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South Korea March Inflation +0.3% On Month





Consumer prices in South Korea were up 0.3 percent on month in March, Statistics Korea said on Tuesday - in line with expectations and unchanged from the previous month's reading.


On a yearly basis, inflation jumped 2.2 percent - exceeding expectations for 1.8 percent and up from 1.9 percent in the previous month.


Core CPI, which excludes volatile food prices, gained 0.2 percent on month and 1.4 percent on year.


That follows the 0.2 percent monthly increase and the 1.5 percent yearly gain in the previous month.


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Fed Official Stands Pat on Two More Rate Hikes this 2017





An official reiterated the Federal Reserve should increase rates for at least two times this 2017 in order to avert moving behind the curve or hastening its toughening plans.


Philadelphia Fed President Patrick Harker noted Monday he still presumes it is the sound judgment, adding the rate hike tempo is slowly and is conforming with expectations.


Last month, the Fed escalated interest rates again following three months, nodding to stable jobs expansion and cues the inflation may be increasing.


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UK Shop Prices Slide 0.8% In March - BRC





Shop prices in the United Kingdom were down 0.8 percent on year in March, the British Retail Consortium said on Wednesday.


That was in line with expectations following the 1.0 percent decline in February.


Food prices were up 1 percent on year in March, while non-food prices were down 2.0 percent.


In all, non-food prices have been mired in deflation for four years.


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Wall Street Flat as Trump-Xi Meeting Eyed





U.S. equities closed little changed ahead of the meeting between President Donald Trump and Chinese President Xi Jinping. Investors remained passive ahead of the first-quarter earnings season and fretted about Trump's ability to deliver his economic agenda.


The Dow Jones industrial average climbed 0.19 percent to 20,689, as Caterpillar led gains while Nike lagged behind. The S&P 500 added 0.06 percent to 2,360, as financials led four sectors down while energy was the best performer. The Nasdaq composite edged up 0.07 percent to 5,898.


The S&P industrial sector climbed 0.2 percent and the materials sector rose 0.4 percent. The S&P bank subsector fell 0.3 percent. Airlines traded lower, as American Airlines tumbled 3.7 percent to $40.90 after Delta Airlines Inc trimmed the forecast for a key revenue metric for the second time in less than a month. Shares of Delta slipped 2.6 percent to $45.11.


Ralph Lauren declined 4.5 percent to $77.74. The retailer's concerns appeared to be a worrying sign for a sector that is losing ground to online rivals. Shares of Nordstrom Inc fell 5.5 percent and L Brands Inc dropped 4.4 percent following a brokerage downgrade.


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Hong Kong Business PMI Climbs To 49.9 - Nikkei





The private sector in Hong Kong continued to contract in March, albeit barely, the latest survey from Nikkei revealed on Thursday with a PMI score of 49.9.


That's up from 49.6 in February, although it remains below the boom-or-bust line of 50 that separates expansion from contraction.


Individually, output expanded for the first time in nearly two years, although new orders continued to decline.


Also, firms cut prices despite ongoing cost inflation.


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Greece Signals Bailout Snafu amid Ongoing Negotiations





Greek Prime Minister Alexis Tsipras warned that a convention of eurozone leaders may be needed if an accord is not sealed for the country despite ongoing discussions with global lenders on reforms necessary to unlock new bailout funds.


The premier said Wednesday the creditors are prompting delays and playing games with them.


The debt-stricken nation, in a proposed concession tackled Tuesday, would lower its pension expenditures by 1% of gross domestic product in 2019 and its tax threshold in 2020 by a same amount, three officials privy to the matter disclosed.


Sources said the tax measures would be bolstered by a year if the country fails to hit its primary surplus target, excluding interest payments, in 2018.


Meanwhile, eurozone finance ministers will touch on the status of Greek talks Friday at an informal gathering in Malta.


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Australia Construction Sector Slows In March - AiG





The construction sector in Australia continued to expand in March, although at a slower pace, the latest survey from the Australian Industry Group showed on Friday with a Performance of Construction Index score of 51.2.


That's down from 53.1 in February, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.


Individually, the slowdown was attributed to softness in apartment, commercial and building activity - although house building picked up steam.


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Wall Street Slightly Higher, Investors Focus on Trump-Xi Meeting





U.S. equities finished off session peaks after comments about North Korea while investors focused on upcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping. Trump said he is willing to act alone on North Korea if China does not step up.


