Malaysia

Both Global and Domestic Developments Affect Ringgit's Movement. Bank Negara Malaysia today reiterated that the Ringgit's current movements are affected by both global and domestic developments. The central bank said it remained focused on its role and mandate in maintaining monetary and financial stability and to support sustainable economic growth. "BNM has never been and will not be drawn into any political agenda but will remain accountable for delivering its mandates to the people of this country," it said in a statement released today. It said global developments affecting the Ringgit's movements would include the investor expectations relating to monetary policies of major central banks and the trends in crude oil and gas prices. Domestic factors would include concerns about government-linked entities and ratings-related issues. (Bernama)

ASEAN Can Prosper Without EU Model. Regional trade block, Asean, can prosper without having to form an "EU type" economic union, says Minister of International Trade and Industry Datuk Seri Mustapa Mohamed. He said economic integration in ASEAN would continue to be based on pragmatic and economic realities, taking into account the different levels of economic development of member economies. "There is a need for political will to balance nationalism against the common good of the region," Mustapa said at the two-day Malaysian Banking Summit here Thursday. (Bernama)

Asia

China's Outbound Investment Jumps, Catching Up with FDI. China's outbound direct investment soared in the first five months to 278.4 billion yuan ($44.84 billion), official data showed, closing a gap with foreign direct investment inflows as local firms flock overseas for growth opportunities. The 47.4% jump in outbound investment, made by non-financial firms, built on the 36.1% rise in the first four months. The government has been encouraging firms to invest abroad to slow down the rapid build-up of foreign exchange reserves and help local firms become more competitive internationally. (Reuters)

China Nationwide Home Prices Rise in May for First Time in 13 Months. New home prices in China rebounded nationwide for the first time in 13 months in May, suggesting a property downturn is bottoming out after a barrage of stimulus from the central bank and local governments since late last year. Average new home prices in China's 70 major cities climbed 0.2% in May from April, the first rise since May 2014, according to calculations based on official data released on Thursday. (Reuters)

Bank Indonesia Keeps Benchmark Interest Rate at 7.5%. The Bank Indonesia Board of Governors decided on Thursday to hold interest rates steady. The decision was in line with the effort to keep inflation on the target of 3% to 5% in 2015 and 2016, as well as directing the current account deficit to a healthier level in the range of 2.5% to 3% of GDP in the medium term. Bank Indonesia said its policy mix remains focused on maintaining macroeconomic stability amid continued global economic uncertainty. (Reuters)

USA

U.S. Consumer Prices Post Largest Gain in over Two Years. The Labor Department said on Thursday its Consumer Price Index rose 0.4% last month after gaining 0.1% in April. That was the largest increase since February 2013, and left the CPI unchanged in the 12 months through May after a 0.2% yearly decline in April. Economists had forecast the CPI rising 0.5% from April and unchanged from a year ago. While energy prices are stabilizing, a strong dollar is curbing underlying inflation pressures. The so-called core CPI, which strips out food and energy costs, increased 0.1%, the smallest rise since December. (Reuters)

Current Account Trade Deficit Widens to $113.3 Billion. The deficit in the broadest measure of U.S. trade increased in the January-March quarter to the highest level since the spring of 2012 as American exports declined. The Commerce Department said Thursday that the deficit in the current account increased to $113.3 billion in the first quarter, up 9.9% from a fourth quarter. The trade deficit increased as exports of goods fell to $382.7 billion from $409.1 billion. Part of that decline reflected falling oil prices. But American exporters have also been hurt by a stronger dollar. (AP)

Fed Says Changes in Bank Reserve Rate to Apply Immediately. Any changes to the rate that the Federal Reserve pays to banks on excess reserves will take effect immediately upon approval, rather than at the end of a two-week maintenance period, the central bank announced on Thursday. The change is being made to improve the ability of the Fed to use the payments made to banks on excess reserves as a tool for raising its target interest rate. By paying more, the Fed would encourage banks to hold more reserves, pulling money from the financial system and raising short term rates overall. (Reuters)

Gauge of U.S. Economy Posts Solid 0.7% May Advance. An index designed to predict the future health of the economy posted a second straight strong increase in May, indicating the economy should gain strength in the second half of this year. The Conference Board said Thursday that its index of leading indicators rose 0.7% in May, matching the gain in April. Both months represented the strongest increase since a 1% rise last July. (AP)

