Global

Central Banks Dump up to $260 Billion FX Reserves in Second Quarter. Central banks dumped as much as $260 billion of foreign exchange reserves in the second quarter as emerging market central banks tried to mitigate the impact of capital fleeing their own economies, according to Citi. The decline is the largest drop in global FX reserves in more than a decade. Global head of foreign exchange strategy at Citi Steven Englander said central banks sold reserves to prevent their currencies from falling off a cliff. (Reuters)

Shrinking Trade Puts Pressure on Emerging Market Growth, Investment. Falling exports are piling pressure on emerging economies, putting many of them at risk of a multi-year cycle of sluggish trade, economic growth and investment. Exports from emerging markets are declining year-on-year at the sharpest rate since the 2008-09 crisis, while Asian powerhouses such as Korea, Taiwan and Philippines have posted five to six straight months of dwindling overseas sales. The trade slump is increasingly stemming from weaker intra-emerging market ties. As consumption and investment fall in many countries, their imports too are shrinking. (Reuters)

Malaysia

Bank Negara's International Reserves at RM379.4 Billion as at July 15. Bank Negara Malaysia's (BNM) international reserves amounted to RM379.4 billion (equivalent to US$100.5 billion) as at July 15, 2015. The reserves position is sufficient to finance 7.9 months of retained imports and is 1.1 times the short-term external debt, the central bank said in a statement today. The main components of the international reserves were foreign currency reserves (US$92.0 billion), International Monetary Fund reserves position (US$0.8 billion), Special Drawing Rights (US$1.8 billion), gold (US$1.4 billion) and other reserve assets (US$4.5 billion). (Bernama)

Short-Term Rates to Remain Stable on BNM Intervention. Short-term interbank rates are expected to remain stable today on Bank Negara Malaysia (BNM)'s intervention to absorb excess liquidity from the financial system. BNM estimated today's liquidity at RM35.22 billion in the conventional system and RM11.61 billion in Islamic funds. (Bernama)

Asia

Singapore's June Consumer Prices Slip for Eighth Straight Month. Singapore's annual consumer prices fell for the eighth straight month in June. CPI in June fell 0.3% from a year earlier, in line with the median forecast in a Reuters survey. (Reuters)

Japan Trade Deficit Narrows 92% on Jump in Exports. Japan's trade deficit narrowed sharply last month as exports picked up while a sky-high energy import bill continues to fall. The country's trade deficit came in at 69.0 billion yen ($556 million), plunging 91.7% from a 834.0 billion yen deficit a year ago. Over the six months through June the deficit shrank by 77.4% as weak commodity prices helped bring down Japan's energy bill. (AFP)

Japan June Exports Strengthen but China Clouds Outlook. Japan's exports rose at the fastest pace in five months in June. Exports rose an annual 9.5% in June, less than the median estimate for a 10.0% rise given by economists. Separate data from the Bank of Japan also showed that real exports rose in June from the previous month in a tentative sign that overseas demand stabilized. Policymakers are counting on exports to supplement Japan's domestic-demand driven economy, but China's slowdown could curb Japan's growth by slowing its exports. (Reuters)

ASEAN Finalising Livestock Sector Action Plan. ASEAN member countries, in collaboration with the United Nations Food and Agriculture Organisation (FAO), are finalising an ASEAN strategic plan of action for livestock sector 2016-2020. FAO Assistant Director-General and Regional Representative Hiroyuki Konuma anticipates that in 10 years the majority of ASEAN countries will graduate to middle income status the demand will grow 40% by 2025. He said ASEAN would require to harmonise intra and extra-ASEAN trade policies and regulatory frameworks for the livestock sector. (Bernama)

Superlong JGBs Hit Three-Month High Following BOJ Operation. Investors pushed up Japan's superlong government bonds to the highest level in three months Thursday, after the result of the Bank of Japan's latest debt purchase operations suggested weakening selling pressure in the market. The yield on 30-year JGBs fell to 1.385% around noon before recovering slightly. Speculation that Japan's mammoth government pension fund is largely done with selling superlong JGBs as part of its portfolio rebalancing also added to demand for 30-year bonds, analysts said. (Nikkei)

Bank of Russia Finds Indicator It Likes to Set Stage for Easing. Even as ruble weakness and an uptick in inflation expectations point to Russia’s first pause in interest-rate cuts this year, the Bank of Russia has found a gauge that may tip the scale in favor of another reduction. The central bank said inflation fell to 11.5% in June for its first decline in 16 months. Policy makers will cut the key rate to 11% at the July 31 meeting, according to the median forecast of economists. (Bloomberg)

Americas

U.S. Jobless Claims Lowest Since 1973; Leading Index Rises. The number of Americans filing new applications for unemployment benefits last week dropped to its lowest level in more than 41-1/2 years, suggesting the labor market maintained a sturdy pace of job growth in July. The four-week moving average of claims fell 4,000 to 278,500 last week. The bullish jobs picture brings the Federal Reserve a step closer to hike interest rates this year. In a separate report, the Conference Board said its Leading Economic Index rose 0.6% last month after advancing 0.8% in May. Another report from the Chicago Fed showed its National Activity Index rising to +0.08 in June after five straight months of negative readings. The gain was led by improvements in production and employment related indicators. (Reuters)

U.S. Commercial Paper Market Grows in Week: Fed. The amount of U.S. commercial paper grew in the week ended July 22. U.S. seasonally adjusted commercial paper outstanding rose $19.2 billion to $1.048 trillion in the latest week. Non-seasonally adjusted commercial paper outstanding - which some analysts consider a more reliable reading - rose $6.5 billion to $1.036 trillion. U.S. non-seasonally adjusted foreign financial commercial paper outstanding rose $0.5 billion to $250.6 billion. (Reuters)

