Malaysia

Moody’s: Clouds Gathering on Malaysia’s Positive Outlook. Clouds are gathering on Malaysia's positive outlook on government bond and issuer ratings, Moody's Investors Service said today. Moody's vice-president and senior analyst of sovereign risk Christian de Guzman said while the Malaysian government's fiscal consolidation – the lynchpin of the agency's decision to reaffirm its sovereign ratings for Malaysia – remained intact, underlying factors have changed. He said the economic, external and political factors have all increased, putting the trend of fiscal consolidation in doubt. De Guzman said among the underlying factors that have changed was the deteriorating growth outlook among emerging economies because of concerns of slower growth in China, lower commodity prices and high capital movement which has manifested in lower foreign exchange reserves and a weaker ringgit. (The Edge)

Malaysian Sukuk Curve Steepens as Inflation Adds to Outflow Risk. Malaysia’s Islamic bond investors are fleeing longer-dated sukuk as accelerating inflation adds to the risk of outflows. The difference in yields between 2025 Shariah-compliant securities and three-year debt widened 14 basis points this year to average 67 in August, the most since May 2014.. Offerings of Islamic bonds in Malaysia dropped to a five-year low in 2015 as an 18% plunge in the ringgit and a collapse in oil prices made it hard to gauge earnings prospects. Yields on 10-year ringgit-denominated Shariah-compliant notes climbed 16 basis points this year to 4.43%, near the record 4.44% reached in December 2013. (Bloomberg)

Malaysia Signs AIIB Agreement. Malaysia, one of the 57 prospective founding members of the China-led Asian Infrastructure Investment Bank (AIIB), has signed the Articles of Agreement (AOA) for the entity here on Aug 21. In a statement Thursday, the Malaysian Embassy here said Malaysia was among seven countries which did not sign the agreement on June 29. A total of 50 prospective founding members of the AIIB had signed the agreement then. The statement said Malaysia's Ambassador to China, Datuk Zainuddin Yahya, signed the agreement on behalf of Malaysia at a brief ceremony held at the Chinese Foreign Ministry. (Bernama)

Najib Meets Corporate Top Guns to Discuss Economy. Prime Minister Datuk Seri Najib Razak has met with the top figures of government-linked companies and financial institutions to discuss the country’s current economic situation and the sliding of ringgit. Najib said he had a discussion with the chairmen, CEO and senior officers of government-linked investment companies, which are KWAP, KWSP, Lembaga Tabung Haji, Petronas, Permodalan Nasional Berhad and Khazanah. He said the opinions given by the corporate leaders will be examined by him and the newly-formed Special Economic Committee. (New Straits Times)

Asia

Japan Core Consumer Price Index Flat in July. Consumer prices in Japan were unchanged from a year earlier in July, defying expectations for a fall. The core consumer price index (CPI), which excludes volatile prices of fresh food but includes prices of oil products, was flat in July from the year-ago period, government data showed on Friday, compared with forecast for a drop of 0.2% and down from a 0.1% rise in June. Household spending fell 0.2% from the year before, versus expectations for a 1.3% climb and after declining 2.0% in the previous month. The BoJ expects to lift inflation to 2% during the April-September first half of next fiscal year. (Reuters)

China Slowdown Unlikely to Hit Japan Exports - Kuroda. China's economic slowdown should not harm Japan's exports very much in coming years, and falling oil prices will not stop the Bank of Japan from hitting its inflation target, BOJ Governor Haruhiko Kuroda said on Wednesday. Kuroda said that this is because China will maintain 6 to 7% growth and Japanese capital goods are quite competitive. He also said that an interest rate hike by the Federal Reserve would be a vote of confidence in the U.S. economy, and a positive for the Japanese economies. (Reuters)

Thai July Exports Fall for 7th Month. Thailand's exports shrank for the seventh successive month in July, suggesting a key engine of the economy is unable to fire up. Exports in July dropped 3.56% from a year earlier, the Commerce Ministry said on Thursday. A poll had forecast a 3.85% drop after exports fell 7.87% in June, the biggest annual fall since late 2011. Ministry official Somkiat Triratpan told a news conference exports had improved following higher auto shipments in July, with the baht also helping. (Reuters)

China Eases Housing Investment Rules for Foreigners. China has relaxed its property investment rules for foreigners across the country, a government statement showed on Thursday. Foreign institutional investors no longer had to pay registration fees when taking out domestic and foreign loans to finance their property purchases or when settling foreign exchange transactions. Foreign individuals and companies were now free to buy as many properties as they wished, as long as they stay within the limits of local housing purchase limits. Previously, foreign residents were allowed to own no more than one property in mainland China, and only after they had worked in the country for a year. (Reuters)

