Malaysia

Malaysia's GDP Growth to Weaken to 4.5% in 2016 - Moody's. Moody’s Investor Service sees Malaysia’s GDP growth weakening to 4.5% next year, while maintaining that this year’s GDP will increase 4.8%. In a note on the Asia Pacific region today, Moody’s said weakening sentiment is cooling private sector consumption and investment, compounding soft external demand conditions. The rating agency also adjusted downward, its forecasts for GDP growth for many Asia Pacific sovereigns, as high frequency indicators suggest the pace of economic expansion across Asia Pacific is cooling. (The Edge)

Asia

China Exports Mark Latest Soft Reading for Economy. Weaker demand for Chinese goods in most global markets led to a drop in exports for the second consecutive month. China’s exports fell 5.5% in August from a year earlier in dollar terms, after a drop of 8.3% in July, data from the General Administration of Customs showed Tuesday. Customs said in a statement that China’s exports will continue to face “relatively big pressure” in the fourth quarter. Imports in August fell 13.8% in dollar terms from a year earlier, compared with a 8.1% decrease in July, fueling another significant trade gap, Customs said. China’s trade surplus widened in August to $60.2 billion from $43.03 billion in July. (WSJ)

Japan GDP Growth Revised to 1.2% in Q2. Japan's economy contracted at a 1.2% annual rate in the April-June quarter, according to revised data Tuesday. The figure was better than the preliminary estimate last month of a 1.6% contraction but economists said the general trend is weak. Public investment and private residential investment were the strongest areas of growth in the April-June quarter. Revisions to tax laws have led many property owners to raze old houses for reconstruction, helping boost housing starts. Other areas such as auto registrations and industrial production have been lackluster. (AP)

Japan Posts Largest Current-Account Surplus in Five Years. Japan posted its largest current-account surplus in five years for the month of July, the finance ministry said Tuesday, as a weaker yen boosted income from overseas investments and the nation’s goods-and-services deficit narrowed. The surplus in the current account stood at ¥1.81 trillion ($15.1 billion) in July before seasonal adjustment, the data showed. The nation has posted strong current-account surpluses on the back of strong income from investments overseas, boosted by a weaker yen. (WSJ)

China Economy Weakening Further - OECD. China's economy is losing steam and other big emerging market economies such as Brazil and Russia are also showing signs of weakness, the Paris-based OECD said on Tuesday. While growth in the euro zone looks stable, it seems to be tapering in the U.S., UK and Canadian economies, albeit from relatively high levels for mature economies of their kind, the OECD said in its latest report on a forward-looking indicator it compiles monthly. (Reuters)

China SOE Reform Plan Said to Seek Share Listings, Privatization. China plans to sell shares of some state-owned enterprises and consolidate others in a plan that paves the way for the country’s largest overhaul of its bloated businesses since the late 1990s. China will “forcefully push state-owned enterprises to reform and go public and create conditions for conglomerates to list all their assets,” according to a document jointly issued by the Communist Party Central Committee and the State Council. Government-run companies in competitive sectors must seek more diversified ownership by selling stakes to state and non-state investors, the document showed. (Bloomberg)

Thailand Approves $5.7 Billion Measures to Aid Small Firms. Thailand's military government on Tuesday approved a new round of economic measures worth 206 billion baht ($5.7 billion) to help small and medium-sized businesses (SMEs). The measures include 100 billion baht in seven-year soft loans, which will give the government an interest burden of about 20 billion baht during the period, said Finance Minister Apisak Tantivorawong. The government will set up a 6-billion baht fund to help raise funds for SMEs and provide a 100-billion baht credit guarantee, he said. Existing SMEs will see their income tax cut to 10% from 15% to 20% for two tax years. (Reuters)

USA

US Consumer Borrowing Hits Fresh Record in July. U.S. consumer borrowing climbed to a fresh record in July, the latest evidence that the U.S. economy is on track to grow at a healthy pace in the second half of this year. The Federal Reserve says consumer borrowing rose by $19.1 billion in July, pushing the total to a record $3.45 trillion. This followed an even larger $27 billion increase in June, the biggest one-month gain in credit since November 2001. The June increase was revised up significantly from an initial estimate of $20.7 billion. (AP)

