Malaysia

Petronas to Draw on Reserves to Meet Dividend Commitments. Malaysia's Petroliam Nasional Bhd (Petronas) on Friday said cash from operations will cover neither capital expenses nor committed dividends for 2015, forcing the state-owned oil firm to draw on reserves and further cost savings. "We will have to persevere with more austerity measures," said Petronas President and Group Chief Executive Wan Zulkiflee Wan Ariffin at an earnings briefing. Petronas said net profit fell 47 percent to 11.1 billion ringgit ($2.73 billion) in April-June due to weaker crude oil prices as well as lower sales of oil and liquefied natural gas. Still, "all the plans are in place" to meet the 26 billion ringgit dividend promised to the government this year, Wan Zulkiflee said. (Reuters)

Asia

Japan's Q2 GDP shrinks annualised 1.6%. Japan's economy shrank at an annualised pace of 1.6 percent in the April-June period, contracting for the first time in three quarters on weak exports and consumer spending, government data showed on Monday. The preliminary reading for gross domestic product compared with the median estimate of a 1.9 percent contraction in a poll of economists. It followed a revised 4.5 percent expansion in the first quarter. On a quarter-on-quarter basis, GDP contracted 0.4 percent in April-June.

India’s Economic Reform Agenda Hits Roadblocks. Indian Prime Minister Narendra Modi’s ambitious reform agenda has stalled with crucial bills stuck in India’s parliament, which ended its latest session this week in bitter uproar. After sweeping to power 15 months ago, Modi’s right-wing government promised a string of business-friendly reforms to attract foreign investment and revive the economy. But the opposition has blocked flagship tax and land reforms with rowdy protests in parliament. The government is desperate to pass a bill paving the way for a landmark national sales tax to replace a myriad of complex state and national levies and boost the economy. (AFP)

India Wholesale Inflation at Record Low. India’s wholesale prices dropped more than estimated, in line with retail inflation, adding pressure on central bank Governor Raghuram Rajan to cut interest rates. Wholesale prices fell 4.05% in July from a year earlier, the Commerce Ministry on Friday, the steepest fall since 2005. The median of 33 estimates in a survey of economists predicted a 2.9% decrease. Easing price pressures and a slide in China’s yuan has increased speculation that Rajan would cut interest rates for a fourth time this year. (Bloomberg)

Taiwan Cuts 2015 GDP Growth Forecast on Slowing Exports. Taiwan on Friday slashed its economic growth outlook this year to a six-year low over expectations exports will fall further than previously estimated. Gross domestic product should grow 1.56 percent in 2015, said the Directorate General of Budget, Accounting and Statistics, sharply lower than the 3.28 percent growth it had estimated in May. It was the second time the island's chief statistics agency revised lower its GDP growth forecast for this year. Exports are seen contracting 7.1 percent this year, worse than a previously forecast decline for 2.62 percent, the government agency said. (Reuters)

Hong Kong Posts Steady Q2 GDP, Raises 2015 Outlook. Hong Kong's economy kept a solid footing in the second quarter bolstered by private consumption, with the government raising its 2015 growth outlook even as tourism and exports slowed. The upbeat data surprised markets, given Hong Kong's sluggish retail sales and persistent headwinds from mainland China's volatile financial markets and economy. The economy grew a seasonally adjusted 0.4 percent in the three months to June compared with revised 0.7 percent growth in the first quarter. From a year earlier, the economy expanded 2.8 percent in the second quarter. (Reuters)

USA

Industrial Output Jumps as Auto Production Surges. U.S. industrial output advanced at its strongest pace in eight months in July as auto production surged. Industrial production shot up 0.6% last month after a downwardly revised increase of 0.1% in June, the Federal Reserve said on Friday. Economists had looked for a gain of just 0.3% last month. The gain in output reflected a 0.8% increase in factory production that was spurred by 10.6% surge in motor vehicle output. The step up in overall production percentage of industrial capacity in use up to 78.0% in July in line with forecasts (Reuters)