Philly Fed Factory Activity Expands at Fast Pace in June. Factory activity in the U.S. mid-Atlantic region expanded in June at a much faster pace than expected. The Philadelphia Federal Reserve Bank said its business activity index jumped to 15.2 from 6.7 the month before. The index came in at its highest level since December 2014, and was nearly double the analyst expectation for a reading of 8.0. (Reuters)

Europe

IMF Praises Eurozone Policy but Warns on Future. The International Monetary Fund said on Thursday the eurozone is in the midst of a recovery, boosted by a weaker currency, low oil prices, and the central bank's loose monetary policy. Even risks from Greece and its possible exit from the currency bloc "appear manageable," at least in the short term, the IMF said in its yearly check-up on the eurozone's health. But the global lender said many of the factors supporting European growth could evaporate in the future without deeper reforms and integration in the bloc. "Potential growth, estimated at around 1% on average over the medium term, is well below what is needed to reduce unemployment to acceptable levels in many countries," the IMF said. (Reuters)

No Let-Up for Russian Economic Slump, May Data Shows. Russia's economy showed little sign of improvement in May, as a range of economic indicators on Thursday showed low oil prices and the impact of Western sanctions outweighing successive cuts in central bank interest rates aimed at spurring growth. Retail sales were down 9.2% compared with a year earlier, only slightly less than last month's fall of 9.6%. Capital investment plummeted by 7.6%, worse than a 4.8% decline in April. Earlier in the week, data showed industrial output plunged by a worse-than-expected 5.5% in May. (Reuters)

Eurozone Sets Emergency Summit on Greece. Euro zone leaders will hold an emergency summit on Monday to try to avert a Greek default after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors remain deadlocked over a debt deal. Finance ministers of the 19-nation currency bloc failed to make any breakthrough on a cash-for-reforms agreement at talks in Luxembourg on Thursday, just 12 days before Greece must make a crucial debt repayment to the International Monetary Fund. The European Central Bank told the meeting it was not clear whether Greek banks would be open on Monday, officials said. (Reuters)

Currencies

Dollar Droops as Fed Refrains from Clearer Rate Liftoff. The dollar index shed 0.6% to hit a one-month low of 93.722 on Thursday after the Federal Reserve disappointed investors who had hoped for a clearer signal on when the U.S. central bank will lift interest rates. The dollar fell 0.5% to 122.72 yen, down from Wednesday's high of 124.465. The dollar's weakness pushed up the euro despite the risk of a debt default by Greece, which is still unable to strike an agreement with its creditors on a deal to unlock fresh funds. The euro rose 0.5% to a one-month high of $1.1411. In the European session, the Swiss franc inched up after the Swiss National Bank kept interest rates unchanged at -0.75% and slightly tweaked its inflation forecasts. It added that the franc was significantly overvalued and should continue to weaken over time. (Reuters)

Commodities

Oil Up Third Day on Dollar Slump. Oil prices settled up for a third straight day on Thursday, boosted by a slipping dollar and reports that data showed a draw in crude this week at Cushing, Oklahoma, the delivery point for U.S. crude futures. Market intelligence firm Genscape reported a draw of about 870,000 barrels of crude at Cushing in the week to Tuesday. Brent crude settled up 39 cents at $64.26 a barrel, off 70 cents from the day's high. U.S. crude futures closed up 53 cents at $60.45. (Reuters)

Gold Rallies above $1,200 an Ounce. Gold rose above $1,200 an ounce on Thursday, its biggest increase in almost a month, as the U.S. dollar slid the day after the Federal Reserve indicated that interest rates may rise more slowly than many had expected. An early rally across precious metals sent silver to its highest in two weeks, although buying in platinum and palladium ran out of steam by late afternoon. Spot gold was up 1.4% at $1,202.50 an ounce at 4:30 p.m. EDT. Silver was up 0.41% at $16.23 an ounce, platinum was down 0.05% at $1,088.50 an ounce and palladium was down 0.5% at $724.5 an ounce. Gold extended its historically unusual premium over platinum to $114 an ounce. (Reuters)