Global

Pacific Rim Nations Close in on a Landmark Trade Deal. Pacific trade ministers are optimistic of closing a sweeping Pacific Rim trade deal after progress on Friday on hurdles involving autos, dairy products and intellectual property protections for expensive biologic drugs. Ministers represented in the Trans Pacific Partnership (TPP) talks in Atlanta met for 20 minutes before breaking for negotiators to resume work on specific issues, work that Japan's Economy Minister Akira Amari said on Friday would likely go on all night. The United States and Australia are locked in intense negotiations over the length of time pharmaceutical companies have exclusive rights to produce and market next-generation medicines. Australia is one of a group of half a dozen countries resisting a U.S. push to set a standard of eight years protection and see five years as a red line. (Reuters)

World Bank to Ask Members for Capital Injection. World Bank Group President Jim Yong Kim will ask world leaders for a capital injection as an emerging markets slowdown coinciding with new development goals leave the bank strapped for cash, the Financial Times reported on Sunday. Kim will lobby members to boost capital for the International Bank for Reconstruction and Development during an annual meeting to be held in Peru this week, said the FT. The request for capital would come on the heels of a statement last week from the IMF that deceleration in emerging market economies will slow global growth this year. (Reuters)

Malaysia

Malaysia Facing Triple Challenge over Economy. Malaysia is facing a triple challenge in respect of the economy, says Minister in the Prime Minister's Department, Datuk Seri Abdul Wahid Omar. He described the first of these as a reversal of fund inflow into emerging economies with the uncertainty not being good for the market. He said the second challenge faced was the dependence on commodity exports and highlighted that efforts were being made to diversify the country's export product line. "The third is external and impacts the whole world. It is China's economic slowdown. We have hedged against this by diversifying our trade and mitigating losses,” he added. (Bernama)

Najib Concedes 1MDB's Model 'Too Idealistic'. Prime Minister Najib Abdul Razak has conceded that his brainchild 1MDB model was too idealistic when it relied largely on debt to finance its businesses. "We did not use a lot (of) government funds... only RM1 billion to undertake a huge property development and acquisition of power generation plants.” Najib said this to investors in the US at the Invest Malaysia New York 2015 Partners Session. Najib said an announcement will be made in the coming days to significantly reduce the RM16 billion of 1MDB's debt, including the sale of Edra Global. 1MDB is struggling to repay its US$11 billion in debt. (Malaysiakini)

Asia

Indonesian President Pushing for Lower Fuel Prices, Bank Lending Rates. Indonesia's President Joko Widodo will push for cuts in bank lending rates and fuel prices as part of a package of policy reforms due to be announced next week, the chief economics minister said on Friday. But the central bank governor cautioned that the weak rupiah might make it risky to cut interest charges. The president urged banks to review their costs, such as staff, rent and electricity, and cut lending rates, now among the region's highest, Coordinating Minister for Economics Darmin Nasution told reporters. Widodo also requested state energy firm Pertamina to cut fuel prices, if possible, to help boost purchasing power. (Reuters)

Japan August Household Spending Picks Up. Japan's household spending rose in August for the first time in three months and the availability of jobs improved to its best in more than two decades, which could temper concerns that the economy has fallen into a recession. The 2.9% annual increase in household spending in August amply exceeded the median estimate for a 0.4% YoY rise and followed a 0.2% annual decline in July as more consumers bought cars. (Reuters)

Japan's Job Availability Hits Fresh 23.5-Year High. Japan's jobs market remains about as healthy as it has been for two decades or more, with August's figures showing a slight increase in the jobless rate, but a high level of job availability. The unemployment rate ticked up to 3.4% in August from 3.3% in July, the latter being the lowest level since April 1997. Economists expected the unemployment rate to hold steady. That slight rise comes as job availability continues to climb. The job to applicants ratio rose to 1.23 in August from 1.21 in July. This is the highest level of job availability since January 1992. (Financial Times)

Vietnam Struggles to Sell Bonds as Funding Challenge Mounts. Vietnam has sold only half of the bonds it had hoped to this year, the Finance Ministry said today, complicating efforts to raise funds for spending projects as public debt climbs. Just 127.5 trillion dong (RM25 billion) was raised through government bond auctions in the first nine months of 2015, reaching only 51% of the target, the ministry said. Bonds have been a key source of funds for government spending. (Reuters)

USA

Weak US Jobs Growth Adds to Rate Rise Doubts. America’s jobs juggernaut slowed sharply in September, missing rosy market expectations. The report, which showed that the US economy created 142,000 jobs in September, fell short of the 201,000 gains economists had forecast and was more than two-fifths below the trailing 12-month average, according to the Department of Labor. In a further blow, August’s jobs tally was revised from 173,000 to 136,000 and wage growth flatlined. The figures damped expectations that the Fed would lift interest rates this year, despite commentary from policymakers that the central bank would like to get off the near-zero mark for the first time since the financial crisis. (Financial Times)

