Malaysia

Malaysia Reserves Fall to Below $100 Billion. Malaysia’s foreign reserves fell by US$3.7b to US$96.7b (RM364.7b) as at end-July following a fall of US$5.0b to US$100.5b (RM379.4b) at mid-July. This brings about a total reduction in the stock of reserves to about US$8.7b or RM33.5b, the highest single month loss since Sep/Oct 2008, at the height of the Global Financial Crisis. The current reserves level is sufficient to finance 7.6 months of retained imports and is 1.1 times the redefined short term external debt. (See Economic Viewpoint: BNM Forex Reserves)

Malaysia Q2 GDP Growth Seen Slowing to 4.5%. Malaysia's annual growth pace likely slowed to 4.5% in the second quarter, a Reuters poll showed, due to soft energy and commodity prices as well as weak domestic demand. In the first quarter of 2015, annual growth was 5.6%. The poll projected full-year 2015 at 5.0%, slower than 6.0% in 2014. Economists still see sluggish external demand as a challenge to Malaysia for the rest of the year. (Reuters)

Asia-Pacific

BOJ's Kuroda Warns Oil Price Falls May Delay Hitting Inflation Goal. Bank of Japan Governor Haruhiko Kuroda on Friday warned that the timing for hitting his ambitious 2% inflation target may be delayed further if oil price falls persist. But he stressed the central bank won't expand stimulus again unless oil price falls last long enough. Kuroda also remained upbeat on the outlook, despite growing signs the economy may have contracted in between April and June. (Reuters)

China's Forex Reserves Fall by US$42.5 Billion in July. China's foreign exchange reserves, the world's largest, fell by $42.5 billion in July to $3.65 trillion, central bank data showed on Friday, the sharpest monthly drop since March amid signs of capital outflows. The reserves dropped by $36.2 billion in the second quarter to $3.69 trillion - the fourth consecutive quarter of decline, earlier data showed. China's gold reserves inched down to $59.24 billion at the end of July from $62.4 billion at the end of June. China's IMF reserve position stood at $4.37 billion, down from $4.57 billion the previous month. (Reuters)

China's July Exports Slump 8%. Chinese exports tumbled 8.3% in July, their biggest drop in four months and far worse than expected, reinforcing expectations that Beijing will be forced to roll out more stimulus to support the economy. Exports to the European Union fell 12.3% in July while those to the United States dropped 1.3%. Demand from Japan, another big trading partner, slid 13%. Imports fell 8.1%, according to the data from the General Administration of Customs. China recorded a trade surplus of $43.03 billion for the month, below forecasts of $53.25 billion. (Reuters)

Taiwan July Exports Fall for Sixth Straight Month. Taiwan's exports fell for a sixth straight month in July. Exports last month fell 11.9% from a year ago, better than June's nearly 14% on-year drop. July's bad news was tempered by smaller declines in shipments to China and marginal growth for the U.S. The value of outbound electronics goods fell 2% in July from a year ago, while that for information communication products, a category for smartphone parts, contracted 10%. The two export categories had dropped 11% and 31% on year, respectively in June. (Reuters)

Australia Central Bank Trims Growth Outlook. Australia's central bank softened its economic outlook for 2016 to reflect slower population growth and said the effects of this year’s double interest rate cuts were still working through. The central bank kept this year’s growth forecast at 2.5% but trimmed its 2016 figures to 2.5%-3.5%, from 2.75%-3.75%.The RBA saw underlying inflation remaining well within its 2.0%-3.0% target range for the foreseeable future. (Reuters)

USA

U.S. Economy Adds 215,000 Jobs. The U.S. job market just demonstrated that it may be nearing full health more than six years and the Federal Reserve may be about to raise interest rates. July marked the latest month in a streak of solid hiring, with employers adding 215,000 jobs and the unemployment rate holding at a relatively low 5.3%, the government said Friday. Monthly job growth has averaged 211,286 so far this year, a level suggesting that employers are confident the economy will continue to expand. The government also said employers added a total of 14,000 more jobs in May and June than previously estimated. (AP)

Europe

German Industrial Production Drops. German industrial production unexpectedly decreased in June, highlighting the risks for Europe’s largest economy from weaker growth in emerging-market countries such as China. Output, adjusted for seasonal swings and inflation, fell 1.4% after rising a revised 0.2% in May, data from the Economy Ministry in Berlin showed on Friday. Exports fell 1% while imports dropped 0.5%. German manufacturing output fell 1.3% in June, driven by a 2.6% slump in the production of investment goods. (Bloomberg)

Swiss Foreign Currency Reserves Hit Record. The Swiss National Bank’s foreign-currency reserves rose to record in July, a month when the franc weakened against both the dollar and the euro. The reserves increased 3% to 531.8 billion francs ($542 billion) from 516 billion in June, according to data on the central bank on Friday. The central bank’s foreign currency reserves mushroomed due to interventions it waged to defend its cap on the franc. Despite having abolished the ceiling in January, SNB policy makers said they’re ready to intervene if needed to ensure monetary conditions remain adequate. (Bloomberg)

Arms, Cars Boost French Exports. Strong foreign sales of cars and military equipment helped France narrow its trade deficit in June to the lowest level since mid-2009, figures released by the Customs Office showed on Friday. However separate data showed an unexpected weakening of industrial production by 0.1% in the same month. The June trade deficit fell to 2.7 billion euros from a shortfall of four billion the month before thanks to sales of Airbus planes, satellite systems and "a sharp pick-up" in car Exports. The French economy grew a healthy 0.6% in the first quarter but expectations are already more modest for the second quarter, with between 0.2% and 0.3% targeted. (Reuters)

Currencies

Dollar Falls, but Outlook Still Positive. The dollar slipped against a basket of currencies after touching near a four-month high on Friday, as investors pared bullish bets that a solid U.S. jobs report had pushed the Federal Reserve closer to raising interest rates this year. The dollar index was down 0.2% at 97.650. It earlier rose as high 98.334, its highest level since April 23. The dollar touched two-month peaks against the yen, rising above 125 yen, but was last down 0.5% at 124.13 yen. The euro was up 0.4% at $1.0966. (Reuters)

Commodities

Oil Down, Heads for Sixth Weekly Loss. Crude oil dipped on Friday, plumbing multi-month lows and heading for a sixth straight week of losses, as the approaching end of the U.S. summer driving season suggested a growing surplus in gasoline supply. Brent settled down 91 cents, or 1.8%, at $48.61 a barrel on Friday, after touching a more than six-month low of $48.45. U.S. crude closed down 79 cents, or 1.8%, at $43.87. Brent was down 7% for the week. It fell 23% over the past six weeks. U.S. crude also slid 7% on the week and lost 26% in the last six weeks. (Reuters)

Gold up After U.S. Data. Gold rose on Friday as investors assessed U.S. non-farm payrolls data that may indicate the Federal Reserve will delay an immediate interest rate hike. Spot gold, which hit a session low of $1,082.76 an ounce immediately after the U.S. jobs report, managed to rebound 0.5% to $1,094.54 by 1831 GMT. U.S. gold for December delivery settled up 0.4% at $1,094.10 an ounce. Silver prices rose 1.8% to trade at $14.85 an ounce, as physical demand has boosted the market up from low prices. Spot platinum was up 0.9% at $959 an ounce, while palladium rose 0.5% to $597.97. (Reuters)