Malaysia

Government Retains AP Policy for Used Cars. The government still retains the approved permit (AP) policy for the import of used cars, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. He said the abolishment of the policy is still being studied as it is a rather complex exercise. Meanwhile, Mustapa said the government had identified the export of vehicle components as a potential sector that could contribute to the growth of the country's automotive industry, instead of exporting vehicles. "As the Malaysian market is relatively mature, it is quite difficult for us to achieve a 10% growth. We feel that there is greater potential in exporting automotive components," he said. (Bernama)

Asia

Japan May Coincident Indicator Index Falls, Outlook Downgraded. Japan's government lowered its assessment of the economy in May after the coincident indicator index fell at the fastest pace in three months. Japan's economy is stagnating, the Cabinet Office said on Monday, which is a downgrade from its previous assessment that economic growth is improving. The index of coincident economic indicators fell a preliminary 1.8 points in May from the previous month, the Cabinet Office said. The decline was due mainly to a fall in shipments of durable goods such as cars and lower sales at wholesale traders, the data showed. (Reuters)

BOJ Keeps Rosy View of Regional Japan. The Bank of Japan on Monday maintained its upbeat assessment on regional sectors of the economy, saying they are recovering thanks to a pick-up in output and tightening job markets. In a quarterly review of regional activity, the BOJ raised its assessment for the northernmost Hokkaido region and left intact the views for the remaining eight areas, citing robust private consumption that is allowing more firms to raise prices. The Kinki region in western Japan, home to electronic giants like Panasonic Corp, saw exports continue to rise but output of machinery and cars weaken as inventory piled up, the report said. (Reuters)

Fitch Says Japan Fiscal Discipline Plan Unlikely to Lower Debt Burden. Japan's public debt burden is likely to remain high under a new fiscal framework approved last month as the government's structural reforms will not boost economic growth and tax revenue significantly, Fitch Ratings said on Monday. Japan's fiscal plan relies almost entirely on achieving high economic growth to increase tax revenue, but there is little room for the economy to accelerate as it is already near its potential growth rate, Fitch said in a statement. Fitch Ratings downgraded Japan's credit rating in April by one notch to A after the government failed to tighten fiscal spending to offset a delay in a sales tax increase. (Reuters)

China’s Economy Shows ''Positive Changes''Statistics Bureau. China's economy is showing some positive changes as recent government measures gradually gain traction, but policymakers cannot lower their guard against headwinds crimping growth, the National Bureau of Statistics said on Monday. China's economic performance remained within a "reasonable range" and economic growth was basically stable, Sheng Laiyun, the bureau's spokesman, said in remarks published on the bureau's website. "The improvement in main indicators is still initial and we cannot lower our guard against the downward pressure on the economy," Sheng said. (Reuters)

Zeroing in on Empty Homes, China Throws Developers a Lifeline. Dismayed by the millions of unsold homes in China's troubled real estate market, the Chinese government is taking matters into its own hands: by buying some properties and turning them into public housing. At the end of May, according to the National Bureau of Statistics, unsold residential floor space totalled 657 square kilometres - the most unsold space in at least two years, and covering an area nearly the size of Singapore. The policy being tested in at least six provinces looks like a win for all but comes with a caveat: government tween 10% and 52% add to a mountain of public debt and do little to discourage the next housing bubble. (Reuters)

Philippines Plans to Raise More than $700 million via Global Bonds. The Philippines is looking at raising 33.4 billion pesos ($740.3 million) pesos through the sale of global bonds in 2016 to help fund a proposed 15% increase in its national budget next year, a senior government official said on Monday. National Treasurer Roberto Tan said the government needs to borrow a total of 747.8 billion pesos next year to finance its 3 trillion peso spending plan, which assumes a budget deficit target of 2.0% of gross domestic product. (Reuters)

Indonesia Central Bank Governor Sees a June Trade Surplus. Indonesia will likely report a trade surplus in June, the central bank governor said on Monday. "I haven't gotten the latest estimation. But generally, the trade balance will be in surplus," Agus Martowardojo told reporters when asked about June trade data. The statistics bureau will release June trade data on July 15. Southeast Asia's largest economy had a trade surplus of $950 million in May, its sixth straight monthly surplus. (Reuters)

