Global

China, Brazil among Emerging Markets at Risk of Bank Crisis. Credit growth in China, Brazil and Turkey doesn’t only risk spurring a hangover in bad debt -- it also signals a banking crisis is on the horizon, according to the Bank for International Settlements. A ratio of credit to gross domestic product, a measure of how much private-sector credit has deviated from its long-term trend, stands at 25.4% in China, BIS said in a report. That’s the highest of any major economy and compares with 16.6% in Turkey and 15.7% in Brazil. Non-performing loans in the country in the first quarter climbed by the most since that data became available in 2004, reaching 982.5 billion yuan. (Bloomberg)

Malaysia

New Economic Measures to Restore Confidence, Stabilize Capital Market. Prime Minister Datuk Seri Najib Tun Abdul Razak announced a slew of measures to support the domestic economy, stabilize the capital market, and in the due process restore investor confidence and ringgit’s strength. The PM, who is also the Finance Minister, reassured that there is no need to re-introduce capital controls and re-peg the ringgit, adding that the current economic conditions were far better than during the Asian Financial Crisis of 1997/98. Both the banking system and the capital market, the PM added, are now more resilient and able to cope with economic uncertainty. (Economic Viewpoint: New Economic Measures)

Khazanah to Inject RM6.77 Billion in Domestic Investments. Khazanah Nasional Bhd will inject RM6.77 billion in domestic investments to support the government’s economic measures announced by Prime Minister Datuk Seri Najib Razak yesterday. The strategic investment fund said in a statement it has identified projects that are incremental to investment plans announced previously. The projects include Desaru Coast Destination Resort with a development cost of about RM4.5 billion between now and 2017 to 2022; a new tourism venture fund of RM50 million for qualified tourism entrepreneurs in the sub sectors of eco-tourism and cultural/heritage tourism and new hospitals and extension of existing hospitals under IHH Healthcare Bhd costing approximately RM670 million between 2015 and 2017. (The Edge)

Asia

India's Inflation Eases, Adding Rate-Cut Pressure on Rajan. India’s two main inflation gauges showed a continued easing, adding pressure on central bank Governor Raghuram Rajan to cut interest rates for a fourth time this year. Consumer price inflation, the central bank’s benchmark, eased to 3.66% in August from a revised 3.69% -- below the central bank’s target of 6% by January for a 12th straight month. Wholesale prices fell 4.95% in August from a year earlier after slipping 4.05% in July, the Commerce Ministry said in a statement on Monday. The median of 32 economists in a survey had predicted a 4.4% decline. (Bloomberg) 

Australian PM Tony Abbott Ousted by Rival. Australia is to have a new prime minister after Tony Abbott was ousted as leader of the centre-right Liberal Party by Malcolm Turnbull. In the dramatic late night party leadership ballot, Mr. Abbott, who had been plagued by poor opinion polls, received 44 votes to Mr. Turnbull's 54. Mr. Turnbull said he assumed that parliament would serve its full term, implying no snap general election. The new party leader said Australia needed to have the economic vision, a leadership, that explains the great challenges and opportunities Australia faces". (BBC)

China Sells Record FX in August, Shows Pressure After Devaluation. China's central bank and commercial banks sold a net 723.8 billion yuan ($113.69 billion) of foreign exchange in August, by far the largest on record, highlighting how capital outflows intensified in the wake of the yuan's devaluation last month. The previous largest outflow, in July, totaled 249.1 billion yuan ($39.13 billion). The figures are based on calculations using central bank data. The figures show the price China is paying to keep its currency from falling further in the face of concerns about the health of the economy. (Reuters)

USA

Americans See Less Inflationary Pressure - NY Fed Survey. Americans predicted lower inflation last month, according to a Federal Reserve Bank of New York survey published as Fed policymakers prepare to decide whether the U.S. economy is ready for tighter monetary policy. The survey of consumer expectations found that median expectations of inflation three years in the future fell to a record low of 2.87% from 2.96% the previous month. The one-year expectation was also down, to 2.79% from 2.96%. The central bank wants to be reasonably confident that prices will rebound in order to hike interest rates. (Reuters)

Europe

Euro-Area Industrial Production Increases Most Since February. Euro-area industrial production rose more than economists estimated in July as output jumped in three of the region’s four largest economies. Production in the 19-nation currency bloc increased 0.6% from June, when it dropped a revised 0.3%, the European Union’s statistics office in Luxembourg said on Monday. That’s the strongest rate since February and twice as much as economists predicted in a survey. On the year, output was up 1.9%. Industrial output rose 0.5% in Germany, 0.6% in Spain and 1.1% in Italy, according to the report. (Bloomberg)

Currencies

Dollar Firm as Traders See Low Chance of U.S. Rate Hike. The dollar held close to a three-week low against a basket of major currencies on Monday in advance of this week's Federal Reserve meeting, as investors bet interest rates would be kept at their record lows until at least December. The dollar index edged up 0.1% at 95.249 after hitting a low of 94.913, its weakest since Aug. 26. The dollar was down 0.4% against the yen at 120.04 yen, while the euro fell 0.3% against the greenback at $1.1313 on light trading volume. (Reuters)

Commodities

Oil Down 3% as Gasoline Pressures Market; Traders Eye Fed. Crude oil fell more than 3% on Monday, dragged down by a tumble in gasoline and apprehension about whether the United States will have its first interest rate hike in nearly a decade. U.S. crude was down 75 cents at $43.88 a barrel by 1636 GMT after declining to as low as $43.59. Brent was off $1.58 at $46.56, versus a session low at $46.36. Should the rate hike occur, analysts expect oil to fall, as a stronger dollar would undermine demand from importing countries. (Reuters)

Gold Inches Higher as Fed Meeting Nears. Gold turned slightly higher on Monday, clawing above the prior session's one-month low on uncertainty ahead of a Federal Reserve policy meeting that will be scrutinized for clarity on when the U.S. central bank will raise interest rates. Spot gold was up 0.1% at $1,109 an ounce by 1915 GMT. It had fallen to $1,098.35 on Friday, the lowest since Aug. 11. U.S. gold for December delivery settled up 0.4% at $1,107.70, but was also close to its lowest in a month. Other precious metals remained under pressure, with silver down 1.6% at $14.38 an ounce and platinum falling 1.1% to $954 an ounce. Palladium fell 1.3% to $584.50. (Reuters)