MALAYSIA MANUFACTURING PMI FALLS IN NOVEMBER

Malaysian manufacturing activity fell in November from the previous month as the sector continued to contract -- production and new orders falling at steep pace --a private survey by Nikkei and research firm Markit shows. The Nikkei manufacturing purchasing managers index came in at 47.0, down from 48.1 in October, signaling the sharpest rate of deterioration in operating conditions at Malaysian manufacturers since the survey began in July 2012. A reading above 50 indicates an expansion in manufacturing activity; below, a contraction. (Saurabh.Chaturvedi@wsj.com; @journosaurabh) 

Sterling Index At 0800 GMT

1 December 2015, 10:06

 
      (JAN 2005=100)     INDEX      GBP/USD     EUR/GBP 
     PREVIOUS CLOSE      93.5       1.5053      0.7016 
               OPEN      93.6       1.5100      0.7009 
              10 AM 
               NOON 
               2 PM 
               4 PM 
 

Contact London Newsroom, Dow Jones Newswires; +44-20-7842-9376

G7 POLITICAL, ECONOMIC CALENDAR

2350  JPN  Q3       2nd Preliminary Quarterly GDP Estimates

                       Real GDP, Y/Y%                                     -0.3%

                       Real GDP, Annualized                               -1.2%

                       Nominal GDP, Q/Q%                                  +0.1%

                       Consumption, Q/Q%                                  -0.7%

                       Capex, Q/Q%                                        -0.9%

                       Domestic Dem-Pct Pts Contrib To Growth             +0%

                       External Dem-Pct Pts Contrib To Growth             -0.3%

                       Inv-Pcts PtsContrib To Growth                      +0.3%

                       Public Investment, Q/Q%                            +2.1%

                       GDP Deflator, Y/Y%                                 +1.5%

2350  JPN  Nov      Provisional Trade Statistics for 1st 20 days of Month

N/A   EU            Eurogroup Meeting of eurozone finance ministers

Tuesday, December 8, 2015                                      Exp        Prev

 GMT

0001  UK   Q1       Manpower UK Employment Outlook Survey

0001  UK   Nov      BRC-KPMG Retail Sales Monitor

                       Same-Store Sales, Y/Y%                             -0.2%

                       Total Sales, Y/Y%                                  +0.9%

0500  JPN  Nov      Economy Watchers Survey

0501  US   Q1       Manpower Quarterly U.S. Employment Outlook Survey

0700  GER  Oct      Manufacturing turnover

0745  FRA  Oct      Foreign trade

0930  UK   Oct      UK monthly industrial production figures

                       Indus Prod, Rolling 3-Mos %Chg                     +0.2%

                       Indus Prod, M/M%                                   -0.2%

                       Indus Prod, Y/Y%                                   +1.1%

                       Mfg Output, Rolling 3-Mos %Chg                     -0.4%

                       Mfg Output, M/M%                                   +0.8%

                       Mfg Output, Y/Y%                                   -0.6%

1000  EU   Q3       GDP 2nd estimate

                       GDP, Q/Q%                                          +0.4%

                       GDP, Y/Y%                                          +1.5%

1100  FRA  Oct      OECD Composite Leading Indicators

1100  US   Nov      NFIB Index of Small Business Optimism

                       Small Business Idx                                 96.1

1245  US            The Retail Economist/Goldman Sachs Weekly Chain Store Sales

                    Index

                       Chain Store Sales, W/W%

                       Chain Store Sales, M/M%

1315  CAN  Nov      Housing Starts

                       Annual Rate                                        198065

                       Housing Starts, M/M%                               -14.4%

1330  CAN  Oct      Building permits

                       Building Permits, M/M%                             -6.7%

1355  US            Johnson Redbook Retail Sales Index

                       Ret Sales Mo-to-Date, M/M%

                       Ret Sales Mo-to-Date, Y/Y%

                       Latest Wk, Y/Y%

1500  US   Dec      IBD/TIPP Economic Optimism Index

                       Economic Optimism Idx                              45.5

                       6-Mo Economic Outlook                              41.5

1500  US   Oct      Job Openings & Labor Turnover Survey

1500  US            ISM Semiannual Report On Business & Economic Forecast

1500  UK   Nov      NIESR Monthly GDP Estimates

1810  CAN           Bank of Canada Governor Stephen Poloz speech at the Empire

                    Club of Canada

2130  US            API Weekly Statistical Bulletin

                       Crude Stocks, Net Chg (Bbls)

                       Gasoline Stocks, Net Chg (Bbls)

                       Distillate Stocks, Net Chg (Bbls)

                       Refinery Runs

2350  JPN  Oct      Orders Received for Machinery

                       Core Orders, M/M%                                  +7.5%

                       Core Orders, Y/Y%                                  -1.7%

2350  JPN  Nov      Money Stock, Broadly-defined Liquidity

N/A   FRA           OECD Pension Markets in Focus report launch

N/A   ITA           Italy: Immaculate Conception Day

N/A   EU            ECOFIN meeting of EU finance ministers 

Singapore Dollar Lower Late

                     Latest   Change
 USD/SGD               1.4090   -0.0030
 Overnight Rate        0.25%    -25 bps
 2-Year Bond Yield     1.18%    -3 bps
 10-Year Bond Yield    2.50%    -1 bps
 2-Year Swap Offer     1.87%    +1 bps
 10-Year Swap Offer    2.83%    -3 bps
 2-10-Year Swap Curve  96 bps   -4 bps
 SINGAPORE--The Singapore dollar continued to weaken against the U.S. dollar in late Asia trading on Tuesday as most investors stayed on the sidelines.