Philippine Economy Grew 5.6%. The Philippine economy grew by 5.6% in the second quarter from a year ago, slightly below the government's target, officials said Thursday. The figure brings growth in the first six months to 5.3%, down from 6.2% for the same period a year ago. The economy grew 5% in first quarter. Economic Planning Secretary Arsenio Balisacan said the government is now likely to miss its 2015 full-year growth target of 7 to 8%, with 6 to 6.5% growth looking more realistic. He said the second-quarter figure reflects a boost in government spending, especially public construction, which grew 20% from a 24% contraction in the first quarter. (AP)

Indonesia Promises Policy Package Soon for Rupiah, Economy. Indonesia will soon unveil a policy package aimed at propping up the fragile rupiah and helping an economy growing at its slowest pace in six years, senior government officials said on Thursday. The package is expected to add to tax incentives announced on Monday aimed at promoting selected activities including oil refineries and infrastructure. Finance Minister Bambang Brodjonegoro said the coming Indonesian package is to increase foreign exchange reserves as well as keeping economic stability, including addressing purchasing power. He noted there would be a mixture of tax incentives and other policies. (Reuters)

USA

US Economic Expansion Revised up to 3.7%. The US began the second half of the year on a much stronger footing than first estimated. Economic expansion quickened to a 3.7% annualised pace in the second quarter of the year, according to a second estimate released from the Commerce Department. That's higher than an initial estimate of 2.3% and and better than the 3.2% forecast by economists. For the second quarter revision, higher business spending and a quicker buildup of inventories by businesses helped improve the pace of expansion. (Financial Times)

Applications for US Jobless Aid Drop. Fewer people sought U.S. unemployment benefits last week, evidence that employers are laying off few workers. The Labor Department said Thursday that weekly applications for unemployment aid dropped 6,000 to a seasonally adjusted 271,000. The four-week average ticked up 1,000 to 272,500. Earlier this month, the four-week average stood at 266,000, the lowest since April 15, 2000. For now, the data suggests hiring has remained solid this month. The number of people receiving unemployment aid rose 13,000 to 2.27 million. That figure has fallen 10% in the past year. (AP)

Europe

Eurozone Lending Picks up. Lending to Eurozone households and firms accelerated slightly in July, European Central Bank data showed on Thursday. Lending growth to households picked up to 1.9% in July from 1.7% a month, demonstrating resilience in the face of a slowdown in China. Credit to companies accelerated to 0.9% from 0.2%, the data showed. Lending to companies has been improving since late 2014, helped by the ECB's quantitative easing. The M3 measure of money circulating in the euro zone grew by 5.3% in July, the best reading since April. (Reuters)

U.K. House Price Growth Cooled. U.K. house price growth slowed in August in a sign values are stabilizing, according to Nationwide Building Society. Prices rose 0.3% from July to an average 195,279 pounds ($302,000), the lender said in a statement on Thursday. The annual pace of growth slowed to 3.2%, the lowest since June 2013, in part due to unusual strength in the annual measure of prices gains in August last year. Home values may be settling around the level of earnings growth, which historically has been about 4%, Nationwide Chief Economist Robert Gardner said in the statement. (Bloomberg)

Currencies

Dollar Firms for Third Day. The dollar rose for a third consecutive session on Thursday, bolstered by data showing a much stronger U.S. economy than had been thought and by gains in global equities. U.S. data showed falling jobless claims and a faster growth rate than had initially been estimated. In late trading, the dollar index was up 0.5% at 95.589. The index has risen roughly 2.4% the last three days. The dollar was up 0.6% at 120.60 yen, well above a seven-month low of 116.15 yen struck this week. The euro was 0.4% lower against the dollar at $1.1270, well below this week's seven-month high of $1.1715. (Reuters)

Commodities

Oil Soars Over 10%. Oil rocketed more than 10% higher on Thursday, posting its biggest one-day rally in over six years as recovering equity markets and news of diminished crude supplies set off a short-covering scramble by bearish traders. Front month Brent crude for October was up $4.42 to settle at $47.56 a barrel, marking a 10.25% rise. The contract traded on Monday at a March 2009 low of $42.23. U.S. crude settled up $3.96, or 10.3%, at $42.56 per barrel, its biggest one-day% gain since March 2009. It had hit a February 2009 low of $37.75 on Monday. (Reuters)

Gold Down for 4th Day. Gold eased on Thursday, headed for its biggest weekly rout since March, as upbeat U.S. growth and jobs data drove up stocks and the dollar. Spot gold was down 0.2% at $1,122.86 an ounce at 1829 GMT after seeing its biggest down day in five weeks on Wednesday. U.S. gold futures for December delivery finished down $2 an ounce at $1,122.60. Silver was up 2.2% at $14.42. Palladium was up 5.3% at $560.50 an ounce after setting a five-year low on Wednesday. Platinum was up 1.5% to $992 an ounce. (Reuters)