Malaysia

BNM Authorised Under Financial Services Act to Take Action. Bank Negara Malaysia would take enforcement actions, also known as administrative actions, on parties that are found to have transgressed or have not complied with rules and regulations issued under the Financial Services Act. The central bank said this in a statement to provide clarity regarding its powers to enforce in compliance with the regulatory laws that are administered by the bank. "This would include the imposition of monetary penalties, issuance of an order to comply, making restitution to any person aggrieved by a breach, public and private reprimands and an order to take steps to mitigate or remedy a breach." "This is to ensure the integrity of, and confidence, in the financial system," said the central bank. (Bernama)

RM6b Injection into ValueCap by End of November: KWAP. The first tranche of the RM20 billion fund injection into ValueCap Sdn Bhd will be done by end of November, said Kumpulan Wang Persaraan (KWAP) CEO Wan Kamaruzaman Wan Ahmad. He said the first tranche of RM6 billion will be injected by end of November or latest by early December and KWAP's portion will come from internal funds. "It's about speed and also, after the first tranche injection if the market continues to go up, we might not need the additional injection. Of course if the market comes down, we probably need to support it further by having those additional injection put in place.” (The Sun Daily)

Need for Autonomous Bank Negara. In an unprecedented development, the Malaysian Economic Association (MEA), a leading institution for economists, has come out strongly on the need for Bank Negara to remain autonomous and independent. The association said it was concerned that lately, questions were being raised about the independence of Bank Negara and its governor, Tan Sri Dr Zeti Akhtar Aziz. “We would like to strongly advise that actions and words of this nature should stop, as they are likely to create the impression that Bank Negara is in danger of losing its powers or that its governor will no longer be independent,” it said in a statement yesterday. (The Star)

Malaysia in Talks on FTA with Bosnia & Herzegovina. The government is in discussions on establishing a free trade agreement (FTA) with Bosnia and Herzegovina, Deputy Home Minister Datuk Nur Jazlan Mohamed said. He said this is one of the government's initiatives to help businesses in that country, while helping Malaysian entities to establish their presence there especially in the import and export of halal products. He said once the proposal for the FTA is completed, it will be presented to the Ministry of International Trade and Industry and the Foreign Ministry, adding he hoped the collaboration between the two countries would boost two-way trade. (Bernama)

Asia

China Economy Logs Weakest Growth since 2009. China's economic growth dipped below 7% for the first time since the global financial crisis on Monday, hurt partly by cooling investment, raising pressure on Beijing to further cut interest rates and take other measures to stoke activity. The world's second-largest economy grew 6.9% between July and September from a year ago, the National Bureau of Statistics said, slightly better than forecasts of a 6.8% rise but down from 7% in the previous three months. Monday's GDP reading was the worst since the first quarter of 2009, when growth tumbled to 6.2%. (Reuters)

China's Industrial Output Growth Slows Down in September. China's value-added industrial output growth was down in September, partly due to a slowdown in the country's mining and energy sectors, Xinhua News Agency reported Monday. China's value-added industrial output expanded 5.7% YoY in September, down from 6.1% in August, it quoted data from the National Bureau of Statistics (NBS). YoY growth in the first three quarters stood at 6.2%, slightly down from 6.3% in the first eight months. The news agency said manufacturing output expanded 6.7%, down from 6.8% in August. Xinhua said slower growth of state-owned enterprises also dragged down the data. (Bernama)

Japan Third-Quarter Growth Seen Slowing Sharply as Asian Demand Slumps. Japan's economy is expected to have slowed sharply in the third quarter as demand across Asia ebbed, keeping the Bank of Japan and policymakers under pressure to inject more stimulus to revitalize growth. A poll of 21 economists predicted the economy grew at an annualized rate of 0.4% in the third quarter, a significant downgrade from last month's 1.3% forecast. Despite sputtering economic growth and persistently low inflation, Bank of Japan Governor Haruhiko Kuroda has repeatedly downplayed the need for fresh policy stimulus, remaining optimistic that domestic demand and consumer spending will recover. (Reuters)

BOJ's Kuroda Says Japan Economy to Recover Moderately. Bank of Japan Governor Haruhiko Kuroda said on Monday the country's economy was expected to continue recovering moderately even though the slowdown in emerging markets was weighing on exports and output. He said the BOJ's quantitative and qualitative easing is exerting its intended effects. With inflation having ground to a halt on slumping oil prices, the central bank remains under pressure to ease again ahead of a rate review next week. (Reuters)

Myanmar’s Restrictions on Foreign Exchange Sow Confusion. Myanmar’s central bank has canceled foreign-exchange licenses issued to thousands of businesses including hotels, restaurants and supermarkets in a bid to curb the growing use of U.S. dollars in the economy as the domestic currency tumbles. The move has caused confusion among many businesses, who say the policy was enacted suddenly Monday and without sufficient clarity. “A growing preference for U.S. dollars by these businesses has spurred demand for the currency in favor of the kyat and is leading to exchange rate instability,” the bank said. (WSJ)

South Korea Sept Producer Prices Decline at Fastest Pace on Record. South Korea's producer prices in September in annual terms fell for a 14th straight month and at the fastest pace on record, central bank data showed on Tuesday, leaving inflationary pressures light in Asia's fourth-largest economy. The producer price index for September fell 4.5% from a year ago, the Bank of Korea said, matching a revised 4.5% decline seen in August. August's figure was revised from a 4.4% fall.