Consumer Sentiment Slips in August. U.S. consumer sentiment eased more than expected in August. The University of Michigan's preliminary August reading on the overall consumer sentiment index came in at 92.9, down from the final reading of 93.1 in July. It was also below the median forecast of 93.5 among economists polled by Reuters. The survey's barometer of current economic conditions was steady at 107.1 from 107.2 in July. The survey's gauge of consumer expectations slipped to 83.8 from 84.1 in July and the lowest since November 2014. (Reuters)

Europe

Eurozone GDP Grows Less Than Expected. The Eurozone economy grew by less than expected in the second quarter, the European Union's statistics office said on Friday. GDP in the 19-country euro area grew by 0.3% QoQ in the April-June period for a 1.2% YoY rise. Economists polled by Reuters had expected a 0.4% quarterly expansion and a 1.3% annual gain. Separate data also confirmed that annual inflation was 0.2% in July, stable compared with June, but still far off the near 2% sought by the ECB (Reuters)

German Second Quarter Growth Solid. German growth accelerated in the second quarter of 2015 but by less than expected, with foreign trade acting as a support and investment braking Europe's largest economy. German GDP grew 0.4% in the quarter between April and June after expanding by 0.3% in the first three months of 2015. The consensus forecast for the second quarter in a Reuters poll was for 0.5% growth. The Statistics Office said exports rose much more strongly than imports in the second quarter, supported by the weak euro. (Reuters)

French Economy Stagnates. France’s economy stagnated in the second quarter as European Central Bank stimulus and lower oil prices failed to revive investment and consumer spending. GDP was unchanged after increasing a revised 0.7% in the previous three months, the country’s statistics office said Friday. Economists had forecast a 0.2% gain, according to a Bloomberg survey. President Francois Hollande is cutting corporate taxes to give breaks to businesses in an effort to revive growth and lower unemployment in the euro area’s second-biggest economy. (Bloomberg)

Greek PM Tsipras Wins Bailout Vote. Greek Prime Minister Alexis Tsipras confronted a widening rebellion within his party as parliament voted to approve the country's third financial rescue by foreign creditors in five years. Eurozone finance ministers are expected to approve the vital aid for Athens later on Friday. The 85 billion euro ($95 billion) bailout program easily passed with 222 votes in the 300-seat chamber. Tsipras defended the decision to accept a program that comes at the price of tax hikes, spending cuts and economic reforms, saying it was a choice between "staying alive or suicide". (Reuters)

Currencies

Encouraging U.S. Data Support Dollar. The dollar inched up on Friday against a basket of currencies on encouraging data on U.S. producer prices and industrial output, while the euro ended a good week on a weak note even as the Greek parliament approved a new bailout agreement. The dollar index was up almost 0.1% on the day at 96.670, finishing the week with a 1% loss, its steepest decline in nine weeks. The greenback dipped 0.1% at 124.28 yen, ending the week marginally higher. The euro was down 0.3% at $1.1110, paring its weekly gain against the greenback to 1.3%. (Reuters)

Commodities

U.S. Crude Edges up from 6.5-Year Low. U.S. crude oil edged higher after falling to a fresh 6.5-year low on Friday, posting a seventh weekly loss amid concerns over global oversupply, while Brent futures slipped as the front-month September contract approached expiration. U.S. crude settled at $42.50 a barrel, up 27 cents, and continued to seesaw in post-settlement trade. It reached $42.96 after falling to $41.35 and finished off more than 3% for the week. Expiring Brent September crude fell 19 cents to settle at $49.03, but gained nearly 1% for the week. (Reuters)

Gold Turns Lower as Dollar Rises. Gold turned slightly lower on Friday as the dollar shifted higher on encouraging U.S. data and as investors weighed the impact of China's currency intervention on the timing for the first U.S. interest rate increase in nearly a decade. Spot gold was down 0.2% at $1,112.36 an ounce 1805 GMT after hitting $1,126.31 on Thursday, its highest since July 20. U.S. gold for December delivery settled down 0.3% at $1,112.70 an ounce. Spot silver saw deeper losses of 1.7% to a session low of $15.15 an ounce. Spot palladium fell 0.3% to $615.50 an ounce after touching a two-week high on Thursday. Platinum was down 0.4% at $987.74 an ounce. (Reuters)