Malaysia’s currency appreciated the most since 2010 and shares climbed to a record high following yesterday’s national election. The ringgit strengthened 1.8% versus the dollar to 2.9793, posting the biggest gain since June 2010, while the FTSE Bursa Malaysia KLCI index surged 3.4% to close at an all-time high of 1,752.02.
Developing-country equities advanced on Monday, with the benchmark MSCI Emerging Market Index rising 0.5% to a seven-week high level, amid positive Malaysian election results and better U.S. economic outlook. The advance was led by Malaysian stocks, and benchmark stock indexes in India, Poland, Russia, and South Africa gained at least 0.3%.
High-income Economies…In the US, the services sector expanded at a slower pace in April, with the Institute of Supply Management (ISM) index for non-manufacturing activity falling to 53.1 from 54.4 in March. A reading above 50 indicates expansion. This follows an earlier ISM report showing that manufacturing activity expanded at the slowest rate of the year in April, pointing to softening growth in Q2.
Euro-zone retail sales were up 1.1% (q/q saar), compared to a 5.9% drop in December, mainly because of a strong bounce in January. Sales growth has been much weaker since then, falling by 0.1% (m/m sa) in March and by 0.2% in February, reflecting lower demand for non-food items.
Retail sales in Australia dropped a seasonally adjusted 0.4% (m/m) in March, following 1.3% growth in each of the past two months, reflecting lower consumer spending on household goods as well as clothing, footwear and personal accessories.
Developing Economies… East Asia and the Pacific: Indonesia’s growth eased in 2013Q1 to 6% (y/y), down from 6.1% (y/y) in the previous quarter. Weaker private consumption was a drag on domestic demand together with weaker investments and imports. Growth came in at 6.2% for the entire 2012.
China’s service sector PMIs eased in April to 51.1, down from 54.3 in March. Even though the reading above 50 indicated expanding activity, it still represented the weakest expansion since August 2011. The composite index of both manufacturing and services together, dropped to 51.1 from 53.5 in March, and was the weakest since last October.
Middle East and North Africa: Egypt's budget deficit grew in the first three quarters of the current fiscal year (FY) 2012/13 as the shortfall reached $26bn or 10.1% of GDP, compared to 10.8% of GDP for the entire FY 2011/12. The deficit increased despite 5.4% (y/y) revenue growth as expenditures grew 23.1% (y/y) led by spending on wages (24% y/y) and subsidies (22% y/y).
South Asia: India’s service sector PMIs dropped to 50.7 in April, down from 51.4 in March as new orders declined. At the same time, the composite index decreased to 50.5 in April from 51.4 in March which is the slowest growth in 18 months.