Global

IMF Cuts World Growth Outlook. The IMF cut its forecast for global growth this year, citing a weaker first quarter in the U.S. and warning that financial-market turbulence from China to Greece clouds the outlook. The world economy will grow 3.3% in 2015, less than the 3.5% pace projected in April and slower than the 3.4% expansion last year, the International Monetary Fund said in revisions to its World Economic Outlook released Thursday in Washington. The fund left its forecast for growth next year unchanged at 3.8%. (Bloomberg)

World Food Prices Fall Further in June. Global food prices fell in June, continuing an almost uninterrupted slide since April 2014, led by falling dairy and sugar prices. The Food and Agriculture Organization's (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 165.1 points in June, down 1.5 points or 0.9% from May. June's reading was the lowest on the index since September 2009. High global production, a strong U.S. dollar and cheaper crude oil have helped cap food prices over the past year. (Reuters)

Malaysia

Overnight Policy Rate Stays at 3.25% at July Meeting. The Overnight Policy Rate was left unchanged at 3.25% for the seventh straight Bank Negara Monetary Policy Committee meeting and the fourth of six scheduled for 2015. Since the last bimonthly meeting, the People’s Bank of China has further eased monetary policy with two rate cuts. The Reserve Bank of India and Bank of Korea made one rate cut each. But recent events affecting the ringgit exchange rate and domestic financial markets mean BNM will pay little heed to the actions of other central banks and seek to calm the domestic market while maintaining a monetary policy stance that is accommodative and supportive of economic activity. (See Economic Viewpoint)

Matrade Generates RM17 Billion in Sales in 5M15. Malaysia External Trade Development Corporation has generated RM17.01 billion in sales from 29 trade promotion activities for the first five months of this year. Chief executive officer Datuk Dzulkifli Mahmud said Matrade had organised annual events such as the Malaysian International Halal Showcase (Mihas), which had a positive impact on local halal companies. He said Matrade also organised the inaugural Kuala Lumpur International Aerospace Business Convention 2015 that gathered aerospace, and maintenance, repair and overhaul companies from all over the world. (Bernama)

Global Funds Boost Malaysia Bond Holdings. Overseas investors boosted their holdings of Malaysia’s government bonds to a record in June even as the ringgit dropped twice as much as any other currency in Asia. The holdings rose 4.5% to 176.6 billion ringgit ($46.4 billion), a fourth monthly increase, central bank data showed. Ten-year notes in the Southeast Asian nation offer a yield of 4.08%, compared with 2.23% for Treasuries. Foreign holdings of Malaysian government and corporate debt climbed 1.7% to 211.9 billion ringgit in June from the previous month. (Bloomberg)

Asia

China's CPI Suggests Stabilization in Demand. China’s consumer prices rose faster than economists forecast in June, suggesting a stabilization in demand that’s now threatened by the stock market’s rout. The nation’s consumer-price index increased 1.4% last month from a year earlier, compared with the 1.3% median estimate in a market survey and the 1.2% increase in May. Food inflation increased to 1.9%, while non-food prices climbed 1.2% from a year earlier, the data showed. Consumer prices were unchanged from a month earlier. (Bloomberg)

Bank of Korea Holds Rate at Record Low, Trims GDP Forecast. The Bank of Korea held its key interest rate at a record low, opting to monitor the impact of recent cuts in borrowing costs and the government’s fiscal stimulus program. The decision to keep the seven-day repurchase rate at 1.5% was forecast by all 18 analysts surveyed. Governor Lee Ju Yeol trimmed the bank’s forecast for growth this year to 2.8% and maintained his projection for inflation of 0.9%. (Bloomberg)

Australia's Unemployment Rate Edges Up to 6.0%. Australia's jobless rate inched up to 6.0% in June, official data showed Thursday, as more people entered the labour force and amid signs that companies were hiring additional workers. Some 7,300 jobs were added to the economy. The seasonally adjusted data was slightly better than what economists expected. Analysts had forecast the unemployment rate to edge up to 6.1% with a loss of 5,000 positions after a strong increase of 42,000 roles in May. (AFP)

