Malaysia
CPI Remained At 1.4% In August With Slight
Increase In F&B Index. Inflation rate for August remained at 1.4% YoY,
making it in line with market expectations and retaining its slowest pace seen
since March of 2010. There were however slight increases in the food &
beverages and the furnishings, household equipment & routine household
maintenance indexes in light of the Eid season. This is better translated by
the monthly changes, which increased by 0.2%. (Please refer to Economic
Viewpoint for further comments)
Zeti: Malaysia’s Financial System Can Absorb
Volatilities. The recent US Federal Reserve's QE3 will not have much impact
on Malaysia as the country's financial system is strong and capable of
absorbing any financial volatilities arising from this move. “We have surges of
inflows but also have reversals and previously would have been destabilised if
it was more than 10 years ago. But in the current environment, we have advanced
significantly to enable us to intermediate these volatile financial flows,”
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said. (The Star)
Asia
Bank Of Japan Increases Asset Purchase Programme. The Bank of Japan
(BoJ) has extended its asset purchasing programme by 10 trillion yen ($126bn),
following similar moves by the Federal Reserve and the European Central Bank.
The move, aimed at boosting the economy, increases the overall size of the
stimulus programme to 80tn yen. Although the increase had been anticipated by
some analysts, many were surprised by the size of it. Under the asset
purchasing programme the central bank buys bonds in order to keep the long-term
cost of borrowing down. The BoJ also left interest rates unchanged at between
zero and 0.1%. (BBC)
FDI Into China Declines Again In August.
Foreign direct investment in China fell again in August, the government said
yesterday, amid stubborn weakness in both the global and Chinese
economies. Investment from overseas
declined by 1.4 per cent from a year earlier to US$8.3 billion last month, the
Commerce Ministry said in a statement.
The August fall continued a downward trend that goes back to November,
with the exception of May, when foreign direct investment eked out a marginal
gain of 0.05%. (AFP)
USA
US Home Sales Rise To Two-Year High In August.
Sales of previously owned US homes reached their highest level for more than
two years in August, figures show. Prices for such homes also rose, according
to figures from the National Association of Realtors (NAR). The figures added
to the picture of an improving US housing market, although the number of first-time
buyers fell back from 34% to 31%. That is the biggest number since May 2010, when
sales were boosted by a federal home-buying tax credit. However, the figure is
still below the 5.5 million units a year level seen as consistent with a
healthy housing market. (BBC)
Housing Starts In U.S. Climbed 2.3% In August.
New housing construction rose in August, boosted by the strongest pace of
single-family home starts in more than two years that shows an improving U.S.
real estate market. Beginning construction climbed 2.3 % to a 750,000 annual
rate, less than forecast and restrained by a drop in the building of
apartments, from a revised 733,000 annual pace in July, Commerce Department
figures showed today in Washington. The median estimate of 85 economists
surveyed by Bloomberg called for 767,000.
(Bloomberg)
US Mortgage Applications Fell Last Week.
Applications for U.S. home mortgages dipped last week, though demand for
refinancings rose as mortgage rates fell to a record low, an industry group
said on Wednesday. The Mortgage Bankers Association said its seasonally
adjusted index of mortgage application activity, which includes both
refinancing and home purchase demand, edged down 0.2 % in the week ended Sept
14. The seasonally adjusted index of refinancing applications gained 0.8 %.
(Reuters)
Europe
France Moves To Pass EU Fiscal Pact.
French President Francois Hollande's Socialist-led government on Wednesday
kickstarts ratification of a European Union budget discipline pact it
grudgingly accepts as the next step out of the euro debt crisis. Created in March
by Hollande's predecessor Nicolas Sarkozy and 24 other EU leaders including
Germany's Angela Merkel, the fiscal compact requires euro zone countries to
slash their public deficits or face legal action and possibly fines. Its entry into cabinet on Wednesday
paves the way to likely approval by French parliament in coming weeks, despite
noisy dissent within Hollande's leftleaning coalition and growing
disenchantment with the European Union among a French public facing 13-year
jobless highs and fearing worse to come. (Reuters)
Currencies
Dollar Down Vs. Euro, Yen After Bank Of Japan
Move. The dollar slipped against the euro and other major currencies on Wednesday
after U.S. economic data boosted equities, while the Japanese yen ended a
short-lived drop against several rivals after the Bank of Japan surprised
markets by expanding its own asset-purchase program. The ICE dollar index, which measures the greenback
against a basket of six currencies, fell
to 79.113 versus 79.226 late Tuesday in North America. The euro turned up to $1.3051, from $1.3042 in
North American trade late Tuesday. It’s up from just under $1.30 as the
session’s lows. The dollar rose as high as ¥79.23 before retreating to ¥78.36,
down from ¥78.89 late Tuesday. The euro erased an early rally to fall 0.5%,
changing hands at ¥102.25, while the British pound dropped 0.8% to ¥126.96.
Also Wednesday, the pound changed hands at $1.6218, down from $1.6245. The
Australian dollar turned up to $1.0483, from $1.0444. (Market Watch)
Commodities
Oil Dives $4 As Supplies Rise, Saudi Talk
Spooks Funds. Oil prices slumped $4 on Wednesday as Saudi efforts to tame
prices and a massive rise inU.S. crude inventories after Storm Isaac fuelled a
third day of heavy fund liquidation, one of the biggest sell-offs in more than
a year. Brent November crude fell $3.84, or 3.4 %, to settle at $108.19 a
barrel, having recovered from a session trough of $107.40, the lowest since
August 3. Brent's three-day drop stood at more than 7 %, the biggest since a
7.73 % dive in early June. That, in turn, was the biggest three-day slide since
August, 2011. U.S. October crude, which
expires on Thursday, fell $3.31, or 3.47%, to settle at $91.98 a barrel after
dropping below the 50-day moving average of $93.08. U.S. November crude fell
$3.32, to $92.30 a barrel. (Bloomberg)
Gold Flat Near 6-1/2 Mos High, Outperforms
Crude. Gold ended nearly flat on Wednesday, hovering near a 6-1/2 month
high hit in early trade, buoyed by monetary stimulus from the world's major
central banks despite pressure from another tumble in crude oil prices. Spot
gold was down 0.1 % at $1,769.90 an ounce by 2:01 p.m. EDT (1801 GMT), after
hitting a 6-1/2 month high of $1,779.10, around $10 below the 2012 high of
$1,790.30 reached in late February. Among other precious metals, silver was down 0.7 % at $34.52 an ounce,
while platinum group metals rebounded from the previous session's sharp
pullback. Spot platinum climbed 1.1 % to $1,635.74 an ounce, and palladium was
up 1 % at $669.47 an ounce. (Reuters)
Source: Kenanga
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