20121012 1133 Local & Global Economy Related News.

Industrial production index (IPI) declined by 0.7% yoy in Aug (+2.9% n Jul) due to the decrease of manufacturing index (-1.8% vs. +6% in Jul). However, the mining and electricity indexes registered an increase of 1.6% and 2.7% respectively (vs. -5.7% and +2.8% respectively in Jul). Economists had projected the IPI would decline by 1.3% yoy in Aug. 8M12 IPI rose 3.4% (0.6% in 8M11). (Department of Statistics, BT)

The manufacturing sales increased by 1.8% yoy to RM51bn in Aug (+4.8% to RM52.3bn in Jul). On a mom basis, the sales value however, decreased by 2.4% (-0.9% in Jul). In 8M12, the sales rose 5.8% to RM414bn (+10.9% to RM391.1bn in 8M11). Total employees engaged in the manufacturing sector rose 1% yoy to 1.024m persons in Aug (+0.6% to 1.029m persons in Jul). Total salaries & wages paid in Aug rose 5.6% to RM2.4bn (+3.8% to RM2.5bn in Jul). Average salaries & wages per employee up 4.6% yoy to RM2,391 (+3.2% to RM2,422 in Jul).Productivity increased by 0.8% yoy in Aug (+4.2% in Jul). (Department of Statistics)

US export prices gained 0.8% mom in Sep (a revised 1.0% in Aug), double the consensus of 0.4%, whilst on a yoy basis, the measure fell 0.5% (-0.9% in Aug). Import prices gained 1.1% mom in Sep, matching Aug’s revised pace and overshooting consensus of 0.7%, whilst on a yoy basis, the gauge lost 0.6% (-2.2% in Aug). (Bloomberg)

US jobless claims fell to 339,000 in the 6 Oct week for a 30,000 decline that’s the biggest since Jul (a revised 369,000 in the prior week). Consensus called for a level of 370,000. (Bloomberg)

The US trade deficit expanded to US$44.2bn in Aug from US$42.5bn in Jul (originally US$42.0bn). This compares to market expectations of a trade gap of US$44.0bn. (Bloomberg)

Moody’s Investors Service says Asian Liquidity Stress Index rose for the third consecutive month in Sep and now stands at 23.8%, the highest since 1Q2010 and is up from 21.8% in Aug and 16.8% in Jul. (StarBiz)

China is likely to take  "very aggressive" steps  to kickstart its slowing economy after a once-in-a-decade leadership shuffle next month, the  World Bank's newly installed chief Jim Yong Kim said. (AFP)

China has raised its planned railway investment by Rmb20bn (US$3.2bn) to  Rmb630bn for 2012, the Ministry of Railways said, marking a third such increase this year as part of steps to support the slowing economy. (Reuters)

China's top four state-owned banks extended Rmb166bn (US$26.42bn) in new loans in Sep, down from Rmb220bn the previous month. Citing unidentified sources, the 21st Century Business Herald said the reason for the slowdown in lending was due to liquidity tightness at the quarter-end and after the central bank instructed some banks to stop selling commercial paper at discounts to raise funds. (Reuters)

China’s biggest banks are  resisting government pressure to lower borrowing costs amid an economic slowdown as they seek to maintain the profitability of their lending operations, officials at the top four lenders said.(Bloomberg)

Japan's economy minister Seiji Maehara said that  Tokyo may intervene in the currency market on its own to rein in the yen's strength, even without the consent of the US. (WSJ)

Japan’s machine tool orders fell a preliminary 3.0% yoy in Sep from -2.7% in Aug. (Bloomberg)

Japan’s machine orders fell 3.3% mom in Aug (+4.6% in Jul), worse than consensus of -2.3%. (Bloomberg)

Japan’s bank lending (ex-trusts) gained 1.2% yoy in Sep (1.1% in Aug), whilst including trusts, the measure gained 1.0% yoy (a revised 0.8% in Aug). (Bloomberg)

Japanese Prime Minister Yoshihiko Noda called for talks to  contain economic damage from a  diplomatic dispute with China as Japan’s largest trading partner downgraded its delegation to an annual gathering in Tokyo. (Bloomberg)

The  European Union may consider  pushing back when lenders need to start phasing in tougher Basel bank-capital rules by as much as a year after warnings that pressing ahead with the original timetable may drive up costs, according to three people familiar with the talks. (Bloomberg)

Greece's badly stressed economy will need a further two years before it is righted, IMF managing director Christine Lagarde said, adding that the Fund had also advocated giving more time to Portugal and Spain. (AFP)

Greece's budget deficit for Jan-Sep narrowed sharply to €12.6bn, down from €20.1bn during the corresponding period a year earlier. (WSJ)

South Korea's central bank cut its key interest rate by 25 bps to 2.75% and slashed its economic growth estimate for 2012 to 2.4% from 3.0% in its Jul estimate as a result of the global downturn. It also lowered its 2013 forecast from 3.8% to 3.2%. (AFP)

India will end a 14-year policy of solely depending on private capital to build major roads, with the government ready to award US$2.3bn of state-funded highway contracts by end-Mar after a credit crunch left builders unable to find bank loans, Road Transport Minister C. P. Joshi said. (Bloomberg)

Australia's unemployment rate rose to an almost two-and-a-half-year high of 5.4% in Sep from 5.1% in Aug, with the rise largely blamed on more people looking for work. (AFP)

Thai Prime Minister Yingluck Shinawatra and  Myanmar president Thein Sein are set to announce a joint partnership to support the Dawei deep-sea port megaproject  at the Asean Summit in mid-Nov. (Bangkok Post)

Thailand’s Industry Ministry is confident all  industrial estates will be safe from floods this year, with industry permanent secretary Witoon Simachokedee assuring that “all estates are being closely monitored 24 hours a day and the Industrial Works Department has sent officials to x-ray every area, especially those at risk of floods, as well as locations near the floodway." (Bangkok Post)

Thailand’s Excise Department set a collection target of THB80bn from fuel sales in fiscal 2013, up 35% from last year, with the higher target based on assumptions of increased fuel demand with higher passenger car sales under the government's first-time car buyer rebate programme.. (Bangkok Post)

Thailand has competitive strengths to become an energy hub in Asean and reap the benefits of regional integration, but policies are required to create more a diversified, efficient and integrated energy structure, says a report prepared by the World Economic Forum. (Bangkok Post)

Bank Indonesia kept the policy interest rate at 5.75% for an eighth straight month on 11 Oct. (Bloomberg)

The Indonesian government may be softening its stance on the decision to ban the export of raw materials, potentially giving relief to miners who have complained of the law’s impact on profitability. (Jakarta Globe)

According to the latest Hudson report on employment trends in Singapore, 35.9% of respondents plan to increase headcount, while 57.3% will maintain it, a modest increase in hiring expectations from last quarter. (CNA)

Vietnam’s Ministry of Finance has said it will enhance tax inspections at enterprises in the coming months to curb tax fraud and evasion amid concern about the rising State budget deficit. (Saigon Times)

The  Bangko Sentral ng Pilipinas (BSP) reported that the  net inflow of “hot” money reached US$407.42m in Sep, up by 171% yoy. (Philippine Daily Inquirer)

The  Asian Development Bank and the  World Bank were to  waive Myanmar's outstanding debt, ministers said, according to Japanese news reports. It was to be cleared of its debts of US$500m to the ADB and US$400m to the World Bank, its second- and third-largest creditors, as early as Jan. (The Nation)