• WTO to Resume Talks on Expanding Tariff-free Digital Products. Negotiators will gather in Geneva starting Tuesday to discuss removing import tariffs on 200 or so electronics products under the tutelage of the World Trade Organization, but the prospects of an agreement remain unclear. Talks to expand the list began in 2012. China agreed to add about 200 items after the Sino-U.S. summit last November. But the deal did not cover LCD panels and other items produced in large quantities by South Korea, whose objections ultimately scuttled hopes for a deal in 2014. South Korea plans to withdraw demands on LCD panels and other items and instead focus on panel parts. Participants had hoped to agree on the new list this summer and move on to discussing specific timetables for tariff removal in the fall. (Nikkei)

• Singapore Economy Contracts Most Since 2012 on Manufacturing. Singapore’s economy contracted more than analysts predicted last quarter. The local dollar weakened to its lowest level in more than a month. GDP fell an annualized 4.6% in the three months through June from the previous quarter, when it expanded a revised 4.2%. The median of 13 estimates was for a 1.5% contraction. Singapore’s manufacturing shrank an annualized 14% in the second quarter from the previous three months. Construction contracted 0.2%, while services fell 2.6% in the same period. The economy’s contraction is the worst since the third quarter of 2012. (Bloomberg) 
• Indonesia Central Bank Keeps Rates on Hold. Indonesia's central bank kept its key reference rate on hold on Tuesday, resisting loosening policy to bolster an economy growing at its weakest pace since the global financial crisis. Bank Indonesia (BI) said interest rates were in line with its inflation targets for this year and next. As widely expected, the central bank kept the benchmark interest rate at 7.50%, unchanged for a fifth meeting in a row. (Reuters) 
• China’s Credit Expands in June as Stimulus Efforts Kick In. China’s broadest measure of new credit increased the most since January after the government stepped in to boost provincial finances and the central bank accelerated monetary easing. Aggregate financing, which includes bank loans and off-balance credit, was 1.86 trillion yuan ($300 billion), according to the People’s Bank of China, higher than all 23 estimates of economists. The pick-up suggests  relaxed rules for local authorities to obtain financing and record-low benchmark interest rates are boosting demand for credit. (Bloomberg) 
• China Reserves Falling Least in a Year Signals Outflow Eased. China’s foreign-exchange reserves moderated in the second quarter, a sign capital outflows eased as the central bank held the yuan steady against the dollar. The reserves fell by $40 billion to $3.69 trillion, the lowest since 2013.That followed a record $113 billion drop in the first three months. The holdings, which are more than triple the size of any other country’s, shrank in each of the last four quarters as the central bank bought yuan to stabilize the exchange rate. (Bloomberg) 
• Australia Business Confidence Hits Highest Since Abbott Election. Australian business confidence climbed to the highest level since the election of Prime Minister Tony Abbott’s government in September 2013 as budget stimulus for small firms improved the outlook. National Australia Bank Ltd.’s sentiment index advanced to 10 last month from 8 in May as companies turned positive in all industries bar mining. The Abbott government in May offered tax cuts and write-offs for small firms to boost sentiment. Businesses have also been aided by a currency trading at about 74 U.S. cents and recordlow interest rates at 2%. (Bloomberg)

• Weak U.S. Retail Sales Hint at Slower Economic Growth. U.S. retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods, raising concerns the economy was slowing again. Tuesday's weak retail sales report, together with softening of the labor market, dampened expectations a bit for an interest rate hike from the Federal Reserve this year. Retail sales slipped 0.3% last month, the weakest reading since February, after May's downwardly revised 1.0% increase. The weak retail sales data suggests the economy might have lost some momentum at the end of the second quarter. (Reuters) 
• White House Cuts Growth Forecast for 2015, 2016. The White sees U.S. growth rising by just 2% this year, down from its earlier forecast of 3% growth—after the economy stalled during the first quarter. The new growth forecast largely reflects the current thinking among private economists. At the same time, the White House now expects the consumer-price index to post an annual average increase of just 0.2% this year, down from its earlier forecast of a 1.4% gain. (WSJ) 
• U.S. Import, Export Prices Slip in June. U.S. import prices unexpectedly fell in June as the lingering effects of a strong dollar offset rising costs for petroleum products, keeping imported inflation pressure under wraps. The Labor Department said on Tuesday import prices dipped 0.1% last month after a downwardly revised 1.2% increase in May. Import prices have now declined in 11 of the last 12 months. Economists had forecast import prices edging up 0.1% after a previously reported 1.3% jump in May. In the 12 months through June prices fell 10.0%. Last month, imported petroleum prices rose 0.8% after surging 11.7% in May. (Reuters)

Source: Kenanga Research - 15 Jul 2015