Malaysia

S&P Keeps Malaysia’s A- Sovereign Rating, Outlook Stable. Standard & Poor's kept Malaysia's long-term foreign currency sovereign credit rating at A- with a "stable" outlook, saying allegations of graft involving debt-laden state fund 1Malaysia Development Berhad (1MDB) will not impede policymaking. The agency also said it does not see the decline in energy prices affecting Malaysia's long-term fiscal consolidation. "The country's strong external position and fairly diverse economy can absorb some weakness in the oil and gas sector," S&P said in a statement on Monday. (Reuters)

Malaysia’s Consumer Confidence Slips in Q2. The Malaysian consumer confidence index, as measured by Nielsen, slipped to 89 points in the second quarter, down from 94 in the first quarter, following the introduction of the goods and services tax. This brings confidence back to the level achieved in 4Q14. According to Nielsen, 73% of Malaysian consumers believe that the nation is in a recession -- an increase from 67% in the previous quarter. (The Star)

Asia

Unwinding of Asset Bubbles Top Macroeconomic Threat to Asian Banks. Moody's Investors Service said its investor poll on Asian banks has shown that the unwinding of asset bubbles is the top macroeconomic threat to Asian banks in the coming 12 months. Property prices have appreciated particularly rapidly in Hong Kong, India, Malaysia and Singapore since the 2008-09 global financial crisis. Poll respondents highlighted China and Indonesia as the two economies that would face the biggest banking system and economic challenges in the coming 12 months. (Bernama)

Thai June Exports Tumble Most Since 2011. Thailand's exports tumbled more than expected in June, indicating the country's weaker currency is not yet helping fire up the country's growth engine. Exports, which equal more than 60% of the economy, dropped 7.87% in June from a year earlier. That was the biggest drop since late 2011 and more than the 5.0% decline seen in a market poll. (Reuters)

Indonesia April-June FDI Rises 18.2%. Indonesia's foreign direct investment grew at the fastest pace since 2013 on yearly basis in the second quarter - a bright spot in an otherwise weak economic outlook. In April to June Indonesia recorded 92.2 trillion rupiah of realized FDI, up 18.2% from a year ago, and accelerating from 14% growth in the prior three months. "Investment has kept on going despite economic slowdown," said Franky Sibarani, chief of the investment board. Malaysia was the biggest source of investment in the June quarter. (Reuters)

BOJ’s Nakaso Warns of China Slowdown Impact on Exports. Japanese policymakers must be mindful of the potential negative impact that China's economic slowdown could have on Japanese exports, central bank Deputy Governor Hiroshi Nakaso said on Monday. He also warned of the risk that an interest rate hike by the U.S. Federal Reserve could heighten global market volatility and hurt emerging markets vulnerable to capital outflows. While China's economy is expected to stabilize on stimulus measures taken so far, its slowdown may be prolonged by the huge slack in output and the property market. (Reuters)

David Cameron Begins Trade Mission in South East Asia. David Cameron says business deals worth more than £750m ($1.2bn) will be made during his tour of South East Asia. The UK prime minister says he wants to forge links with the area's rapidly growing markets for British goods and services. The prime minister's itinerary will take in Indonesia, Malaysia, Vietnam and Singapore on a whistle-stop trade mission. During the trip, the prime minister is expected to push for progress on a free trade deal between the European Union and South East Asian trading bloc, Asean. (BBC)

Americas

U.S. Business Capex Gauge Rebound Offers Hope for Factories. A gauge of U.S. business investment plans rebounded solidly in June after two straight months of declines, suggesting the drag on manufacturing from capital spending cuts was starting to ebb. The signs of a slight improvement in factory activity are a boost to the economic growth outlook heading into the second half of the year. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.9% last month after dropping 0.4% in May. The Dallas Fed, in a separate report, said its general business activity index improved for a second straight month in July. The index, however, remained in negative territory. (Reuters)

