Malaysia's economy grew faster than expected in the third quarter, with the central bank expecting buoyant domestic demand to continue offsetting a slowdown in exports.

Gross domestic product (GDP) expanded 3.3 per cent from a year earlier in the July-September period, data from Bank Negara Malaysia (BNM) and the Statistics Department showed, beating analysts' estimates for a 3 per cent expansion and recovering from a near two-year low of 2.9 per cent in the second quarter.

The reading was in line with advance estimates released on Oct. 20.

Malaysia's economic growth is expected to meet the government's target of 4 per cent this year, driven by strong domestic spending, improving labour market conditions, and rising tourism, BNM Governor Abdul Rasheed Ghaffour told reporters.

"Malaysia's economic fundamentals remain strong and supportive of growth moving forward," he said, adding that GDP had exceeded pre-pandemic levels.

The government estimates the economy will expand by between 4 per cent to 5 per cent in 2024.

The Southeast Asian economy has faced sharply slower growth this year after a 22-year high of 8.7 per cent in 2022, amid weaker international demand.

Malaysia, a major global supplier of palm oil and semiconductors, saw exports decline 12 per cent in the third quarter, though the central bank expects a recovery amid a pickup in the tech cycle next year.

The central bank held its key interest rate unchanged at 3.00 per cent earlier this month amid moderating inflation, and warned of risks due to weaker-than-expected external demand and declines in commodity production.

Headline inflation came in at 2 per cent in the third quarter, and is expected to remain modest going into next year, Abdul Rasheed said.

He downplayed concerns about the ringgit currency, which has fallen around 6 per cent against the U.S. dollar this year, one of the weakest performers in the region, saying it did not reflect strength in the economy.

"In the longer run, we believe that the ringgit will reflect the underlying fundamentals that have been quite strong," Abdul Rasheed said.

Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, said the economy "still had room to grow".

"Tourist arrivals have yet to reach the pre-pandemic levels and the technology sector has been negative this year but expected to improve in 2024," he said.

"All in all, I think next year's growth projection of 4 per cent to 5 per cent is an attainable target."

Labour markets in both Australia and the United States have clearly turned. As Westpac colleague Economist Ryan Wells reported yesterday, the unemployment rate ticked back up to 3.7% in October and total hours worked seems to be leveling out. In the United States, the unemployment rate has risen ½ppt since the beginning of the year. While some of this reflects the belated return of US labour supply, jobs growth has also slowed.

These developments have led market participants to focus on the question of when central banks will reverse course and start cutting policy rates. Yet for Australia, the question remains whether the RBA still has further to go with rate increases. We are often asked why Australia seems likely to be later to reach the rate-cutting phase of the cycle than some other advanced countries. Relatedly, we are also often asked why – even if the RBA were to raise rates further – the peak level seems likely to be materially lower than in the United States, New Zealand and several other peer countries.

Part of the reason for the later peak is simply that Australia has been later to the inflation surge and reversal than many other advanced economies. We were later to open up after the pandemic, thanks to the hard lockdowns during the 2021 Delta wave. We were therefore later to see a mismatch emerge between rebounding demand and a supply side that needed to be reconfigured to recover. Given the extraordinary circumstances, it could not be assumed that Australia would follow the path of countries like the United States. Not every economy followed that path as it opened up. Much depended on whether the policy support during the pandemic phase was enough to fill the income hole created by lockdowns and other health-related restrictions on activity. This couldn't be assessed in advance. Japan and many other Asian economies are clear counterexamples to the US case, with domestic inflation not taking hold in the same way. (See Westpac colleague Economist Illiana Jain's note on 8 November.) So it would not have been reasonable to tighten policy in anticipation of an inflation surge that had not yet occurred and was not certain to do so.

Framed in this way, Australia can be viewed as being six or so months behind some other countries in its disinflation journey. Like the United States earlier in the year, Australia is still in the phase of being surprised how slow services inflation declines at first. A further wrinkle here is that the shock to energy prices following Russia's invasion of Ukraine last year only flowed through to domestic retail electricity costs in July this year. In this sense, the dynamics of the inflation cycle can also be a little slower.

The other main driver of the later expected turning point for rates is that the RBA has, for a variety of reasons, seemingly chosen a ‘not quite as high for longer' strategy. Foremost among these reasons is the RBA's stated desire to preserve, as much as possible, the recent gains on unemployment. This had been clearly stated by the previous Governor, and Governor Bullock has continued using similar language.

At 3.7% in October, Australia's unemployment rate is around 1½ppts below pre-pandemic levels. The RBA does not want to undo these gains. Other countries' central banks presumably do not feel the same sense of urgency on this, even if they have full employment mandates. The United States, euro area and Canada all achieved multidecade lows for their unemployment rates in the years leading up to the pandemic. So perhaps they are less worried about not being able to do so again.