USA

NY Fed's Dudley Says Too Early to Think about a Rate Rise. It is too early to consider an interest rate rise in the United States due to concerns about global economic growth, New York Federal Reserve Bank President William Dudley was quoted as saying by an Italian newspaper on Monday. "It's true we thought we could raise interest rates by the end of 2015, but turbulence on financial markets, modest global growth, energy prices and macro-prudential imbalances are slowing this process down." He added that it was "still too early to think about raising interest rates". Dudley told CorrierEconomia that it would be a "big mistake" to ignore the fact that the global economy is growing only moderately. (Reuters)

US Homebuilder Sentiment Improves in October. U.S. homebuilders are feeling more optimistic about the housing market, lifting their confidence this month to the highest level in 10 years. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose this month to 64, up from 61 in September. The last time the reading was higher was October 2005 at 68. Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been consistently above 50 since July last year. Builders' view of current sales conditions and their outlook for sales over the next six months surged. A measure of traffic by prospective buyers held steady. (AP)

Europe

ECB's Nowotny Says Eurozone Policy May Need to Become Expansive. The Eurozone needs additional measures, possibly looser fiscal policy, to secure economic growth, European Central Bank policymaker Ewald Nowotny said in an interview published on Monday. "This applies to structural reforms and fiscal policy," he said in an interview with Poland's Rzeczpospolita. Asked if he was suggesting that the euro zone's fiscal policy should be more expansive, he said: "For a considerable time it was restrictive. Now it could be described as neutral, but there may be a need for it to become expansive." (Reuters)

ECB's Noyer Says QE 'Well Calibrated'. The European Central Bank's quantitative easing program is well calibrated and does not need to be adjusted, ECB governing council member Christian Noyer said on Monday. "It's well calibrated, it's already bearing fruits," Noyer, who is also Bank of France Governor, told BFM Business TV. The ECB started buying 60 billion euros ($68 billion) of assets every month in March to stave off deflation. Noyer will be replaced at the head of the Bank of France by former BNP Paribas executive Francois Villeroy de Galhau at the end of the month. (Reuters)

Russian Recovery Hopes Dashed as Retail Sales Plunge. Plunging retail sales and real wages have dashed hopes Russia's economic slump is past its worst, with data published on Monday instead suggesting that situation is getting worse. Retail sales fell by 10.4% YoY, the Federal Statistics Service data showed. That was worse than a 9.1% fall in September and well below analysts' forecasts. Real wages also continued to plummet, falling 9.7%, slightly better than analysts had forecast but worse than in August. (Reuters)

Greek Yield Curve Shows Concern over Default Starting to Ease. Greece’s bond yield curve is showing signs of returning to normality. The yield on Greece’s securities due in 2019 fell below that on the nation’s 10-year debt on Monday as European Union officials said the nation’s next 2 billion-euro ($2.3 billion) aid payment is under discussion and may be approved next week. The yield on Greece’s 4.75% debt maturing in April 2019 fell 63 basis points, or 0.63 percentage point, to 7.51% as of 12:36 p.m. London time. The 10-year yield was at 7.59%, leaving the yield on the 2019 securities below that on Greece’s 10-year bonds for the first time this year, according to closing price data. (Bloomberg)

Currencies

Euro Falls Ahead of ECB Meeting This Week; Dollar Gains. The euro retreated to a 10-day low against the dollar on Monday as investors focused on a European Central Bank meeting later in the week that could pave the way for further stimulus to boost inflation in the euro zone. In late trading, the euro was 0.2% lower at $1.1322, from a 10-day trough of $1.1307. Against sterling, it fell 0.7% to 73.22 pence after dropping to a four-week low of 73.04 pence. The dollar index, meanwhile, on Monday rose 0.3% to 94.952. (Reuters)

Commodities

Oil Down about 4%; Gasoline Drop Adds to China, Iran Worries. Crude oil fell about 4% on Monday after a tumble in gasoline futures added pressure to a market slumping on slower growth in China and signs that Iranian oil will return to the market soon following implementation of its nuclear deal. A stronger dollar and softer equity markets on Wall Street added weight to the petroleum complex, traders said. Brent settled down $1.85, or 3.7%, at $48.61 a barrel. U.S. crude settled down $1.37, or 3%, at $45.89. (Reuters)

Gold Down for Third Day as Strong Dollar Weighs. Gold prices fell for a third straight day on Monday as a rebounding dollar continued to pull the precious metal away from last week's 3.5 month highs. The spot price of gold was down 0.6% at $1,170.26 an ounce by 2020 GMT. In futures trading, U.S. gold for December delivery on COMEX was down 0.9% at $1,172.80. Silver was down 1.6% at $15.79 an ounce. Platinum eased 0.3% to $1,008 an ounce, while palladium slid 1.6% to $682 an ounce, after hitting an October 1 low at $664.10. (Reuters)

Iran Urges OPEC to Cut Oil Output to Raise Prices to $70-$80. OPEC member states should cut crude output to boost prices to a range of $70 to $80 a barrel, Iran’s Oil Minister Bijan Namdar Zanganeh said, even as his country prepares to ramp up production in the aftermath of economic sanctions. “No one is happy” with prices at current levels, Zanganeh told reporters in Tehran. “OPEC should decide to manage the market by reducing the level of production.” Zanganeh said he doesn’t expect the producer group to decide to scale back output when its ministers meet next in December. OPEC plans to assess output when ministers from its 12 members meet on December 4 in Vienna. (Bloomberg)