USA

U.S. Jobless Claims Rise to Highest Level Since February. New applications for U.S. unemployment insurance benefits rose last week to their highest level since February, suggesting some slowdown in the labor market recovery. Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 297,000 for the week that ended July 4, the U.S. Department of Labor said on Thursday. The four-week moving average of claims, which smoothes out week-to-week fluctuations and is therefore considered a better gauge of the labor market, rose 4,500 to 279,500 last week. Continued claims - the number of people still claiming jobless benefits after an initial week of aid - rose 69,000 to 2.334 million in the week ended June 27. (Reuters)

Europe

German Trade Surplus Hits Record High. German exports rose at their fastest pace this year in May and the trade surplus hit a record high, boosting expectations that Europe's largest economy will pull off stronger growth in the second quarter after expanding modestly in the first. Seasonally adjusted exports climbed unexpectedly by 1.7% on the month while imports increased by 0.4%, widening the trade surplus to 22.8 billion euros, its highest since the data was first collected in 1991, figures from the Federal Statistics Office showed on Thursday. Economists had expected exports to slip by 0.8% and imports to rise by 0.9%. (Reuters)

Bank of England Keeps Rates Steady. The Bank of England kept interest rates at a record low once again on Thursday, as its policymakers grappled with how to balance improving wage growth in Britain against more ominous signals from the global economy. The BoE's Monetary Policy Committee, as expected, left its Bank Rate at 0.5%, where it has been since the depths of the financial crisis more than six years ago, and made no statement. Business surveys this week pointed to solid economic growth, albeit reliant on consumer spending and the country's vast services sector rather than manufacturing and exports. (Reuters)

Greece Offers New Tax Hikes in Latest Bailout Proposal. Greece offered new measures including a tax hike on shipping companies and scrapping tax breaks for its islands in the latest proposal sent to creditors on Thursday for a cash-for-reforms deal, as Athens races to win new funds to avert bankruptcy. The government also plans to raise value added tax for restaurants, roll out pension reforms and to set a firm timetable for privatizations. In return, Athens wants the creditors to review the primary surplus targets for Greece over the next four years and wants funding worth 53.5 billion euros to cover its loan obligations until the end of June 2018. (Reuters)

Currencies

Yen, Swiss Franc Weaken as China Stocks Gain. The safe-haven yen and Swiss franc fell on Thursday after Chinese stocks rebounded and worries about Greece eased somewhat as Europe awaited reform proposals from the debt-burdened country to back its request for another three-year loan. In late New York trading, the dollar was up 0.5% against the yen at 121.32. The greenback also rose against the Swiss franc, up 0.3% at 0.9485 franc. The euro, meanwhile, was down 0.6% against the dollar at $1.1011 having topped $1.11 in Asian trade. (Reuters)

Commodities

Oil Up Nearly 3% on China Equities Rebound, Iran. Oil rebounded sharply on Thursday from three-month lows hit earlier this week, with prices up nearly 3% as China's collapsing stock market steadied and oil traders remained uncertain about negotiations for a nuclear deal that will allow Iran to export more crude. Bets of strong gasoline demand through the U.S. summer driving season fueled some of the rally. Brent crude settled up $1.56, or 2.7%, at $58.61 a barrel. On Monday, Brent hit a three-month low of $55.10. U.S. crude settled up $1.13, or 2.2% at $52.78. This week's low of $50.58 was the lowest since April. (Reuters)

Gold Climbs from Four-Month Low on Chinese Recovery. Gold pared gains on Thursday after climbing from the prior session's four-month low as a recovery in Chinese shares cooled fears of a wider rout in the major bullion consumer while strength in the U.S. dollar kept a lid on gains. Spot gold was up 0.3% at $1,160.96 an ounce at 1910 GMT, up from Wednesday's four-month low at $1,146.75. Among other metals, spot silver was up 1.8% at $15.40 an ounce. Palladium was down 2.5% at $634.72 an ounce after slipping overnight to its weakest since June 2013. Platinum was down 0.7% at $1,022.50 an ounce after falling on Wednesday to its lowest since February 2009. (Reuters)