Malaysia

Malaysia Prime Minister Forms Special Economic Committee. Malaysia will establish a special economic team to ensure continued growth, Prime Minister Najib Razak said on Wednesday. The Special Economic Committee comprises nine individuals including CIMB Chairman Nazir Razak; Azman Mokhtar, the managing director of sovereign fund Khazanah Nasional; Maybank CEO Farid Alias; and Andrew Sheng, previously at the Hong Kong Monetary Authority and Malaysia's central bank. Najib said the committee will "formulate strategies to maintain economic growth through domestic and foreign investment". It will report to the prime minister once a week and will function in the short-term until the global economy stablises. (Reuters)

Malaysia Will ‘Ride Out’ U.S. Interest Rate Hike - Zeti. Bank Negara Malaysia (BNM) is confident that the US Federal Reserve's first interest rate increase in nearly a decade will not overwhelm the ringgit that has already lost over a fifth in value versus the US dollar since last year. According to the central bank’s governor, Tan Sri Dr Zeti Akhtar Aziz, the ringgit’s slide to US dollar is more likely caused by the uncertainty resulting from anticipated monetary policy change, rather than the move itself. She said once the US market settles, Malaysia will benefit from the positive development as the economic giant is a major market for its export. Zeti also reiterated today that BNM will not be pegging the ringgit to any currency. (The Malay Mail Online)

Asia

Singapore's Weak July Industrial Output Stirs Recession Fears. Singapore's industrial production in July shrank more than expected from a year earlier, increasing the chances for a technical economic recession and more monetary easing. Manufacturing output fell 6.1% in July from a year earlier, data from the Economic Development Board showed, weaker than the median forecast of a 3.3% drop in a poll. For the month, output rose 1.0%, lagging the median forecast for a 2.7% expansion. The decline was the sixth-consecutive month of contraction for the sector. Benign readings on core inflation coupled with a lacklustre outlook for economic growth have prompted some analysts to predict the MAS will ease its exchange-rated based monetary policy in October. (Reuters)

Japan Government Downgrades Consumer Spending & Exports. Japan's government lowered its assessment of consumer spending and exports in August, a sign that the economy is seeing just a tepid recovery from a contraction in the second quarter. Turmoil overseas could undercut policymakers' efforts to spur inflation with quantitative easing and nurture private sector with business-friendly structural reforms. Consumer spending has reached a plateau, the Cabinet Office said in its monthly report for August, a downgrade from July’s assessment that consumption was showing signs of improving. Exports are weakening, the Cabinet Office said, a downgrade from its assessment in July that exports were flat. (Reuters)

Thailand to Quicken Investments Worth Nearly $47 Billion to Lift Economy. Thailand will speed up investment in 17 mega projects worth nearly $47 billion in fiscal years 2015 and 2016, the new transport minister said on Wednesday, as pressure mounts on the military-led government to revitalise a flagging economy. Arkhom Termpittayapaisith said the government will try to open bids for six dual-track rail projects and a motorway this year, while pushing ahead on four electric train lines. Investments in all the projects will be worth 1.66 trillion baht ($46.66 billion). Separately, Finance Minister Apisak Tantivorawong said the government would offer special incentives to Thai and foreign investors. (Reuters)

Fed Rate Hike Biggest Risk to South Korea's Economy. The biggest risk facing South Korea's economy in the second half of the year is the U.S. Federal Reserve's pending interest rate hike, a Bank of Korea board member said on Wednesday. Chung Hae-bang said that there is a chance global financial markets may move in extremely volatile ways after the hike. Chung said the government and the central bank were preparing responses for future risks, including volatility from economic troubles in China and uncertainties from other emerging market economies. (Reuters)

USA

U.S. Durable Goods Orders up 2%. Orders to U.S. factories for long-lasting manufactured goods rose for a second month in July. The Commerce Department said Wednesday orders for durable goods increased 2% in July after a 4.1% gain in June. The result indicates the U.S. economy is on solid ground. The July increase in orders for durable goods was bigger than economists had been forecasting. They rose even though demand for commercial aircraft fell 6% during the month following a 69.7% surge in June. Orders for machinery rose by 1.5%, and demand for communications equipment increased 1.8%. (AP)

Fed Official Says September Rate Hike 'Less Compelling'. The head of the New York Federal Reserve Bank said Wednesday he's less inclined to support a Fed rate hike in September amid recent global turmoil, including falling oil prices and a slowdown in China. William Dudley said the developments pose downside risks for the U.S. economy and have fueled market volatility. Consequently, the case for the Fed to hike interest rates in September for the first time in nearly a decade is "less compelling to me than it was a few weeks ago," Dudley said. Dudley serves as the No. 2 official on the Federal Open Market Committee. (AP)

Currencies

Dollar Gains for a Second Day. The dollar rebounded for a second straight session on Wednesday as calm returned to financial markets with Wall Street stocks firmer and European shares recouping losses, which reduced the need to buy safe-haven currencies like the yen. In late trading, the euro was down 1.6% at $1.1335. The dollar was up 0.8% at 119.80 yen, having slumped to a 7-month low of 116.16 on Monday. The greenback has been supported as well by data showing that U.S. durables good order rose 2.0% in July, while non-defense capital goods orders increased 2.2% last month, the biggest rise since June last year. (Reuters)

Commodities

Oil Dips as Gasoline Build Offsets Big U.S. Crude Draw. Oil prices fell almost 2% on Wednesday after a huge drawdown in U.S. crude stockpiles was offset by a larger-than-expected build in gasoline and distillates, which include diesel. U.S. crude's front-month contract settled down 71 cents, or 1.8%, at $38.60 a barrel. The front-month in Brent finished down 7 cents at $43.14, after initially trading higher right after the EIA data. Many are bracing for a sustained rise in inventories in the coming months as U.S. refiners shut for seasonal work. (Reuters)

Precious Metals Tumble on Dollar. Gold slipped 2% on Wednesday as the dollar gained and U.S. stocks advanced, while investors kept a close eye on China's efforts to support its economy. Gold's losses hurt sentiment in the more industrial precious metals. Silver fell 5.2% to $13.93 per ounce, its lowest since August 2009. Palladium fell 3.4% to a five-year low of $518.00 per ounce. Platinum turned up 0.3% at $978 an ounce. Spot gold fell as much as 2% to a one-week low of $1,117.35 an ounce, but was down 1.2% at $1,126.66 by 1903 GMT. U.S. gold for December delivery settled down 1.2%, at $1,124.60 an ounce. (Reuters)