Asia

China July Loan Growth Surprises. Chinese banks extended a surprisingly robust 1.48 trillion yuan ($238.4 billion) in new loans in July but economists said the numbers may have been distorted by Beijing's massive rescue package for the slumping stock market and other policy measures. New bank lending has been weak for much of this year despite interest rates cuts. New yuan loans in July trumped the previous month's lending of 1.28 trillion yuan while broad money supply expanded an annual 13.3%, faster than June's 11.7%. Outstanding yuan loans grew at 15.5% by month-end, faster than expectations for a rise of 13.6%. (Reuters)

Japan All Industry Activity Falls Less Than Expected in May. Japan's all industry activity declined at a slower-than-expected pace in May, figures from the Ministry of Economy, Trade and Industry showed Wednesday. The all industry activity index fell 0.5% month-over-month in May, in contrast to April's 0.1% slight increase. Economists had expected a 0.6% decrease for the month. The index measuring industrial production dropped 2.0% and construction activity index slipped by 0.4%. The tertiary activity index also decreased 0.7% in May. On an annual basis, the all industry activity index declined 0.4% in May. (RTT News)

USA

U.S. Small Business Confidence Bounces Back in July. U.S. small business confidence rebounded in July from a 15-month low as owners anticipated solid sales and inventory growth. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index increased 1.3 points to 95.4. About 1,495 businesses took part in the survey. Seven of the index's 10 components increased last month, while three continued to decline. Owners were upbeat about business conditions over the next six months. (Reuters)

U.S. Wholesale Inventories up Solidly. U.S. wholesale inventories rose more than expected in June. The Commerce Department said on Tuesday that wholesale inventories increased 0.9% as a rise in oil prices boosted the value of petroleum stocks. Wholesale stocks were revised to show a 0.6% rise in May instead of the previously reported 0.8% increase. Economists polled by Reuters had forecast wholesale inventories rising 0.4% in June. The stronger-than-forecast wholesale inventories data for June suggests that second-quarter GDP will be revised high. (Reuters)

U.S. Productivity Rises in Second Quarter. U.S. non-farm productivity rebounded in the second quarter, but a weak underlying trend suggested inflation could pick up more quickly than economists have anticipated. Productivity increased at a 1.3% annual rate in the April-June period, the Labor Department said on Tuesday. But productivity, which measures hourly output per worker, rose only 0.3% from a year ago. First quarter productivity was revised to show it falling at a 1.1% rate instead of the previously reported 3.1% pace of decline. (Reuters)

Europe

Greece, Lenders Clinch Bailout Deal. Greece and its international lenders clinched a multi-billion-euro bailout agreement on Tuesday after marathon talks through the night, officials said, raising hopes aid can be disbursed in time for a major debt repayment due next week. Two sides had agreed on terms of the three-year agreement barring a couple of minor issues being ironed out. The pact is expected to be worth up to 86 billion euros ($94.75 billion) in fresh loans for debt-ridden Greece. During talks that dragged through Monday night, the sides reached agreement on the three main sticking points - dealing with non-performing loans held by banks, setting up an asset sales fund, and deregulation of the natural gas market. (Reuters)

German Investor Confidence Unexpectedly Drops. German investor confidence unexpectedly fell, signaling concern that a global slowdown could weigh on Europe’s powerhouse economy. The ZEW Center for European Economic Research said its index of investor and analyst expectations, which aims to predict economic developments six months ahead, slid to 25 in August from 29.7 in July. The reading is the lowest since November and compares with a median estimate of 31.9 in a survey of economists. Growth in German GDP accelerated to 0.5% in the second quarter, according to the median estimate in a Bloomberg survey of economists. (Bloomberg)

Yuan Devaluation Exposes European Exporters. European exporters glimpsed the possible progressive erosion of benefits from the weak euro on Tuesday, as China's surprise devaluation made foreign goods more expensive for its consumers and corporate customers. European companies have benefited from the euro's weakness making their products cheaper abroad. China is the second-biggest buyer of EU goods after the United States, accounting for 14% of exports from the trade bloc last year, according to Eurostat. Sectors with the highest exposure are basic resources, personal and household goods, technology, chemicals and autos. (Reuters)

Currencies

Dollar Rises Broadly. The dollar strengthened broadly Tuesday as investors bought haven assets after China’s central bank devalued its currency. The Wall Street Journal Dollar Index, which measures the greenback against a basket of 16 widely traded currencies, increased 0.4% to 88.99. The dollar fell 0.2% against the euro to $1.1041. The greenback increased 0.4% against the yen to ¥125.10, on pace to close at a two-month high. (WSJ)

Ringgit Falls Most in Seven Weeks on Surprise China Devaluation. Malaysia’s ringgit fell the most in seven weeks as the biggest decline in the yuan in two decades triggered losses across Asia. The ringgit retreated 0.8% for a fifth day of losses to 3.9600 a dollar, according to prices from local banks compiled by Bloomberg. It earlier fell to 3.9605, the lowest level since August 1998, and is down almost 20% in the past 12 months. The ringgit dropped 1.9% to 6.2090 versus the British pound. It reached a record low of 2.8506 to the Singapore dollar. (Bloomberg)

Yuan in Biggest Fall since 1994. The yuan suffered its biggest fall in over two decades on Tuesday, hitting a three-year low after the Chinese central bank surprised markets by devaluing it by almost 2%. China devalued its currency on Tuesday after a run of poor economic data, a move by which some suspect could be the beginning of a longer-term slide in the exchange rate. Economists said the timing suggested it was aimed at boosting the competitiveness of the world's second-biggest economy. Spot yuan tumbled around 2% to as low as 6.3360, the weakest since September 2012 and the biggest drop since the currency was officially devalued in 1994. (Reuters)

Commodities

U.S. Crude Ends at Six-Year Low. U.S. crude settled at a more than six-year low on Tuesday after China's currency devaluation raised questions about oil demand in the No. 2 consumer and a new OPEC estimate showed non-member producers are likely to keep output high. U.S. crude fell $1.88, or more than 4%, to $43.08 a barrel, its lowest settlement since March 2009. Brent fell $1.23, or 2.4%, to $49.18 a barrel. (Reuters)

Gold at Three-Week High. Gold rose to a three-week high on Tuesday as global stocks fell, and investors assessed the impact of China's nearly 2% devaluation of its currency and move to prop up its economy. Spot gold rebounded to a three-week high of $1,119 before trading up 0.4% at $1,108.66 an ounce by 1914 GMT. U.S. gold for December delivery settled up 0.3% at $1,107.70 an ounce. Spot platinum fell 0.2% to $982.25 an ounce and palladium fell 1.5% to $598.50. Silver was up 0.7% at $15.30 an ounce. (Reuters)