Global

WTO Sees up to $3.6 Trillion Boost to Trade from Deal to Cut Red Tape. The benefits of a treaty that will cut red tape at borders and standardize customs procedures are much larger than previously thought and could add $3.6 trillion to annual global exports, the World Trade Organization (WTO) said on Monday. The WTO's trade facilitation agreement, struck at a ministerial conference in Bali in December 2013, will do more to boost trade than if all the world's import tariffs were removed, cutting costs 9.6% to 23.1%, the WTO calculated. Once the new rules come into effect, it will cut waiting times at customs, lessen the potential for corruption and hasten foreign direct investment into weaker economies. (Reuters)

Governments Shouldn't Count on Low Oil Prices: IEA. Countries should not bank on oil prices remaining low when formulating their energy policies, as supplies could tighten from mid-2016 due to a drop in investment and falling U.S. output, a senior industry official said on Monday. "It will be a great mistake to index our attention to oil security to the oil price trajectory in the short term," Fatih Birol, executive director of the International Energy Agency (IEA), said at the Singapore International Energy Week. If prices continued at current levels, oil investment was likely to decline again in 2016, mainly in high-cost regions, after sliding this year by more than a fifth, said Birol. (Reuters)

Malaysia

Government May Review Budget 2016 if Crude Oil Falls Below US$48 a Barrel. The government plans to review Budget 2016 if the price of Brent crude oil falls below US$48 a barrel. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said if oil price goes higher than the assumption of US$48 per barrel, the government will have more revenue that can be allocated to the people. "If it goes lower than US$48, we have to review the Budget again, because we cannot go beyond 3.2% of our fiscal deficit and our debt to GDP (55%)," he told reporters. He said three challenging areas include the global economic slowdown, Malaysia becoming a high income economy and the high cost of living. (The Sun Daily)

August Labour Force Participation Rate Increases to 67.8%. The labour force participation rate in August 2015 increased a marginal 0.3% to 67.8% compared with 67.5% in July, the Department of Statistics said. The rise was due to the 0.7% increase recorded in the number of persons employed (13.9 million) in the labour market during the month in review, it said in a statement. "YoY comparison showed that the labour force participation rate increased 0.7 percentage points compared with 67.1% in Aug 2014," it said. Meanwhile, the unemployment rate remained unchanged at 3.2% from July. YoY comparison showed that the unemployment rate rose 0.5 percentage points. (Bernama)

M40 to Enjoy Tax Savings of up to RM600 Even without BR1M. A majority of taxpayers including those in the M40 group who are not eligible for the BR1M will enjoy tax savings of between RM400 and RM600 annually. Deputy Finance Minister Datuk Johari Abdul Ghani said the savings would be enjoyed following the increase in tax relief as well as the creation of a new form of tax relief. "Although those with a salary of RM4,000 and above are not eligible for BR1M, the taxpayers, with the relief that have been increased for wife and children, can save up to RM600 per year," he said on Monday. M40 refers to the middle 40% with household income of between RM3,860 and RM8,319. (Bernama)

Asia

Thai September Exports Fall Less Than Expected. Thailand's exports in September fell less than expected, but had their ninth straight monthly drop while imports plummeted, showing that the trade-reliant economy continues to struggle to grow. Exports in September fell 5.51% from a year earlier, the Commerce Ministry said on Monday. A Reuters poll predicted a 7.65% decline. In July-September, exports totalled US$54.71 billion, about 5.2% below the same period of 2014. Imports plunged 26.2%, the biggest fall since August 2009 and worse than the poll's forecast 19.1% drop. The ministry said the big decline in imports stemmed from major declines in oil, gold and aircraft. (Reuters)

Singapore Industrial Production Falls in September. Singapore's industrial production declined nearly in line with expectations in September, as the key electronics and marine engineering sectors continued to drag overall output. Manufacturing output fell 4.8% YoY in September, compared with a revised 7.1% fall in August, according to preliminary data released Monday by the Economic Development Board. A poll of five analysts expected a 4.6% decline. Measured on a seasonally adjusted basis, manufacturing output rose 0.5% from a month earlier in September, compared with a revised 3.7% fall in August. Electronics output fell 8.6% from a year earlier in September. (Dow Jones)