U.S. Growth Seen Picking Up; Rate Hike Expected in Sept. U.S. economic growth is set to pick up after a lackluster first half, allowing the Federal Reserve to raise interest rates in September, according to a Reuters poll. Around two-thirds of economists said the biggest challenge to the Fed's anticipated rate hike trajectory would be an unexpected slowdown in the U.S. economy. The Fed's policy-setting committee meets next week. (Reuters)

Europe

Greece Approves EU Demands in Order to Keep the Euro. Greece passed a second bundle of policy measures demanded by the country’s European creditors as Prime Minister Alexis Tsipras urged lawmakers to stop the country being forced out of the euro. Tsipras won the support of at least 151 lawmakers for a bill that will simplify court decisions and transpose European rules on failing banks. Tsipras said he’ll implement the creditors’ program even though he thinks the policies being imposed are wrong. (Bloomberg)

Euro Zone Consumer Sentiment Worse Than Expected in July. Euro zone consumer confidence fell by more than expected in July. The European Commission said a flash estimate showed the euro zone consumer morale indicator was -7.1 points from -5.6 in June. The market expectation was for a slight decline to -5.7 points in July, according to a Reuters poll. In the European Union as a whole, consumer sentiment fell by 1.6 points to -4.9. (Reuters)

UK Car Production at Seven-Year High. UK car production hit a seven-year high in the first half of the year, the industry's trade body has said. In total 793,642 cars were built between January and June, up by 0.3% on a year ago, The Society of Motor Manufacturers and Traders (SMMT) said. It marks the best half-year since 2008. In June, the number of cars made rose 5.4% on a year ago, with demand for exports driving the increase. Overall, production volumes have risen by more than 50% since 2009. (BBC)

U.K. Retail Sales Unexpectedly Fall as Food, Furniture Drop. U.K. retail sales unexpectedly declined in June on a wide range of goods including food, furniture, sporting equipment and jewelry. The volume of sales including auto fuel fell 0.2% from May. Economists forecast a 0.4% increase, according to a Bloomberg survey. From a year earlier, retail sales rose 4% in June. (Bloomberg)

Economists Say Fundamentals Strong Despite British Retail Sales Dip. British retail sales suffered an unexpected dip last month. Nonetheless, economists were confident that lower prices, the fastest wage rises in five years and high levels of employment would help sales pick up from what they viewed as a temporary dip in an often-volatile series of data. Policymakers are relatively bullish about the economic outlook for Britain, but are divided over the robustness of a recent pick-up in wages which is needed to sustain growth. (Reuters)

BOE's McCafferty Says Must Be Careful Not Leave Rate Hike Too Late. Bank of England policymaker Ian McCafferty said that the central bank needed to be careful not to leave it too late to raise interest rates. Minutes from the Monetary Policy Committee's July meeting, published on Wednesday, showed a number of members were edging towards voting for higher rates. Policymakers have stressed rates are likely to rise gradually and to lower levels than in the past. (Reuters)

Euro Zone Growth to Plateau From Here on, Inflation Seen Weak. The euro zone economy looks set for a prolonged period of modest growth and low inflation, according to a Reuters poll. The poll of almost 70 economists showed GDP growth would languish between 0.3 and 0.5% each quarter from now until end-2016. In the short-term at least, prospects for the euro zone economy look slightly better with a deal now struck between Greece and its international creditors. (Reuters)

Currencies

Ringgit Ends Broadly Lower against Major Currencies. The ringgit closed broadly lower against major currencies on Thursday, including the US dollar, dragged down by profit-taking. At 5 pm, the ringgit was quoted at 3.8045/8065 against the greenback from 3.7915/7945 on Wednesday. The ringgit depreciated vis-a-vis the Singapore dollar to 2.7849/7872 from 2.7803/7829 on Wednesday and weakened against the yen to 3.0731/0760 from 3.0636/0665 yesterday. The local currency fell against the pound sterling to 5.9327/9374 from yesterday's 5.9246/9308 and eased against the euro to 4.1811/1841 from 4.1468/1512 on Wednesday. (Bernama)

Euro Rises as Greece Makes Move for Bailout. The euro strengthened on Thursday, briefly rising above $1.10 for the first time in a week, as the Greek parliament approved a second set of reforms required to start negotiations with lenders in a bid to avert bankruptcy. Meanwhile, the dollar stalled against other major currencies despite expectations that the U.S. Federal Reserve would raise interest rates by year end. The euro was last up 0.6% against the dollar and yen at $1.1000 and 136.19 yen, respectively. The dollar index was last down 0.5% at 97.094. (Reuters)

Commodities

Oil Falls on Concerns about Supply Glut, Shaky Demand. Brent crude oil futures settled at its lowest since April on Thursday and U.S. crude fell into bear market territory and ended below $49 a barrel for the first time since late March, as persistent concerns about ample supply and shaky demand offset support from the dollar's weakness. U.S. crude fell 74 cents to settle at $48.45 a barrel, down 21% from the June 10 close at $61.43. Brent September crude fell 86 cents to settle at $55.27, the lowest since April 2. Both U.S. and Brent crude are on pace to post double-digit percentage monthly losses. (Reuters)

Gold Turns Lower as U.S. Data Takes Pressure off Dollar. Gold turned lower on Thursday, dipping back below $1,100 an ounce as a steeper-than-forecast drop in U.S. jobless claims helped the dollar recover from earlier lows, though prices remained under pressure after this week's plunge. Spot gold was down 0.3% at $1,089.34 an ounce at 2:53 p.m. EDT (1853 GMT), off a high of $1,105.60. Silver was down 1% at $14.63 an ounce. Spot platinum fell 0.8% at $971 an ounce, while spot palladium was down 1.6% at $613.75 an ounce. (Reuters)