USA

Growth in U.S. Services Firms Rises in June. U.S. service firms grew at a slightly faster pace in June, as business activity and new orders increased. The Institute for Supply Management said Monday that its services index edged up to 56 in June from 55.7 in May. Any reading over 50 indicates that services firms are expanding. The increase in the broader index points to increasing demand for services from consumers and companies. Business activity climbed last month to a

reading 61.5, up from 59.5. The levels for new orders ticked up to 58.3 from 57.9 in May. The majority of the 18 sectors in the survey expanded last month, although both construction and mining firms contracted. (AP)

Europe

German Industrial Orders Fall Less than Expected in May. German industrial orders fell less than forecast in May as a modest rise in foreign demand took the sting out of a decline in domestic bookings, the Economy Ministry reported on Monday. Orders for goods made in Germany decreased by 0.2% on the month, the data showed. That was better than the consensus forecast for a 0.4-percent drop. Foreign demand inched up 0.2% while domestic demand dropped by 0.6%. The April data was revised up sharply to an increase of 2.2% from an originally reported 1.4% rise. (Reuters)

Turkish Growth Seen at 2% - 2.5% in 2015, Missing Government Target. The Turkish economy is expected to expand between 2% and 2.5% this year, falling far short of a government target of 4%, after a June election failed to produce a single-party government, government officials said. The heightened political uncertainty, including the possibility Turkey will fail to form a coalition government and instead hold a snap election, is suppressing investment. Domestic consumption has been restrained due to politics, as Turkey held three elections - regional, presidential and parliamentary - since March 2014. (Reuters)

Varoufakis Resigns after Decisive 'No' Bailout Vote. Greek Finance Minister Yanis Varoufakis resigned Monday, saying he was told shortly after Greece's decisive referendum result that some other Eurozone finance ministers and the country's other creditors would appreciate his not attending the ministers' meetings. Varoufakis said Prime Minister Alexis Tsipras had judged that his resignation "might help achieve a deal" and that he was leaving the finance ministry for that reason. Greeks voted overwhelmingly to reject creditors' proposal of more austerity measures in return for rescue loans, in the country's first referendum in 41 years Sunday. (AP)

Currencies

Ringgit at 16-year Low on Political Woes. The Malaysian ringgit hit a 16-year low on Monday after reports linked the country's prime minister to probes into alleged corruption, while most emerging Asian currencies slid as Greeks rejected austerity measures for bailout money. Most other emerging Asian currencies fell as Greeks voted against conditions of a rescue package from creditors on Sunday, increasing doubts over the future of the country's euro zone membership and denting risk appetite. Asian stocks and the euro tumbled. The ringgit fell as much as 0.8 per cent to 3.8070 per US dollar, its weakest since May 1999. (Reuters)

Euro Declines, but Off Lows after Greek 'No' Vote. The euro tumbled across the board on Monday, but was off the lows of the day, after Greece voted to reject the conditions tied to the troubled country's debt bailout deal. The euro dropped to a one-week low against the dollar below $1.10, and skidded to a six-week trough versus the yen immediately following the "No" outcome. Selling was also seen in other higher-yielding currencies such as the Australian dollar and emerging market currencies. In late New York trading, the euro was down 0.6% at $1.1044, after falling to a one-week low at $1.0970. Against the yen, the euro fell 0.7% to 135.22 yen. The euro was also down 0.6% versus sterling at 70.78 pence. (Reuters)

Commodities

Oil Crashes 8% as Greek Vote, Iran Talks Set Off Exodus. Oil prices suffered their biggest selloff in five months on Monday, falling as much as 8% as Greece's rejection of debt bailout terms and China's stock market woes set off a deepening spiral of losses. Adding to the pressure on oil, Iran and global powers were trying to meet a July 7 deadline on a nuclear deal, which could bring more supply to the market if sanctions on Tehran are eased. U.S. crude settled at $52.53 a barrel, down $4.40 or 7.7%, from its settlement on Thursday and below the 100-day moving average. Brent settled down $3.78, or 6.3%, at $56.54, also below the 100-day average. (Reuters)

Gold Firms in Safe-Haven Spurt after Greece Rejects Bailout. Gold eked out small gains on Monday in a rare spurt of safe-haven buying after Greek voters rejected terms of a bailout package, deepening the country's economic woes, and offsetting pressure from a rising U.S. dollar. Spot gold was up 0.2% at $1,170.01 an ounce at 2112 GMT, while U.S. gold futures settled up 0.8% at $1,173.20 an ounce. Platinum fell 3.4% to its lowest since March 2009 at $1,043.50 an ounce. Silver was down 0.4% at $15.73 an ounce and palladium fell 0.1% to $680.25 an ounce, close to a two-year low hit last week. (Reuters)