Global

Global Factory Growth Picked Up in October but Remained Muted. Global manufacturing growth accelerated to a seven-month high in October but remained muted despite factories cutting their prices at the steepest rate since May 2013. JPMorgan's Global Manufacturing PMI, produced with Markit, came in at 51.4 last month after holding steady at August's more than two-year low of 50.7 in September. October was the 35th month the index has been above the 50 level that separates growth from contraction and the slight pick up did push factories to increase headcount after trimming employment levels in September. (Reuters)

Malaysia

RAM Maintains Malaysia’s gA2 Rating. Malaysia's strong macro fundamentals of steady growth, mild inflation, low unemployment and a healthy banking sector anchor its sovereign ratings of gA2 on the global scale and seaAAA on the Asean scale, said Ram Ratings. "The government's track record of meeting its fiscal consolidation targets and the successful execution of fiscal reforms feature prominently in our rating assessment", said RAM's head of sovereign ratings Esther Lai. She highlighted that the implementation of GST, abolition of fuel subsidies and raising toll rates are among notable fiscal measures that underpin the Malaysian government's commitment to strengthening fiscal sustainability. (The Sun Daily)

IRB Expects to Collect RM132.6 Billion in Taxes Next Year. The Inland Revenue Board (IRB) expects to collect RM132.57 billion in taxes next year after taking into consideration the lower oil price, which is now below US$49 a barrel. Its Chief Executive Officer, Tan Sri Dr Mohd Shukor Mahfar, said the target would also depend on the world's economic condition, especially the fluctuating oil prices. Mohd Shukor said for this year's collection, the Finance Ministry has also earlier reduced its target from RM142 billion to RM130 billion because of the fall in oil prices. (Bernama)

Fare Increase for Komuter, LRT and Monorail Services Next Month. Rail commuters in the Klang Valley area will see a general increase in fares on selected Komuter, LRT, and monorail services come December. KTM Bhd (KTMB) and Prasarana Malaysia Bhd have both reviewed their fare structures for the first time in more than 12 years, citing economic reasons and efforts to provide a more consistent fare structure. The new fare structure is effective Dec 2 and is necessary considering the increasing operating and maintenance costs annually. (New Straits Times)

Asia

Asia's Factories Struggle with Global Demand Gulf. A crop of industry surveys out on Monday pointed to another poor month for trade across Asia as activity contracted in South Korea, Taiwan and Malaysia. Only Japan showed any hint of growth, perhaps thanks to the persistent weakness of the yen. The Caixin/Markit China PMI, which focuses on small and mid-sized companies edged up to 48.3 in October, from 47.2, but still pointed to an eighth month of contraction. China's woes are being felt among its neighbors. The Nikkei/Markit PMI for South Korea ticked down to 49.1 in October, and has not been above 50 since February. (Reuters)

Japan Final October Manufacturing PMI Hits One-Year High. Japanese manufacturing activity in October expanded at the fastest pace in a year as new domestic and export orders increased. The Markit/Nikkei Japan Final Manufacturing PMI rose to a seasonally adjusted 52.4 in October, slightly less than a preliminary reading of 52.5 but a solid improvement from the final reading of 51.0 in September. October's performance was the strongest in a year. The PMI for new export orders was 52.2 in October, showing a return to growth from 48.0 in the previous month. (Reuters)

China Home Price Gains Quicken in October. Growth in Chinese new home prices quickened in October from a year ago, a private survey showed, adding to signs of stabilization in the housing market. Prices of new homes in 288 cities rose an average 1.4% in October from a year earlier, marking the third straight month of gains, a poll by property services firm Real Estate Information Corporation (CRIC) showed. Home sales and prices have improved in bigger Chinese cities over recent months after a barrage of government measures to revive the key sector to arrest an economic slowdown. (Reuters)

Thailand Consumer Prices Continue Falling in October. Thailand's consumer prices fell again in October from a year earlier, although rising local oil and food prices lent some support the inflation figures, the Commerce Ministry said Monday. Thailand's headline inflation fell for the 10th consecutive month, by 0.77% in October compared with last year, official data showed. However, headline CPI rose 0.2% in October from the month before. The October CPI data were better than the median forecast of economists polled that suggested a 0.97% on-year fall and a 0.03% on-month rise. (Dow Jones)

USA

US Factories Grow at Slowest Pace in 2.5 Years. U.S. factory activity grew last month at its slowest pace since May 2013 as manufacturers pared their stockpiles and cut jobs. The Institute for Supply Management said Monday that its index of factory activity slipped to 50.1 in October from 50.2 in September. The figures barely signal growth, which is any reading above 50. Monday's report showed that a measure of hiring fell sharply, from 50.5 to 47.6. Still, the report contained some bright signs: New orders jumped, suggesting that business may pick up in coming months. And a gauge of production rose for the first time since July. (AP)