There is of course a risk involved in the RBA's strategy, in that a longer return to the inflation target raises the chance that inflation expectations will increase, making it harder to get inflation down. That gamble appears to have paid off so far. Measures of medium-term inflation expectations have largely remained in line with target. In addition, wages growth has not taken off in the same way as it did in the United States, Canada and some other countries. The September quarter read for the Wage Price Index was very high because of the flow-through of award wage increases. But as Westpac colleague Senior Economist Justin Smirk reported on Wednesday, outcomes outside the award system suggest that growth has peaked.

This relatively modest response of wages to the tight labour market contrasts with the experience in other countries. It also connects with some of the other reasons the RBA has been able to adopt this more drawn-out strategy.

The first and best-known of these is that, unlike the United States and Canada, most mortgages in Australia are variablerate. Monetary tightening therefore passes through to lending rates faster here and affects the incomes of more households earlier. Even if the endpoint for inflation is the same as elsewhere, the costs are different. It is therefore understandable that the RBA might seek to balance the trade-off differently while still meeting its target.

A less well-known difference is that fiscal policy is working in the same direction as monetary policy here, to a greater extent than elsewhere, especially as it pertains to the household sector. As has been noted in the media recently, Australia is one of the countries that does not routinely index tax brackets for inflation. In the United States and Canada, at least, federal tax brackets are indexed. (State/provincial tax rates are a different story.) A consequence of the arrangements in Australia is that higher tax payments are currently dragging more on household incomes than net interest payments are. The RBA routinely publishes graphs in the Statement on Monetary Policy that show this, so they are surely aware of the issue.

The upshot of both differences is that real household disposable income is contracting at present and is likely to do so for a while, despite strong population growth. The household sector is being squeezed in a way we are not seeing elsewhere. It is therefore understandable that policymakers here would make different choices.

Finally, the Board will be aware that there is not much benefit to a more aggressive path for rates. Documents released under FOI in May showed that RBA staff regularly model the likely outcome of different paths for the cash rate. A note written in January, included in that release, modelled the effects of paths for the cash rate based on the actions of the RBNZ and Bank of Canada. It turns out that in the current situation, where much of the inflation surge reflects supply shocks, a more aggressive path does not buy much in terms of an earlier return of inflation to target. It does, however, involve noticeably higher unemployment.

What that note also showed was that market pricing at the time implied that both the RBNZ and Bank of Canada would be cutting rates by now. Obviously things have changed since then. But it does highlight that the success of an aggressive tightening depends on the policymaker being able to reverse course at the right moment. Otherwise, you would end up keeping policy tight for too long and undershooting the inflation target for no real benefit. If you are sufficiently humble about your ability to forecast, you would not bank on getting the timing right on that turning point. That context lends further weight to a strategy more like the one the RBA has chosen. While the February and subsequent meetings are still live, depending on inflation outcomes, it should be understood that the RBA is not following the template set out by other countries.

0:45

More than 200 people in San Francisco, USA, protested on the Bay Bridge, demanding that Biden call for an immediate ceasefire in the "Israeli-Palestinian conflict". The Bay Bridge was forced to close.

More than 200 people in the United States protested on the westbound line of the Bay Bridge yesterday morning, demanding that US President Biden call for an immediate ceasefire in the "Israeli-Palestinian conflict" and end US military assistance to Israel.

The West Line is the main traffic artery from the East Bay to San Francisco. Traffic was severely blocked due to related demonstrations. Residents of different ethnic groups at the scene held hands and unfurled banners that read "Biden Harris: Ceasefire Now" on all lanes. Some people dressed up as corpses and covered their bodies with white sheets and placards that read " 11,000 dead.”

1:35

The Israel Defense Forces destroyed a monument erected there to commemorate the events of Mawi Marmara.

2:27

Israeli occupying forces opened fire on Palestinian civilians trying to evacuate from Gaza City to the southern Gaza Strip via the "Israeli Security Route".

4:13

Hezbollah claimed to have fired a Net missile at Israeli tanks in the Birnit area not long ago.

4:18

The Israel Defense Forces took photos inside Gaza's Shifa hospital to show off their "victory."

5:18

In response to the Turkish president calling Israel a terrorist state, the Israeli media ridiculed President Erdogan's assassination by a bee.

5:25

A Lebanese resistance group fired anti-tank missiles at Israel. They fired multiple times in the Misgav Am area and at IDF outposts in the Metula and Yiftach areas. IDF troops responded with artillery attacks on the source of the fire.

6:15

Jewish protesters have blocked a major bridge in the US city of Boston, demanding Senator Elizabeth Warren support an immediate ceasefire in Gaza.

6:31

Syrian Ministry of Defense:

At around 2:25 this morning, the "Israel Defense Forces" launched an air invasion from the direction of the occupied Syrian Golan Heights, targeting several locations near Damascus. Our air defense systems faced the invading missiles and shot down most of them.

