Malaysia

Malaysia Set to Become Regional Green Technology Hub. Malaysia will become the green technology hub in the region, judging from the success of the previous five editions of the International Greentech and Eco Product Exhibition and Conference Malaysia held. Minister of Energy, Green Technology and Water Datuk Seri Dr Maximus Ongkili said the response to the conference had been good, and since 2010, it had generated over RM6 billion in green business leads. (Bernama)

Companies Told to Hedge Against Ringgit Volatility, Use Local Raw Materials. Malaysian exporters have been urged to consider hedging the current level of ringgit, which is said to be best level for export, against the US dollar, besides increasing productivity by using local raw materials. Malaysia External Trade Development Corporation (Matrade) chief executive officer Datuk Dzulkifli Mahmud said exporters should use more local raw materials to reduce production costs and losses from foreign exchange rates. (Bernama)

Asia

Japan to Cut Discretionary Spending by 10% in 2016 Budget. Japan's government will cut discretionary spending in the fiscal 2016 budget by 10% as part of its efforts to improve public finances, a government source said on Wednesday. The government has set aside 14.7 trillion yen ($118.88 billion) in the fiscal 2015 budget for discretionary spending, and 10% reduction would reduce it to 13.2 trillion yen. The government also plans to earmark 30% of its 2016 budget, or 4 trillion yen, for spending on growth policy measures. (Reuters)

Japan Government Says Won't Meet 2020 Fiscal Discipline Targets. Japan's government said that it will not achieve its target of returning to a primary budget surplus in fiscal 2020, suggesting further steps will be needed to boost revenue and lower spending. Japan seeks to reduce a debt/GDP ratio that is the worst in the industrialized world. The Cabinet Office forecast the primary budget deficit will reach 6.2 trillion yen ($50.15 billion) or 1.0% of gross domestic product in fiscal 2020. (Reuters)

Australia Core Consumer Prices Rise 0.6%, Matching Forecasts. Australia’s core consumer prices matched economists’ forecasts last quarter, leaving the central bank with room to lower interest rates further if necessary. The core prices rose 0.6% from the previous quarter, the Bureau of Statistics, matching the median forecast of 23 economists. The consumer price index advanced 0.7% from the prior three months, compared with economists’ forecast for a 0.8% increase. Policy makers are likely to look through inflation driven higher by a weaker currency and higher oil price. (Bloomberg)

Australia's Central Bank Chief Sees Risks in More Rate Cuts. Australia's central bank sees scope for yet lower interest rates as inflation stays in the sweet spot for stimulus, though the bar for action is high given concerns it could lure households into taking on too much debt. Reserve Bank of Australia (RBA) Governor Glenn Stevens said restrained inflation had already allowed rates to be cut to all-time lows and a further easing remained "on the table." Yet he was quick to warn that such a move might encourage a borrowing binge that would end badly for all concerned. (Reuters)

China's Industrial Sector Still Faces Significant Downward Pressure. China's industrial sector still faces significant downward pressure and "arduous efforts" are needed to stabilise the economy, the Ministry of Industry and Information Technology said on Wednesday. Firms in some industries were facing increasing difficulties in making profits. Official data showed China's factory output growth hit a five-month high of 6.8% in June compared with a year ago. (Reuters)

IMF Told China It's Worried About Investors' Mobility in Chinese Markets. IMF has told China about its concern over investors' ability to enter or leave Chinese financial markets as they wish. IMF met with officials in China to discuss the chances of including the yuan in the fund's basket of currencies. Chinese shares plunged in late June, prompting Beijing to stage its biggest-ever rescue of the stock market. Steps such as barring some investors from selling their shares, drew criticism of unwarranted government interference and cast doubt on China's appetite for market reforms. IMF had asked China to improve the transparency of its financial markets. (Reuters)

RBNZ Cuts Rates a Second Time, Says Further Easing Is Likely. New Zealand’s central bank cut interest rates for the second time in six weeks and said further easing will likely be needed to stoke inflation as growth slows. The official cash rate was lowered a quarter percentage point to 3%, as forecast by 18 of 19 economists. Wheeler is trying to boost inflation from near zero to his 2% target. The inflation rate was 0.3% in the second quarter. (Bloomberg)

India Steps Up Incentives for Urban Development Investment. India's government is going the extra mile to attract foreign investment, planning to offer tax and other incentives for urban development and renewable energy projects. The central government is expected to provide 480 billion rupees ($7.53 billion), with contributions from state governments and other sources to bring total funding to an estimated 2 trillion rupees over five years. (Nikkei)

Thailand Needs to Restructure Its Economy with Investment. The level of private investment in Thailand is a worry, the country's next central bank governor said on Wednesday, and Southeast Asia's second largest economy and workforce will face problem if it does not improve soon. The junta has stepped up infrastructure plans and accelerated approvals for private investment in its effort to rekindle the economy. Foreign direct investment in Thailand flows mostly in to the service sector and foreign firms have been acquiring businesses rather than expanding new bases in the country. (Reuters)