China Leaders Meet to Discuss Financial Reforms, Economic Growth. China's ruling Communist Party opened a key meeting on Monday that will focus on financial reforms and how to maintain growth of around seven% and more broadly map out economic and social targets for the next five years. The Central Committee is gathering until Thursday to finalize the 13th Five-Year Plan, a blueprint for economic and social development between 2016 and 2020. The meeting takes place amid growing concerns over a slowing Chinese economy. (Reuters)

China Central Bank: Liberalizing Rates Key Element of Financial Reform. Liberalizing China's interest rates is a key element of financial reform, the country's central bank said on Monday, adding that cutting borrowing costs and lowering the amount of cash banks must keep as reserves do not equate to quantitative easing. The comments come after the central bank cut interest rates on Friday for the sixth time in less than a year, and again lowered the reserve requirement ratio (RRR) for banks. Lowering interest rates and cutting RRR are "normal monetary policy" practice, the bank said in a statement published on its website on Monday. (Reuters)

China Central Bank Says Regulation of Interest Rates to Continue. The liberalization of China's interest rates was needed to develop monetary policy and diversify financial products, but regulation would also be seen in future, a vice governor of the country's central bank said on Monday. The comments by Yi Gang, deputy governor of the People's Bank of China, came after the central bank cut interest rates on Friday for the sixth time in less than a year, and again lowered the reserve requirement ratio (RRR) for banks in a bid to jump start growth in China's stuttering economy. (Reuters)

Australia's Cooling Housing Market Clears Way for Rate Cut. Australia's housing market continues to cool, removing a hurdle to an interest-rate cut. Property-auction data for major cities over the weekend confirmed the market is stalling. In Sydney, sales by auction slumped to a three-year low. The auction clearance rate there was 64.4%, compared with 80% earlier this year, according to property-research group CoreLogic RP Data. Melbourne recorded an auction-clearance rate of 69.8% and Brisbane of just 54.8%, both down from recent peaks. The Reserve Bank of Australia warned this month that risks surrounding housing and mortgage markets seem "higher than average at present." (Dow Jones)

BOJ Can Wait for More Easing as Job Market Tight; Key Abe Adviser. The Bank of Japan need not boost its massive monetary stimulus this week as the labor market remains tight, a key economic adviser to Prime Minister Shinzo Abe said on Monday. Koichi Hamada, an emeritus professor of economics at Yale University, also told Reuters that the central bank does not have to rush into further easing but rather can monitor the prospects for an interest rate hike by the United States. He also said market speculation that the Federal Reserve may raise U.S. rates is taking some pressure off Japan's central bank by keeping the yen soft. (Reuters)

Americas

Treasuries Advance as Chinese Policy Seen Keeping Fed Rates Low. Ten-year Treasuries rose as easing monetary policy in China and Europe fueled speculation that this will support the dollar and reduce inflation pressures in the U.S., keeping the Federal Reserve’s benchmark interest rates low. The government notes halted two days of declines after yields had climbed close to their highest level in two weeks and attracted investors. Futures traders predict the Fed will wait until at least March to start raising borrowing costs. Benchmark 10-year note yields fell two basis points to 2.07% as of 7:11 a.m. in New York, according to Bond Trader data. (Bloomberg)

Brazil Analysts Boost Inflation, Interest Rate Calls for 2016. Brazil analysts forecast faster inflation and see less room for cuts in the benchmark rate for 2016, as political turmoil hobbles efforts to fortify fiscal accounts and avoid a second sovereign downgrade to junk. Brazil’s Selic rate will be 13% at the end of next year, according to the October 23 central bank survey of about 100 analysts. That’s up from the previous week’s estimate of 12.75%. Inflation next year will reach 6.22%, the analysts said, up from 6.12% the previous week. Instead of bringing inflation to its 4.5% target by the end of next year, the bank now says it aims to reach the goal “over the relevant monetary-policy horizon. (Bloomberg)

Traders Expect Default on Mexican $100 Million Catastrophe Bond on Hurricane Patricia. Traders are anticipating a likely default of a $100 million catastrophe bond issued on behalf of the Mexican government, as a result of Hurricane Patricia, they said on Monday. The default - of either 50 or 100% of the bond, depending on the strength of the hurricane - would mark one of the largest catastrophe bond losses for investors since the Japanese earthquake and tsunami of 2011, they added. Investors who buy a catastrophe bond enjoy a high yield but lose the value of the bond if a pre-determined catastrophe is triggered. (Reuters)