Gauge of U.S. Investment Plans down More Than Initially Thought. A gauge of U.S. investment plans slipped more in August than initially estimated, giving a cautionary sign for the economic outlook. New orders for non-military capital goods outside of aviation fell 0.8% in August, the Commerce Department said on Friday. The government had previously reported that this gauge, which is a leading indicator of business investment, had fallen 0.2% during the month. New orders for overall U.S. factory goods fell 1.7% in August. Analysts had expected new orders for factory goods to fall 1.2%. (Reuters)

Fed's Fischer Sees Few Obvious Bubbles in U.S. Economy. Federal Reserve Vice Chairman Stanley Fischer said he doesn’t see immediate risks of financial bubbles in the U.S., while raising concerns that the central bank’s policy tool kit to deal with such occurrences is limited and untested. “Banks are well capitalized and have sizable liquidity buffers, the housing market is not overheated and borrowing by households and businesses has only begun to pick up after years of decline or very slow growth,” Fischer said on Friday. Still, he warned that “potential shifts of activity away from more regulated to less regulated institutions could lead to new risks.” (Bloomberg)

Policy Should Focus on Overall Progress - Fed's Bullard. The Federal Reserve should focus on overall economic improvement rather than snapshots of labor conditions that may miss market forecasts in making its decision whether to raise interest rates, a top U.S. central bank official said on Friday. Bullard will be a voting member of the Federal Open Market Committee, the Fed's policy-setting group, in 2016. Bullard told reporters later it is unrealistic for the U.S. economy to produce more than 200,000 jobs a month indefinitely. (Reuters)

Europe

Eurozone Producer Prices Fall Sharply. The decline in Eurozone producer prices accelerated in August, putting further pressure on the European Central Bank to stem the risk of deflation. Prices at the Eurozone’s factory gates fell 0.8% on the month, their steepest monthly fall since January, the European Union’s statistics agency said Friday. The reductions were more severe than the price declines of 0.6% and 2.4% economists’ had expected. (WSJ)

European Bonds Rally as Falling Consumer Prices Raise QE Bets. Consumer prices in the euro area unexpectedly fell in September, six months after the European Central Bank introduced a quantitative-easing program to stave off deflation. That has bond investors looking toward an account of the latest ECB meeting and retail sales data for signs on whether policy makers will plan more stimulus. European bonds gained this week as consumer prices in the 19-nation currency bloc fell 0.1% from a year earlier, according to a preliminary report published on September 3. Germany’s 10-year bund yield dropped 14 basis points, or 0.14 percentage point, from last week to 0.51%, the most since December 2014. (Bloomberg)

Currencies

Dollar Slumps Broadly on Dreary U.S. Jobs Data. The dollar slumped on Friday, stung by a September U.S. jobs report depicting slower hiring that added to doubts the economy was strong enough for the Federal Reserve to raise U.S. interest rates later this year. The dollar's losses against the euro and Swiss franc topped 1% before partly recovering, and the dollar index was off nearly 0.40% after touching its lowest since September 24. The dollar on Friday hit a three-week low against the yen below 119 yen and was last down 0.1% at 119.82 yen. Against the Swiss franc, the dollar was off 0.70%. The euro was last up 0.3% against the dollar at $1.1230. (Reuters)

Ringgit Depreciates Against Major Trade Partners’ Currencies. The ringgit depreciated against the currencies of Malaysia’s major trade partners, according to Bank Negara Malaysia (BNM). It also said all regional currencies depreciated against the US dollar during the month following strong portfolio outflows from the regional financial markets. According to its statement, the outflows were driven by both regional developments as well as global developments. A key driver of outflows was the prospect of an increase in US interest rates. (The Star)

Commodities

Oil Up, Erasing Early Loss; U.S. Rig Count Down Fifth Week. Crude prices erased early losses to rise by 1% or more on Friday after a report showing the fifth weekly decline in the U.S. oil rig count renewed the debate over falling production in the world's top oil consumer. U.S. energy companies this week cut the number of rigs drilling for oil by 26. It was the largest number of rigs idled in a week since April. Brent settled up $0.44, or nearly 1%, at $48.13 a barrel. U.S. crude rose $0.80, or 1.8%, to $45.54. For the week, Brent was down about 1% while U.S. crude fell slightly. (Reuters)

Gold Shines as Weak U.S. Jobs Data Dents Rate Hike Hopes. Gold jumped more than 2% on Friday as weaker-than-expected U.S. jobs data dented expectations the U.S. Federal Reserve will raise interest rates this year. Spot gold was up 2.1% at $1,136.40 an ounce at 1858 GMT, after rising 2.5% to a session high of $1,141.50. U.S. December gold futures settled up $22.90 an ounce, or 2%, at $1,136.60. Silver jumped 5.6% to $15.27 an ounce, hitting two-week highs for its biggest one-day gain since December. Platinum recovered to $905.24 an ounce, up 0.6%, after slumping to $888, its lowest since December 2008. Palladium was up 3.3% at $695.97 an ounce. (Reuter)