U.S. Small Business Confidence Rises Slightly in August. U.S. small business confidence rose modestly in August, suggesting the economy continued to grow at a steady clip halfway through the third quarter. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index gained half a point to 95.9 last month. The NFIB said the survey of 656 businesses had not been impacted much by the recent turmoil in global financial markets. Five of the index's 10 components increased last month. (Reuters)

Fed Should Wait With Raising Rates - World Bank. The U.S. Federal Reserve should hold off on raising interest rates until the global economy is more stable, the World Bank's chief economist said in an interview with the Financial Times published on Tuesday. “I don’t think the Fed lift-off itself is going to create a major crisis but it will cause some immediate turbulence,” Kaushik Basu was quoted as saying. He said the world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this, it is going to affect countries quite badly. (Reuters)

Europe

Eurozone Economic Growth Revised Higher. The Eurozone economy grew more rapidly than previously estimated in the three months to June, as a pickup in exports offset a slowdown in household consumption and a decline in investment spending. Eurostat on Tuesday said the GDP of the Eurozone’s 19 members increased by 0.4% in the second quarter from the first, having previously estimated that it grew by 0.3%. It also said GDP increased by 0.5% in the first quarter, having previously estimated growth of 0.4%. As a result, GDP was 1.5% higher in the second quarter than in the same period of 2014, up from a previous estimate of 1.2%. (WSJ)

France's Trade Deficit Rises in July. France's trade deficit rose to EUR3.3 billion in July, after narrowing in June to EUR2.8 billion, the French government said on Tuesday. Exports to Asia and the Middle East fell sharply, after airplane deliveries hit a peak in June, the government said. June's narrower deficit also reflected buoyant exports of cars and trains. (MarketWatch)

Currencies

Dollar Mixed as Rallying Stocks Encourage Risk Taking. The dollar was mixed on Tuesday as rallying stock markets and positive German economic data gave global investors reasons to throttle down the risk aversion tactics that recently boosted the euro and yen. The euro recovered from early losses and was last flat against the dollar at $1.1166, while the yen shed 0.6% against the dollar to trade at 120 yen. The euro was down 0.75% against sterling. The dollar index traded in a tight range and was last off 0.15%. (Reuters)

Moody's Says Ringgit Depreciation Manageable. The direct impact of ringgit depreciation is manageable for the sovereign due to the low proportion of government debt denominated in foreign currency, Moody's Investors Service said. Moody’s sees ringgit depreciation as a symptom of declining export revenues, capital outflows, and worsening investor sentiment toward Malaysia. (Bernama)

Depreciation of Ringgit Not Alarming, Says Treasury. The depreciation of the ringgit is not alarming to prompt the government to take panic measures as other currencies are also in the same quandary due to unfavourable global development. Deputy Finance Minister Datuk Chua Tee Yong said the currencies of other bigger economies such Brazil and Turkey also weakened against the US dollar. Chua said the decline of most global currencies was partly due to uncertainty of the US interest rate hike as well as the softening of oil prices. (Bernama)

Commodities

Brent Settles up 4%, Riding Equities Rally. Brent crude settled up 4% on Tuesday as strength in stock markets helped the global oil benchmark recoup the bulk of its losses from the previous session. U.S. crude fell slightly in volatile trade, reopening from Monday's U.S. markets closure for the Labor Day holiday to news of refinery outages. Brent settled up $1.89 at $49.52 a barrel, and was at $49.50 by 2135 GMT in post-settlement trade. It fell $1.98 in the previous session. U.S. crude settled down 11 cents, or almost 0.25%, at $45.94, and was at $45.86 by 4:35 p.m. It had fallen almost $2 earlier in the session. (Reuters)

Gold Edges up after 4-Day Losing Streak as Dollar Retreats. Gold firmed on Tuesday as a retreat in the dollar index helped the metal snap a four-day losing streak, but bullion remained close to 3-week lows as uncertainty over a looming U.S interest rate hike persisted. Spot gold was up 0.2% at $1,121.10 an ounce at 1856 GMT, while U.S. gold futures for December delivery settled down 40 cents at $1,121 an ounce. Silver was up 1.2% at $14.73 an ounce, while platinum was up 1.7% at $1,000 an ounce and palladium was up 1.9% at $586.25 an ounce. (Reuters)