Americas

San Francisco Fed: Weak Inflation Not the Conundrum Many Believe. The Federal Reserve’s failure to get inflation back up to desired levels isn’t the problem many people believe it to be, according to new research from the Federal Reserve Bank of San Francisco. U.S. inflation has run under its 2% target for more than three years. Bank economist Kevin Lansing wrote that “recent inflation behavior departs only mildly from earlier patterns.” Continued growth and falling unemployment should over time cause a rise in price pressures. (WSJ)

Obama Renewing Call to Reauthorize Export-Import Bank. President Barack Obama is ramping up pressure on Congress to reauthorize the Export-Import Bank. The federal agency's charter expired last month after lawmakers refused to reauthorize it. The bank underwrites loans to foreign companies purchasing American products, but conservatives call it corporate welfare. The White House says some businesses have already been affected by the bank's lapse and that thousands more will be at a competitive disadvantage unless Congress renews it. (AP)

U.S. Existing Home Sales Near 8.5-Year High. U.S. home resales rose in June to their highest level in nearly 8.5 years, a sign of pent-up demand that should buoy the housing market recovery and overall economy. Existing home sales increased 3.2% to an annual rate of 5.49 million units, the highest level since February 2007. Existing sales this year are on track to record their biggest gain in eight years. (Reuters)

NRF Cuts 2015 U.S. Retail Sales Forecast After Weak First Half. The National Retail Federation cut its forecast for retail sales growth in the country this year, citing an unexpected slowdown in growth in the first half of the year. The NRF expects U.S. retail sales to grow 3.5% in 2015, lower than the 4.1% growth it forecast in February. NRF said sales are expected to grow 3.7% over the next five months. (Reuters)

Brazil to Slash Fiscal Surplus Goal as Downturn Takes A Toll. The Brazilian government will slash its key fiscal surplus goal for the year as tax revenues sink, but plans to unveil fresh spending cuts to show its commitment to austerity. The reduction of the targeted primary surplus of 66.3 billion reais ($20.89 billion) or the equivalent to 1.1% of gross domestic product will be announced later on Wednesday. Many market economists expect the primary surplus, or savings prior to debt interest payments, to end the year at between 0.6 and 0.8% of GDP, reflecting an economy that is expected to contract nearly 2% this year. (Reuters)

Europe

Swiss Economy Seen Rebounding after Franc-Induced Setback. Switzerland’s economy will probably eke out meager growth in the third quarter, ending a recession induced by the central bank’s decision to allow the franc to float freely again and lessening the likelihood of further policy easing. Gross domestic product, which probably shrank 0.2% in each of the first two quarters, will increase 0.1% in the three months through September, according to median estimate. Economists predict GDP growth of 0.7% this year, improving to 1.2% in 2016. (Bloomberg)

Currencies

Dollar Recovers after Drop, Pound Rises on BOE. The dollar rose on Wednesday after its biggest fall in a month the previous session, while sterling gained in response to minutes from the Bank of England's last meeting that suggested some policymakers support higher interest rates. The dollar index was up 0.3% at 97.595. The British pound rose 0.25% to $1.5599. Against the euro, it gained 0.6% to 69.91 pence. Meanwhile, the yen held its ground against the dollar and strengthened against the euro. The yen slipped 0.2% versus the dollar at 124.07 yen, while the euro fell 0.2% at 135.28 yen. (Reuters)

Commodities

Oil Falls, U.S. crude Settles Below $50 as Inventories Rise. Oil prices fell and U.S. crude settled below $50 a barrel on Wednesday after government data showed crude inventories in the United States rose last week and as a stronger dollar and weaker global equities applied pressure. U.S. crude oil stocks rose 2.5 million barrels, the Energy Information Administration (EIA) said in its weekly report, contrasting with expectations of a 2.3 million-barrel drawdown. U.S. September crude fell $1.67, or 3.28%, to settle at $49.19 a barrel, its first settlement below $50 since April. Brent September crude fell 91 cents to settle at $56.13. (Reuters)

Gold Slides 1% to 5-year Low as Investors Pull Back. Gold fell more than 1% to a five-year low on Wednesday as a bounce in the dollar fueled downside momentum, with investors continuing to pull away from the metal after its dramatic slide earlier this week. Spot gold was down 0.8% at $1,092.40 an ounce at 2:41 p.m. EDT (1841 GMT), after touching a five-year low at $1,086.90. Spot platinum was down 0.2% at $975.50 an ounce, while palladium was down 0.1% at $625, both trading near multi-year lows. Silver was down 0.6% at $14.74 an ounce. (Reuters)