The Dow Jones industrial average edged up 0.07 percent at 20,662.95, as Caterpillar led gains while Procter & Gamble was the top decliner. The S&P 500 added 0.19 percent at 2,357.49, as energy led seven sectors up while telecommunications lagged behind. The Nasdaq composite climbed 0.25 percent at 5,878.95. The three major indexes were nearly 0.5 percent higher prior to Trump's comments, which were done as he braced for the key meeting with the Chinese president.


Four of the 11 major S&P sectors closed lower. The energy index was up 0.8 percent as oil prices increased to near one-month peaks. Comcast Corp gave the largest boost to the S&P with its 2.1 percent advance to $38.13 following its announcement of a wireless service.


Investors are cautious ahead of the corporate earnings season next week due to lofty valuations. The S&P 500 index is trading at around 19 times ahead earnings estimates, above its long-term average of 15.


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Moody's: Sharia-Compliant Investment Accounts at Malaysian Banks to Continue Growing





Moody's Investors Service says that the growth of Sharia-compliant investment accounts at Malaysian banks will remain strong over the next 3-5 years, carrying over the trend started in July 2015, as a result of active promotion by the regulator and banks themselves.


"Malaysian banks have strong incentives to promote the growth of such investment accounts because they provide capital benefits and an additional source of funding to grow their assets," says Simon Chen, a Moody's Vice President and Senior Analyst.


"At the same time, concerns exist over the untested state of loss-sharing mechanisms in the accounts, although the regulators have instituted safeguards to protect the banks," adds Chen.


Moody's conclusions are contained in its just-released report on Islamic banks in Malaysia, "Strong Growth of Investment Accounts Supports Bank Capital and Funding, But Risk-Sharing Mechanism Remains Untested."


The robust growth of Sharia-compliant investment accounts in Malaysia began in July 2015 following the implementation of the Islamic Financial Services Act 2013.


Such accounts are defined in the Act as those under which money is paid and accepted for investment in accordance with Sharia principles and on terms that state there is no express or implied obligation to repay the money in full.


Moody's notes that by February 2017, these accounts had grown to MYR74.2 billion, or 13% of total banking system liabilities, and they will become an increasingly important tool in managing business and income growth, as well as capital adequacy.


On the question of risk, a key issue is whether and to what extent loss-sharing mechanisms in the accounts between the banks and investors will be honored in case of actual losses. A significant loss event to test the resilience of this regime has yet to occur.


Our concern is underpinned by our observation that Islamic banks in other Islamic jurisdictions, notably some Gulf Cooperation Council(GCC) countries, in practice do not exercise the contractual loss-absorbing nature of investment accounts.


This situation is perhaps because of customer expectations and out of fear of reputational damage, and can result in Islamic banks bearing much, or all, of the assets risk on behalf of investment account holders.


However, a mitigating feature for Malaysia is that the regulators have put in place safeguards to protect the banks, such as the segregation of the investment accounts from deposits.


Such safeguards will put Malaysian banks on a strong legal footing for upholding the risk-sharing principle behind these investment products when actual losses arise.


Another credit risk is liquidity, as similar to customer deposits that are placed with banks and that can be withdrawn on demand, Sharia-complaint investment accounts could also be subject to withdrawals, which may lead to liquidity issues for the banks.


Moreover, investment accounts are more likely to be sourced from retail and corporate customers seeking higher returns for their excess funds. As such, these funds could be more volatile than deposit accounts, which are mainly the cash balances of companies maintained for daily operational purposes and are hence more stable.


However, this liquidity concern is partially mitigated by Malaysia's regulatory requirement for investment accounts and which helps maintain liquidity coverage ratios for individual accounts.


In such instances, the banks need to ensure that investment accounts have sufficient liquidity to overcome outflows in a 30-day period. That said, liquidity coverage ratio compliance would entail additional costs for the originating banks.


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China Moves to Avoid Trade War with America





China will offer concessions aimed at avoiding a trade war with the United States, according to American and Chinese officials engaged in negotiations between the two governments.


Chinese leader Xi Jinping and US President Donald Trump met last week at the latter's beach resort in Florida. Officials said both leaders agreed they need swift trade talks to produce results in 100 days.


Chinese officials said the Asian country is willing to escalate investment ceilings in the bilateral investment treaty, as well as lift a ban on US beef imports and purchase additional grains and other agricultural products.


Trump has not yet divulged if he seeks to push through with the deal, which American mediators hoped would resolve China market access issues in various industries.


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