Global

IMF's Lagarde Says May Have to Look at Reform Alternatives. IMF chief Christine Lagarde said the global lender may push ahead with interim steps to give emerging markets a bigger say. Reforms agreed in 2010 would put Brazil, China, India and Russia among the fund's top 10 shareholders, but they still need approval from the U.S. Congress, frustrating emerging markets and prompting warnings from Europe about the dangers of U.S. isolation. IMF policymakers have said they will come up with ideas on how to push ahead with reform by mid-December. One option is an ad hoc increase to the quota for key emerging economies, without requiring any change in the U.S. position. (Reuters)

IMF Told That No Room for Mistakes by Central Banks. Central banks have little room for error in a low-growth world in which over-leveraged and commodity-dependent emerging economies and a slowing China are major risks, top international financiers told the IMF’s meeting. Despite $7 trillion in quantitative easing from banks in industrial nations since the global financial crisis, the world is stuck in a "new mediocre" growth pattern, IMF chief Christine Lagarde said. "It is not the kind of economy in which you can make a mistake," Bank of England Governor Mark Carney told the meeting. (Reuters)

Malaysia

Malaysia to Use State Funds to Lift Stocks, Rules Out FX Intervention. Malaysia will use its state funds to put a floor under the country's battered stock market, though currency intervention and interest rate hikes are ruled out as tools to keep sharp falls in the ringgit in check, its deputy finance minister said. He stressed that the government does not see an immediate need to take steps to defend the ringgit and will leave markets to determine its levels. An interest rate hike by Malaysia's central bank is also ruled out as an option to rein in declines in the ringgit as it would hurt households with high debt and cool consumption, Datuk Johari Abdul Ghani said. (Reuters)

BNM Revokes Approvals for 1MDB's RM7.5b Fund Transfers. Bank Negara Malaysia revoked three permissions granted to 1MDB under the Exchange Control Act 1953 (ECA) for investments abroad totalling US$1.83 billion (about RM7.5 billion at the current exchange rate). The central bank said in a statement that it also issued a directive under the Financial Services Act 2013 to 1MDB to repatriate the amount of US$1.83 billion to Malaysia and to submit a plan to it for this purpose. The statement was made in response to a statement by the attorney-general that 1MDB had done no wrong with respect to the investigation by Bank Negara into 1MDB. (Malaysiakini)

Asia

BOJ's Kuroda Blames Low Inflation on Oil, Sees No Imminent Need for Easing. Bank of Japan Governor Haruhiko Kuroda on Friday blamed slumping oil costs for keeping inflation low in many advanced nations, stressing that he saw no immediate need for countries to deploy additional fiscal and monetary steps to stimulate growth. But he said central banks of advanced economies, including the BOJ, must maintain their ultra-easy policies and stand ready to act with inflation well below their targets. Kuroda said that while some nations were suffering from capital outflows, many have sufficient buffers to weather the market turmoil. (Reuters)

China to Intensify Crackdown on Illegal Money Transfers to Fight Corruption. China will step up its crackdown on illegal cross-border money transfers conducted by underground money dealers and offshore companies, as part of efforts to fight corruption. Authorities, including the People's Bank of China (PBOC), State Administration of Foreign Exchange (SAFE) and the police, will intensify measures to clampdown on illegal money outflows, the PBOC said in a statement on its website. The crackdown is also seen aimed at curbing speculative money flows. (Reuters)

Philippine Exports Fall by Most in 4 Months. Philippine exports fell by the most in four months, reflecting weak global demand that has floored regional economies, but Manila's pledge to raise spending and strong domestic consumption promise to keep the Southeast Asian economy on an even keel. Exports in August fell 6.3% from a year earlier due to double-digit declines in the shipments of other mineral products, apparel as well as chemicals. Shipments to Japan, the country's top destination, fell 1.6% compared with the previous month's 14.6% drop. Philippine imports rose for a second straight month in July as shipments of capital and consumer goods rose. (Reuters)

Japan September PMI Survey Shows Services Grow at Much Slower Pace. Japan's services sector expanded in September at a much slower pace compared with the previous month as new business slackened in a sign that domestic demand ended the third quarter on a soft note. The Markit/Nikkei Japan Services PMI fell to a seasonally adjusted 51.4 in September from 53.7 in August, which was the highest since October 2013. The index for new business eased slightly to 51.7 from 52.9 in the previous month, showing growth slowed for two consecutive months. (Reuters)

Indonesia's Trade Minister Calls for TPP Membership in Two Years. Indonesia's trade minister on Friday appealed for widespread support for the government's belated bid to join the U.S.-led Trans-Pacific Partnership (TPP) within two years. Tom Lembong said firms would continue to invest in Southeast Asia's largest economy as long as there was certainty that it would eventually be part of the TPP free trade agreement and conclude a similar pact with the European Union. But Lembong added that agriculture, industry and other ministries would have to overcome stiff resistance from "narrow interests" that would resist trade liberalization. (Reuters)

