Malaysia

Future Finance Needs to Have Stronger Links to Real Economy – Zeti. Future finance needs to have stronger links to the real economy by effectively having an intermediation role that is in the service to society, said Bank Negara Malaysia (BNM). BNM Governor, Tan Sri Dr Zeti Akhtar Aziz, said the financial systems had to be both value-adding and value-based in that they contributed meaningfully by intermediating and facilitating real economic activity to benefit society. Zeti said notably, in many parts of the developing world, it required large amounts of funding to address infrastructure development. She said financial inclusion remained an important agenda to uplift the living standards of the marginalised segments of society in the global community. (Bernama)

Asia

Australia Q2 Economic Growth Hits Lowest in Two Years. Australia experienced the slowest economic growth in two years over the second quarter due in part to a sharp fall in export volumes, official data showed on Wednesday.The Australian Bureau of Statistics said GDP expanded by 0.2% in the second quarter, down from a solid 0.9% the previous quarter. That was the slowest quarterly pace since the first quarter of 2013.The closely-watched measure of real net national disposable income fell 0.7% in the year to June. The GDP result also fell short of the median forecast of 0.4% growth. Exports of goods and services fell 3.3%, while imports eased 0.7%. (Reuters)

China Eases Rules on Multinationals' Foreign Debt Management. China's foreign exchange regulator issued new rules on Wednesday relaxing restrictions on multinational companies' management of their foreign currency-denominated debt in China, allowing them to pool debt from all their subsidiaries for central management. The rules, which take effect immediately on a trial basis, permit these companies to use the local currency yuan liquidity derived from their sales of foreign currency debt to pay back yuan loans and conduct equity investment, the State Administration of Foreign Exchange said in a statement on its website. Analysts see the moves as relieving downward pressure on the yuan by encouraging companies to sell off their foreign currency. (Reuters)

USA

U.S. Mortgage Applications Rise. Applications for U.S. home mortgages rose last week as both purchase and refinancing applications jumped, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, climbed 11.3% in the week ended Aug. 28. The MBA's seasonally adjusted index of refinancing applications rose 16.8% to its highest level since April, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 4.1% to its highest level since July. (Reuters)

Autos and Housing Fueling US Growth – Fed Report. While U.S. housing and auto sales showed strength over the summer, manufacturers were feeling pressure from China's economic slowdown and the oil industry was squeezed by lower energy prices. The Fed said 11 of its 12 regional banks reported that the economy grew at least modestly in July through mid-August. The Fed survey found that real estate activity improved throughout the country, with home sales and home prices climbing in all 12 districts. Auto sales were also a bright spot in most regions. Wages were reported to be "relatively stable" in most regions. (AP)

US Productivity up 3.3% in Spring. U.S. productivity in the spring rose at the fastest pace since late 2013, while labor costs declined. Worker productivity increased at an annual rate of 3.3% in the April-June quarter, the Labor Department reported Wednesday. That was a rebound from the first quarter when productivity had fallen at 1.1%. Labor costs fell at a 1.4% rate in the second quarter, indicating that wages are not rising even as unemployment declines. Even with the strong gain in the second quarter, productivity over the past year has increased by just 0.7%, far below the long-run average of 2.2%. (AP)

Autos Lift U.S. Factory Goods Orders. New orders for U.S. factory goods rose for a second straight month in July on strong demand for automobiles, which could help to keep manufacturing supported as it deals with a strong dollar and softening global demand. The Commerce Department said on Wednesday new orders for manufactured goods increased 0.4% after an upwardly revised 2.2% rise in June. Economists had forecast factory orders rising 0.9% in July after a previously reported 1.8% increase in June. (Reuters)

Europe

UK Construction Growth Inches Up. A pick-up in house building helped growth in Britain's construction sector speed up slightly last month, but the expansion remained weaker than last year's robust rebound, an industry survey showed on Wednesday. The CIPS/Markit construction Purchasing Managers' Index (PMI) rose to 57.3 in August from 57.1 in July, indicating solid growth but below the 57.5 forecast in a poll. The survey published on Wednesday showed construction firms were bullish about the future, with most firms expecting to be busier over the coming year, while only one in 20 expected a contraction. (Reuters)

Currencies

Dollar Pivots to Gains as Equities Steady. The dollar rose on Wednesday as global stock markets steadied and U.S. hiring data encouraged speculation that Federal Reserve policymakers will raise interest rates later this month. The dollar index was last up 0.40% and had added to gains when ADP reported that U.S. private payrolls increased 190,000 last month. The dollar was last up 0.70% against the yen at 120.15 yen, firming from a low of 119.225 yen as calm returned to equity markets. The euro fell 0.7% to $1.1240, having rallied 0.9% on Tuesday when it rose to $1.1332. (Reuters)

Commodities

Oil Turns Higher as Wall Street Rally Offsets Inventory Rise. Oil prices ended nearly 2% higher on Wednesday as rallying equities on Wall Street pulled crude up from lows after futures sank on concerns about global oversupply. Oil continued its recent turbulent trajectory on Wednesday. Brent crude rose 94 cents to settle at $50.50 a barrel, having recovered from a $47.74 low. It reached $51 post-settlement. U.S. crude rose 84 cents to settle at $46.25, after falling to $43.21 and reaching $46.77. (Reuters)

Gold Eases after 4-Day Gain. Gold eased on Wednesday as a rebound in stocks and the dollar arrested a four-day rise, with uncertainty over the timing of a looming U.S. rate hike limiting price moves. Gold also came under pressure from the 0.5% rise of the dollar index. Spot gold was down 0.5% at $1,134 an ounce at 1848 GMT, while U.S. gold futures for December delivery settled down 0.5% at $1,133.60. Of the precious metals, palladium has been the most volatile and rose 3.4% to a session high at $586.50 an ounce after Tuesday's 5.3% tumble. Silver was up 0.5% at $14.64 an ounce and platinum was up 1% at $1,010.24. (Reuters)