Late in Asia, the U.S. dollar was quoted at S$1.4090, compared with S$1.4120 around the same time Monday.

In a note to clients, OCBC said for U.S. Federal Reserve-specific cues, the market will look toward Janet Yellen's testimony at U.S. Joint Economic Committee on Thursday.

"Broad dollar strength at this juncture is less than universal and USD-SGD may remain trapped in a range," OCBC said in its note.

Singapore government bond yields fell, implying a rise in prices. Yields on the benchmark 10-year bond fell 0.01 percentage point to 2.50%, while the two-year bond yield dropped 0.03 percentage point to 1.18%.

 Write to P.R. Venkat at venkat.pr@dowjones.com

CHINA JOINS WORLD'S ELITE CURRENCY CLUB

By Ian Talley

China notched an economic milestone Monday, with the International Monetary Fund adding the yuan to its elite basket of reserve currencies, a move designed to spur greater liberalization in the world's No. 2 economy.

The decision -- effective next October -- confers international status on China's currency as the government starts to ease restrictions on its rigidly controlled exchange-rate and financial system. It also marks the start of a potentially more perilous course for China. A more freely traded yuan and open markets, down the road, could add volatility to China's trade picture and raise the risk of capital flight.

The IMF's decision will eventually put the yuan alongside the dollar, euro, pound and yen in the fund's reserve-currency basket, with the IMF giving more weight to China's currency than to either the yen or pound.

But while the decision is a boost for China's national self-esteem, itisn't likely to drive a huge surge in yuan buying. Nor is there much threat the yuan will soon displace the dollar as the world's pre-eminent reserve currency, especially given China's many political and economic challenges.

"This inclusion is clearly an important milestone in a journey . . . that will include certainly more reforms," IMF Managing DirectorChristine Lagardesaid after the board approved the yuan's inclusion.

Anointing the yuan as a reserve currency is in part a simple acknowledgment of China's economic heft: The country now accounts for more than 15% of the global gross economic output, nearly triple what it was a decade ago.

And for the Chinese, the yuan's higher status is part of a larger strategy to boost the country's economic leverage. The government has ramped up lending to foreign governments, greatly expanded trade settled in yuan and created emergency credit facilities for other governments. Earlier this year, it launched the Asian Infrastructure Investment Bank, an institution analysts say was designed in part to rival the Washington-based World Bank.

Still, inclusion of the yuan in the IMF basket is in large part symbolic. The IMF uses the reserve basket to denominate its emergency loans, not to create an internationally traded asset.

Whether the yuan is embraced by central banks as a reserve currency will hinge on Beijing's success in deepening its financial system and adding far greater transparency to the inner workings of its economy.

Over the past year, Beijing has rolled out a series of policies -- including freer interest rates and easier foreign investor access -- to meet the IMF's criteria for yuan inclusion in the IMF's Special Drawing Right lending basket.

IMF staff say the yuan easily met the first measure: The currency must be issued by a major exporter. But IMF economists in August questioned whether the currency met the second benchmark of being "freely tradable."

Beijing authorities subsequently rolled out several more financial-sector overhauls, including a devaluation that the authorities said was intended to make the yuan's value more market based.

U.S. officials privately question the yuan's ripeness for reserve-currency status but also see the step as aiding efforts by reformers within the People's Bank of China to liberalize the country's economy. The U.S. Treasury issued a short two-line statement saying it supported the IMF staff recommendation to include the yuan.

After the IMF's announcement, China's central bank pledged to accelerate efforts to overhaul the country's financial system, further open its markets and keep the yuan largely stable.

Inclusion of the yuan "means the international community expects China to play a more active role in global economy and finance," the People's Bank of China said. "China will speed up the effort to promote financial reforms and opening."

Eswar Prasad, a Cornell University economist and former top China hand at the IMF, said the IMF's decision will strengthen the hands of economic reformers but warned of obstacles ahead.

"Domestic opposition to further financial-sector reforms and market-oriented liberalization measures remains fierce, and this decision by itself is unlikely to shift the balance substantially," he said.

The more China opens up its markets, the more it exposes its economy to the risk of capital flowing out. If China were to open up its markets more broadly, cooling growth prospects could turn such investor exodus into a stampede of cash out of the country, as many emerging markets have experienced in recent months.

Some fund watchers also say that support in the international community for the move is partly political consolation for the failure of the IMF to overhaul the lending institution's governance structure to give China and other emerging-market nations more of a vote in line with their evolving economic heft in the world.

The decision by U.S. lawmakers to repeatedly reject ratification of a governance deal is a sore point for China and other developing powers. They say that snub by the shareholder-run IMF is prompting them to create their own international economic institutions. Awarding Beijing's currency reserve status is designed in part to encourage China's government to greater international political and economic responsibility.

Several U.S. lawmakers who have long castigated China for its currency policy criticized the IMF's decision.

"This decision does nothing but validate China's history of cheating on its currency," said Sen. Bob Casey (D., Pa.). Sen. Charles Schumer, (D., N.Y.), said "the IMF is choosing to reward China's currency manipulation instead of combating it."

Failure to win IMF reserve-currency status would have also been an embarrassment for China's leadership as it takes over the rotating presidency of the Group of 20 major economies next year.