U.S. New Homes Sales near One-Year Low; Drop Seen as Temporary. New U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground. The Commerce Department said on Monday sales dropped 11.5% to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August's sales pace was revised down to 529,000 units from the previously reported 552,000 units. The median price of a new home rose 13.5% from a year ago to a nine-month high of $296,900. (Reuters)

Europe

German Business Confidence Falls as Global Risks Take Toll. German business confidence fell for the first time in four months in October, signaling that a slowdown in global demand is taking its toll on Europe’s largest economy. The Ifo institute’s business climate index declined to 108.2 from 108.5 in September. The median estimate was for a drop to 107.8, according to a survey of economists. A gauge for current conditions fell to 112.6 in October from 114, while a measure for expectations unexpectedly increased to 103.8 from 103.3 in September. Germany’s export-oriented economy has benefited from solid consumer demand fueled by record-low unemployment so far. (Bloomberg)

UK Housing Market: Lack of Supply 'Pushing up Prices'. Mortgage activity has picked up this year but the lack of homes for sale is likely to push up house prices, reports have suggested. The Centre for Economics and Business Research (CEBR) predicts house prices will rise 5.6% this year, higher than its previous forecast of 4.7%. A lack of properties being put on the market was pushing up prices, it said. This comes despite a 14% rise in mortgage approvals for house purchases, according to the major banks. (BBC)

UK's Cameron Faces Revolt over Cuts to Tax Credits. With a majority in the House of Commons, Prime Minister David Cameron should have no problem implementing his policies. But Cameron is facing rebellion from the unelected House of Lords - and some of his own Conservative lawmakers - over cuts to tax credits for parents and people in low-income jobs. The House of Lords, Parliament's unelected upper chamber, is scheduled to vote Monday on whether to take the rare step of defying the House of Commons by striking down the cuts. Critics say as many as 3 million people will be worse off under the changes, the latest in a string of government spending cuts intended to reduce Britain's deficit. (AP)

ECB Call for Eurozone Reforms May Fall on Deaf Ears. The European Central Bank says it wants Eurozone countries to stir up growth with structural reforms, but its own money printing plans have taken the pressure off politicians for action, leaving European Union rules to drive often unpopular change. And although the EU toughened up those rules during the sovereign debt crisis, the European Commission has been weak in enforcing them in the teeth of opposition from governments reluctant to coordinate their fiscal policies. "EU countries don't want to be coordinated, market pressure is absent, and rules are being questioned," said a senior EU official involved in scrutinizing national budgets. (Reuters)

Currencies

Dollar Down on Yields, Home Sales as Bulls Await Fed Meeting. The dollar fell Monday against the euro and other major currencies on a decline in U.S. bond yields and worries about the U.S. economy after new home sales fell steeply in September. Weaker oil prices and a slight downturn in U.S. stock prices also pressured the dollar, as investors await clues from the Federal Reserve's policy meeting this week on a possible interest rate increase, analysts said. The dollar index shed 0.3% to 96.850, after last week notching its biggest one-week rise in five months. Against the yen, the greenback was down 0.4%, at 120.98 yen, while the euro was up 0.3% at $1.1050. (Reuters)

Commodities

Crude Oil Down, Extending Two-Week Slide on Product Glut Worry. Crude prices edged lower on Monday, staying under pressure after two straight weeks of losses, on worries that the oversupply in oil products could swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries. Brent was down $0.20, or 0.4%, at $47.79 a barrel by 1528 GMT. U.S. crude futures fell $0.43, or about 1%, to $44.17. Both crude benchmarks have lost about 10% over the past two weeks combined. (Reuters)

Gold Steady on Weaker Dollar, Uncertainty over Fed. Gold steadied on Monday, after a three-day losing streak as the dollar's ascent paused and uncertainty persisted over the timing of the first U.S. Federal Reserve rate increase in a decade. Spot gold was up 0.02% at $1,164.10 an ounce by 1912 GMT, off the session high at $1,169.20. U.S. gold futures for December delivery settled up 0.3% at $1,166.20 an ounce. Most industrial precious metals fell, with platinum down 0.5% at $994 an ounce and palladium falling 1% to $681 an ounce. Silver followed gold's upside, rising 0.2% to $15.83 an ounce. (Reuters)