USA

U.S. Import Prices Point to Smaller Drag on Inflation. U.S. import prices fell only slightly in September, offset by recovering oil prices, suggesting a slowdown in the rate of imported deflation is occurring which may eventually allow the Federal Reserve to raise interest rates. U.S. import prices fell only 0.1% last month in data reported by the Labor Department on Friday, and import prices, excluding oil, fell 0.2%, which was half the pace of the declines registered in July and August. Analysts had expected overall import prices to decline more, by 0.5%. The Labor Department data also showed the price of imported consumer goods other than cars actually rose 0.1% in September. (Reuters)

U.S. Wholesale Stockpiles Rise in August, but Sales Fall. Cheaper oil and less demand for autos and machinery weighed on wholesalers in August, as their inventories edged up just slightly while sales dropped. The Commerce Department said Friday that wholesale stockpiles rose 0.1%, and sales fell 1%. Sales have slid 4.7% over the past 12 months. Inventories have increased 4.1%. Falling oil prices account for much of the declining sales. Wholesale inventories are at a seasonally adjusted $583.9 billion, 4.1% above a year ago. (AP)

Fed Still Plans Rate Hike This Year, but Not Committed. Two influential Federal Reserve policymakers on Friday reinforced Fed Chair Janet Yellen's message that an interest rate hike is coming by year's end. "The precise timing for first increase in the federal funds rate is less important to me than the path the funds rate will follow over the entire policy normalization process," said Chicago Fed Chief Charles Evans. Lockhart, a voter on the Fed's monetary policy committee this year, said the Fed will need to monitor the strength of the consumer in coming weeks and months to decide whether to go ahead with the first rate hike in nearly a decade. (Reuters)

Europe

French Industrial Output Jumped in August. French industrial production rose more than expected in August, helped by a strong rise in manufacturing output in the automobile sector, data showed Friday. Industrial production in the Eurozone's second largest economy rose 1.6% in August from July, national statistics agency Insee said. Economists polled had forecast a 0.5% rise in August. The output of manufactured goods was particularly strong, rising 2.2% on the month. Production in the automobile sector surged 6.5%. Still, Insee revised the July industrial output number to -1.1% from -0.8%, indicating the weakness earlier this year may have been deeper than initially thought. (Dow Jones)

U.K. Trade Deficit Hits £11.1 Billion in August. Britain posted a larger-than-forecast trade deficit in August and construction output fell at the fastest pace since 2012. The goods trade deficit was 11.1 billion pounds ($17 billion) compared with an upwardly revised 12.2 billion pounds in July, the Office for National Statistics said on Friday. Economists in a survey had forecast a narrowing to 9.9 billion pounds. Construction output fell 4.3% following a 1% decline in July. Cooling global growth and a strong pound are starting to take their toll on British companies. (Bloomberg)

Currencies

Dollar Heads for Second Week of Losses after Fed Minutes. The U.S. dollar hit multi-week lows against the euro and Swiss franc on Friday, the day after minutes from the Federal Reserve's September meeting bolstered expectations for a later interest rate hike, while growth-linked currencies surged. The dollar index was set for its second straight week of losses after the minutes focused on external factors depressing the outlook for inflation. The euro was last up 0.71% against the dollar at $1.13555. The dollar was last down 0.47% against the franc at 0.96150 franc. The dollar was last up 0.28% against the yen at 120.270 yen. The dollar index was last down 0.44% at 94.896. (Reuters)

Rupiah and Ringgit Have Best Weekly Gains in More Than a Decade. The rupiah and the ringgit completed their best weekly gains since 2001 and 1998 respectively as Indonesia and Malaysia benefited from rallying share markets, rebounding commodity prices and signs the Federal Reserve won’t raise interest rates this year. They were up as much as 4.3% and 3.5% earlier on Friday. Resurgent oil and commodity prices have also benefited Malaysia and Indonesia, and traders have been unwinding bets that the nations’ currencies would keep falling through the end of the year. (Bloomberg)

Commodities

Oil Little Changed after Choppy Trade, WTI Ends at 11-Week High. Oil prices remained little changed in choppy trade on Friday as traders flip-flopped between the negative fundamentals of persistent oversupply and support cushions from a sixth weekly decline in U.S. oil rig counts. U.S. crude closed up $0.20 at $49.63, the highest settle since late July, while Brent ended $0.40 down at $52.65 on Friday. Despite Friday's decline in Brent, both the North Sea crude and WTI benchmarks gained about 9% in the week, the biggest weekly percentage gain in the last six weeks. (Reuters)

Gold Rises to Seven-Week High on Dovish Fed Minutes. Gold rose to a seven-week high on Friday after minutes from the Federal Reserve's last policy meeting showed the U.S. central bank was in no hurry to raise interest rates, pressuring the U.S. dollar. Spot gold was up 1.6% at $1,156.70 an ounce at 1844 GMT. Platinum rallied 4.2% to $983 a tonne, the highest since September 18, and was on track to close the week up 7.7%, its strongest in four years. Palladium rose as much as 3.4% to a four-month high at $722 an ounce. Silver was up 0.8% at $15.78 a tonne. (Reuters)