Orders for US Durable Goods Jump 3.4% in June. Orders to U.S. factories for big-ticket manufactured goods posted a sizable gain in June, but the advance was fueled by higher demand for commercial aircraft. Outside of this volatile category, a key category that represents business investment rose by a far more modest amount. Orders for durable goods jumped 3.4% in June from May. The gain was the best result since March. U.S. manufacturers have struggled this year from the effects of a strong dollar and a plunge in energy prices. (Reuters)

Europe

IMF Paints Dim Picture for Europe, Suggests More Money Printing May Be Needed. The International Monetary Fund warned on Monday that the euro zone's prospects were modest and that more money printing than planned may be

needed. The IMF, saying medium-term growth would be subdued, urged the European Central Bank to keep its money presses rolling. Worries about the global economy are weighing on many countries in Europe. The ECB also said is M3 measure of money circulating in the euro zone, which is often an early indicator of future economic activity, grew by 5.0% in June. The IMF said euro area GDP should accelerate to 1.7% next year from 1.5% in 2015. (Reuters)

German Business Confidence Up. German business confidence unexpectedly rebounded in July as the economy showed signs of a pickup and concerns eased over the crisis in Greece. The Ifo institute’s business climate index climbed to 108, the first increase in three months, from a revised 107.5 in June. The median estimate was for a decline to 107.2. The Bundesbank said that “strong” increases in factory orders during April and May, especially from abroad, suggest a revival in the German economy in coming months. (Bloomberg)

UK Factory Orders Index Hits Two-Year Low, Export Outlook Gloomy. British factory orders grew at their weakest pace this month in two years, according to an industry survey that suggested a strong pound has further crimped the outlook for manufacturing exports. The Confederation of British Industry's industrial order book balance fell to -10 this month, its lowest since July 2013, from -7 in July. Economists had expected a slight improvement to -5. The CBI's quarterly industrial trends survey pointed to a murky outlook for manufacturers. Expectations for export orders in the next three months fell to their lowest level since October 2011. (Reuters)

Currencies

Ringgit at 17-year Lows on Fed Caution. Weak commodity prices sent the Malaysian ringgit to 17-year lows on Monday, while most emerging Asian currencies eased amid caution ahead of the U.S. Federal Reserve's policy meeting. The ringgit eased 0.1% to 3.8140 per dollar, its weakest since September 1998, as weak commodity prices added to concerns over Malaysia's sluggish exports. The Malaysian currency was pegged at 3.8000 between 1998 and 2005. (Reuters)

Dollar Tumbles after China Share Plunge Spurs Flight to Safety. The U.S. dollar hovered around a nearly two-week low against a basket of major currencies on Monday after the biggest drop in Shanghai shares in eight years drove demand for the safe-haven yen and led traders to trim bets against the euro. The euro was last up 1.04% against the dollar at $1.10960, near a two-week high of $1.11295. The dollar was last down 0.45% against the yen at 123.240 yen after hitting a nearly two-week low of 123.010 yen. The dollar index was last down 0.73% at 96.538, near its session trough of 96.288. (Reuters)

Commodities

Oil Hits 4-month Low. Crude oil futures hit four-month lows on Monday after a steep drop in China's stock markets sparked concern about the economic health of the world's biggest energy consumer, while evidence of a growing crude glut mounted. Brent crude oil settled down $1.15, or 2%, at $53.47 a barrel. In post-settlement, it fell to as low as $52.90, its lowest since mid-March. U.S. crude closed down 75 cents, or 1.6%, at $47.39. It fell below $47 post-settlement, the lowest since late March. (Reuters)

Gold Loses Traction, Closes in on 5-1/2-year Low. Gold lost ground on Monday, moving closer to last week's 5-1/2-year lows below $1,100 per ounce, with expectations for a near-term U.S. interest rate hike seen keeping momentum firmly with the bears. Spot gold was down 0.6% at $1,092.36 an ounce by 3:20 p.m. EDT (1920 GMT), after falling for a fifth straight week last week, the longest slide since late 2012. In other precious metals, spot palladium fell 1.9% to $610.50 an ounce and platinum lost 0.2% to $980.25. Silver was down 0.6% at $14.56. (Reuters)