US Construction Spending Rises 0.6% in September. U.S. construction spending rose 0.6% in September to the highest level since March 2008, pushed up by a surge in apartment building. The Commerce Department said Monday that spending on construction rose to a seasonally adjusted annual rate of $1.09 trillion. Construction of apartments and condominiums jumped 4.9% in September from August, while construction of single-family homes rose 1.3%. Overall, private residential construction rose to the highest level since January 2008. Public construction grew 0.7% from August. (AP)

Europe

Euro-Area Manufacturing Picks Up as German Order Intake Improves. Manufacturing in the euro area unexpectedly accelerated in October as German companies fared better than initially reported, according to Markit Economics. A PMI for the industry rose to 52.3 from 52.0 in September, exceeding an October 23 estimate for an unchanged reading, Markit said in a report on Monday. Employment growth was at the weakest since February. At the same time, new orders increased at the fastest pace in 18 months, keeping pressure on manufacturers’ capacity. A gauge for outstanding business signaled growth for a sixth month in October. (Bloomberg)

UK Factory PMI Surges to 16-Month High, Exports Recover. British factory activity unexpectedly surged to a 16-month high in October helped by a recovery in export orders, a survey showed on Monday. The Markit/CIPS UK Manufacturing PMI jumped to 55.5 in October from 51.8 in September. That was well above even the highest forecast of 52.5 in a poll. The survey indicated Britain's economy could grow twice as fast in the last three months of the year as it did in the third quarter, Markit said. (Reuters)

German Factory Activity Posts Modest Growth at Start of 4Q. Growth in German factory activity eased a little in October but remained solid overall, a survey showed on Monday. Markit's PMI for manufacturing, which accounts for about a fifth of Europe's largest economy, fell to 52.1 in October from 52.3 the previous month. That was slightly above a consensus forecast and a preliminary estimate of 51.6. Factory output increased for the 30th month running, and manufacturers received more export orders. Firms continued to add to their headcounts, but the rate of job creation slowed to a four-month low. (Reuters)

German Bonds Decline Along with Peers as Draghi Cools QE Talk. German bonds fell with their euro-zone peers after European Central Bank President Mario Draghi said further stimulus may not be necessary in December, little more than a week after he signaled a boost to quantitative easing. Spanish bonds also dropped when Draghi used a press conference after the central bank’s regular policy meeting to announce that officials would reexamine their monetary-easing program. Germany’s benchmark 10-year bund yield rose four basis points, or 0.04 percentage point, to 0.56% as of 11:02 a.m. London time. The yield has climbed from 0.42% last week. (Bloomberg)

Currencies

Dollar Adrift in Calm Seas. The dollar, euro and yen started trade on Tuesday in familiar territory, having shuffled sideways as uninspired traders waited for bigger fish to fry after the latest readings on global manufacturing activity failed to provide fresh impetus. The dollar index was barely changed at 96.884 after drifting between 96.635 and 96.965 all of Monday. The euro was hemmed in a tight $1.1000 to $1.1053 range and last stood at $1.1015. Against the yen, the greenback was equally restrained at 120.78 with Japan on holiday. The Australian dollar appeared to be counting on the central bank to maintain the status quo, rising to $0.7145 from Monday's trough of $0.7105. (Reuters)

PBOC Raises Yuan Mid-Point by Most in Single Day since 2005 Revaluation. China's central bank on Monday raised the midpoint fixing of the yuan currency by the most in a single day since the landmark revaluation of the currency in 2005. Monday's midpoint, the official guidance rate, was set at 6.3154 against dollar, or 0.54% stronger than Friday's fix of 6.3495. (Reuters)

Commodities

Oil Down on Russia Output, China. Oil prices fell on Monday after soft Chinese factory data raised worries about energy demand in the economy, while record high Russian crude output suggested little easing in the global supply glut. U.S. crude oil stockpiles likely rose by 2.7 million barrels last week, growing for a sixth consecutive week, a poll showed. Brent settled down $0.77, or 1.6%, at $48.79 a barrel. U.S. crude futures closed down $0.45, or 1%, at $46.14. Worries about the glut grew on Monday, when Russia reported that its October oil production hit a post-Soviet record of 10.78 million barrels per day. (Reuters)

Gold Dips to Four-Week Low on Technicals. Gold hit a four-week low on Monday, extending a sell-off into a fourth straight session as technical signals deteriorated and investors fretted that the Federal Reserve would raise U.S. interest rates this year. Spot gold and was down 0.6% at $1,135.551 at 1931 GMT. It fell nearly 2% last week, its worst weekly performance in nine weeks. U.S. gold futures for December delivery settled down 0.5% at $1,135.90 an ounce. In other precious metals, palladium took the biggest hit and dropped 4.5% to a five-week low of $642.97 an ounce. Spot platinum fell 0.7% to $975 an ounce, and silver was down 0.8% at $15.39. (Reuters)