoring a gradual recovery in external demand. The rise compared with a 3.5% increase expected by economists. It followed an 8.0% gain in the prior month. Imports fell 8.7% in the year to May, versus economists' median estimate of a 7.5% decline. That brought the trade balance to a deficit of 216.0 billion yen ($1.75 billion), compared with a 226.0 billion yen deficit expected by economists. (Reuters)

Stimulus Budget for MERS-Hit South Korea Expected at up to $22 Billion. South Korea is likely to inject between 10 trillion won and 25 trillion Korean won ($8.95 billion - $22.36 billion) into its economy through a supplementary budget to offset the impact of Middle East Respiratory Syndrome (MERS), analysts predicted. Kwon Young Sun, an economist at Nomura Group, said in a note that he expects a 10 trillion won supplementary budget by the end of June, equivalent to 0.6% of last year's GDP, which he said would offset lost growth from the MERS outbreak. Economists at ANZ on Tuesday forecast a supplementary budget of 20 trillion won to 25 trillion won. Nineteen people have died from MERS and 154 have been infected with the virus in South Korea. (Reuters)

Japan to Raise Reconstruction Spending by $52.6 Billion. Japan will increase spending on reconstruction from the 2011 earthquake by 6.5 trillion yen ($52.6 billion) in the five-year period starting from next fiscal year, a government source said on Tuesday. Prime Minister Shinzo Abe's government will fund 3.2 trillion yen of this increase by shifting money from the national budget to a special account for reconstruction work and selling some state-owned assets. The remaining 3.3 trillion yen will be funded by using money left over from a reconstruction budget that ends this fiscal year. (Reuters)

China to Let Private Investment Funds Trade Interbank Debt Market. China will allow private investment funds to trade in the country's interbank debt market for the first time, a central bank document dated June 15 and obtained on Tuesday said. The People's Bank of China (PBOC) did not immediately respond to requests for comment. Managers of private investment funds who have net capital of more than 10 million yuan ($1.61 million) can apply for the license, the document showed. Once approved, they can trade fixed income products, including government and corporate bonds. (Reuters)

USA

US Homebuilding Drops in May, but Pace Stronger than in 2014. U.S. builders broke ground on fewer homes in May, but the pace of construction remains significantly higher than a year ago as the real estate sector increasingly reflects the stronger job market. The Commerce Department said Tuesday that housing starts last month fell 11.1% to a seasonally adjusted annual rate of 1.04 million homes. Economists say that starts increased so sharply in April - surging 22% to an annual rate of 1.17 million - that some giveback was inevitable in May. (AP)

Europe

Inflation Returns to UK as Airline Tickets and Petrol Prices Rise. Britain’s brief flirtation with negative inflation ended last month, with official figures showing that prices rose again in May helped by higher air fares and petrol prices. The Office for National Statistics said its consumer price index measure of inflation was up 0.1% on last year after a 0.1% dip in April – the first negative inflation for more than 50 years. The ONS said the main upward pressures on inflation last month came from air fares. There was also upward pressure on inflation last month from higher fuel prices. (The Guardian)

Inflation Picks Up in Germany. German consumer prices rose at their fastest rate in seven months in May, a sign that the European Central Bank's bond purchase program may be starting to have its desired effect. Consumer prices measured according to common European standards increased 0.1% on the month and 0.7% on the year, the federal statistics office said Tuesday, confirming preliminary estimates. That was the largest annual increase since October 2014. (MarketWatch)

German Investor Morale Sours in June. The mood among analysts and investors in Europe's largest economy took a sharply pessimistic turn in June, with a sentiment indicator dropping to a seven-month low as the Greek crisis and subdued global growth frayed nerves. Mannheim-based think tank ZEW said on Tuesday its monthly survey of German economic sentiment fell to 31.5 points from 41.9 in May, undershooting a Reuters consensus forecast of 37.1. (Reuters)

Greek Leader, Top EU Executive Clash over Austerity Claims. Greece's leader and a top EU official ignited a war of words on Tuesday, a rare public spat that highlights how tense the talks have become over how to save the country from financial disaster. Prime Minister Alexis Tsipras told lawmakers from his left-wing Syriza party that creditors were demanding sweeping pension cuts and tax hikes on medicine and electricity bills. But Jean-Claude Juncker, the president of the EU's executive Commission, swiftly hit back, replied that he had been misrepresented. "I am blaming the Greeks for telling things to the public, things which are not consistent with what I told the Greek prime minister," he said in Brussels. (AP)

Currencies

Dollar Up on Greece Worries, U.S. Housing Permits Jump. The dollar rose against the euro on Tuesday, as worries Greece was tilting towards debt default dragged on the euro and U.S. housing data encouraged speculation that the Federal Reserve will soon raise interest rates. The euro was off 0.40% against the dollar. Other major currencies were little changed against the dollar, as Fed policymakers started a two-day meeting and ahead of a news conference and economic outlook statement due on Wednesday. The euro was last at $1.1240. It hit a session low of $1.1205 immediately after the Commerce Department said U.S. housing permits for future construction surged to a near eight-year high. The dollar index was last up 0.20%, and the dollar was little changed against the yen at 123.40 after trading higher in Asia. (Reuters)

No Plans to Peg Ringgit Malaysia. The government has no plans to peg the Ringgit like it did during the 1997-1998 Asian financial crisis, says the Finance Ministry. In a written reply to Lim Guan Eng (DAP-Bagan), the ministry said there are no plans to do so as the current scenario faced by the country today is different from the past. "The government's role, through Bank Negara Malaysia, is to ensure that the Ringgit exchange market is stable and to avoid fluctuations in the exchange rate. (The Sun)

Commodities

U.S. Crude Oil Up as Tropical Storm Goes Ashore in Texas. U.S. crude prices rose on Tuesday as a tropical storm moved ashore in the oil-producing state of Texas, but global oversupply limited gains and pressured Brent futures. Expectations that U.S. crude inventories fell again last week and strong RBOB gasoline futures also lent support. U.S. crude for July delivery rose 45 cents to settle at $59.97 a barrel, having swung from $59.42 to $60.37. Brent front-month August crude fell 25 cents to settle at $63.70, off its $64.41 intraday peak and below Brent's 50-day moving average of $64.01. (Reuters)

Gold Dented by Firm Dollar Ahead of Fed Statement. Gold slipped on Tuesday as the dollar firmed as the U.S. Federal Reserve policy meeting got underway, while a looming Greek crisis failed to trigger sustained demand for safe-haven assets. Spot gold fell 0.4% to $1,181.45 an ounce by 1959 GMT. In other metals, silver was down 0.5% at $16.01 an ounce, while palladium lost 0.7% to $732.35. Platinum fell 1.1% to $1,074.50, within sight of a six-year low of $1,072.50 hit on Monday. (Reuters)