Malaysia: Inflation slows, reducing pressure for rate increase
Malaysia’s inflation rate fell to a three-month low in September, reducing pressure on policy makers to raise interest rates at their next meeting. Consumer prices rose 1.8% from a year earlier after gaining 2.1% in August, the Putrajaya, Malaysia-based statistics department said. That compares with the median forecast for a 2.1% gain in a Bloomberg News survey of 14 economists. (Bloomberg)
Japan: BOJ said to consider buying lower-rated company debt
The Bank of Japan may buy lower- rated corporate debt as part of its latest program to help companies borrow cash and support the economy, three people with direct knowledge of the discussions said. The BOJ will likely consider purchasing BBB-rated corporate bonds and a-2 commercial paper at a policy meeting on October. The purchases would come under a JPY5trn (USD61bn) program unveiled by the bank on 5 Oct that includes government bonds, exchange-traded funds and real-estate investment trusts. (Bloomberg)
China: G-20 to avoid ‘competitive devaluation,’ prod China
Group of 20 finance ministers and central bankers vowed to avoid weakening currencies to lift exports, leaving leaders to flesh out new ways of prodding fellow member China to allow faster gains in the yuan. Officials ended talks in South Korea pledging to refrain from “competitive devaluation” and to let markets set foreign-exchange values more as they sought to calm fears that they risk a trade war by using cheaper currencies to spur growth. They called for more sustainable current-account gaps without embracing a US proposal for targets, an initiative aimed at making a yuan advance more palatable to China. (Bloomberg)
UK: Growth pace probably slowed to 0.4% in third quarter
UK economic growth slowed in the third quarter to a third of the pace in the previous three months as consumer spending faltered, a survey of economists showed. The economy expanded 0.4% in the period, down from 1.2% growth in the second quarter, according to the median forecast in a Bloomberg News survey of 35 economists. (Bloomberg)
US: Growth probably sped up on spending gain
The economy in the US probably grew at a faster pace in the third quarter, reflecting a pick-up in consumer spending that bodes well for the recovery’s staying power, economists projected a report this week will show. GDP rose at a 2% annual pace, up from a 1.7% rate in the previous three months, according to the median estimate of 67 economists surveyed by Bloomberg News before 29th Oct Commerce Department report. Other data may show business investment remains a mainstay of the economic rebound, while housing is mired in a slump. (Bloomberg)
US: Deflation disappears with bond market showing no double dip
The bond market is showing Federal Reserve Chairman Ben S. Bernanke will succeed in sparking inflation after the smallest gain in core consumer prices in half a century increased concerns that the economy will deflate. Expectations for rising consumer prices have increased faster in the US than any other bond market this month as central bankers made the case for monetary easing through additional asset purchases. Yields on 30-year Treasuries climbed as much as half a percentage point since September to 2.61% points more than similar maturity inflation-indexed debt, the widest gap since May and an indication for anticipated gains in consumer prices. (Bloomberg)
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