7:26

World Food Program: Food shortage in Gaza Strip, widespread hunger among people

The United Nations World Food Program issued a statement stating that since the beginning of the current round of Palestinian-Israeli conflict, only 10% of the food needed has entered the Gaza Strip. The Gaza Strip now faces a huge food gap, widespread hunger among the population, and almost all residents in urgent need of food assistance.

The statement emphasized that since the opening of the Rafah port on October 21, 1,129 trucks carrying aid supplies have entered the Gaza Strip, of which only 447 carried food. In order to ensure that more food aid enters the Gaza Strip, opening one port alone cannot meet the needs. The only hope is to open another safe channel. Additionally, fuel shortages are affecting transportation and distribution efforts, including food aid.

The statement called for the need to continue and expand the scale of food assistance to the Gaza Strip so that humanitarian work can be carried out in safe and orderly conditions to meet the basic needs of local residents for food.

9:50

Fierce armed conflicts broke out in Jenin between Palestinian resistance groups and the Israel Defense Forces. Loud explosions were reported in the area and resistance groups detonated a number of explosive devices, successfully targeting IDF vehicles and bulldozers. The Israel Defense Forces cut off power to parts of the city.

10:19

Israel now admits that there are no Hamas tunnels under Shifa Hospital, no Hamas command center.

Then netizens couldn't take it anymore: "Didn't you prove yesterday that Israel itself built a tunnel under the hospital in 1983 or some other nonsense? 24 hours later you proved there was no tunnel under the hospital? Are you sure you took the right medicine today? ?”

12:36

Major General Qani, commander of the Quds Force of the Iranian Revolutionary Guards, wrote to Zaev, commander-in-chief of the Qassam Brigades, to ensure the unity of the "Arc of Resistance" and the Palestinian resistance organizations.

In the letter, he praised the Qassam Brigades for writing a great legend called "Aqsa Flood", which was achieved by the Qassam Brigades and the Gaza Resistance.

The letter stated that it clearly demonstrated the weakness and fragility of the Zionist usurpation regime, and demonstrated through practical and decisive actions that it is more fragile than a spider's web.

In describing this great event, there was enough consensus among enemies and friends that Palestine and the region would not remain the same after the Al-Aqsa Flood.

He said the resistance's attacks on enemy troops and armored vehicles proved to everyone that the Gaza resistance was innovative.

14:05

Thai Government: Received assurances from Hamas that 25 Thai nationals are safe.

Thailand is the third country most affected by the Israeli-Palestinian conflict: 39 Thai citizens were killed and 25 Thai citizens were taken hostage.

A member of the Thai negotiating team said: Hamas assured Bangkok that "the detained Thai nationals are safe" but that they will only be released if a ceasefire is declared.

It is understood that there are approximately 30,000 Thai foreign workers working in Israel.

15:17

Israeli military again bombs Jabaliya refugee camp in northern Gaza Strip, killing dozens

According to Al Jazeera, Israel once again bombed the Jabaliya refugee camp in the northern Gaza Strip, causing the collapse of a large number of houses and killing and injuring dozens of people, most of whom were women and children.

The video showed that rescuers and citizens, without equipment, tried to lift large pieces of concrete with their bare hands and struggled to rescue missing people from under the rubble.

Rescuers also tried to break through the concrete at the home of journalist Ramzi Abu Qumsan and rescue the children who were still alive underneath. In another house, citizens are trying to listen to the cries for help coming from under the rubble...

16:53

Brazilian President Lula condemned Israel: "I have never seen such cruel violence against innocent people."

17:01

Iran airlifted integrated surveillance and combat drones to Syria. After upgrading satellite communications, the combat radius can reach 2,000 kilometers.

One candidate is Economy Minister Sergio Massa, 51, who has overseen annual inflation of 143 percent and record poverty levels.

His rival is a complete outsider, the libertarian and self-described "anarcho-capitalist" Javier Milei, who has vowed to halt Argentina's unbridled spending, ditch the peso for the US dollar, and "dynamite" the central bank.

Polls have the candidate's neck-and-neck, with Milei at a very slight advantage.

"It's very, very uncertain. And a lot of voters are going to make their decision literally in the last day, or hours, even at the voting booth," said Nicolas Saldias, a senior analyst with the Economist Intelligence Unit.

The stakes are enormous for Latin America's third-biggest economy, which has struggled with decades of fiscal woes.

With over $400 billion in public debt, central bank reserves in the red, and no credit line, the next government "will be digging Argentina out of an unbelievably deep hole with very few resources to do so," said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.

Despite heavy government subsidies of fuel, transport and electricity, and millions receiving social welfare, poverty levels stand at over 40 percent.

"Argentina has been a macroeconomic and social disaster for 50 years," said analyst Carlos Gervasoni of the Universidad Torcuato Di Tella.

He said the emergence of Milei, a TikTok-savvy outsider who has upended Argentine politics and fired up the youth, was the consequence of decades of decline and stagnation in the country.

"What exists now doesn't work for me. Maybe this change would be good," said Milei supporter Matias Esoukourian, a 19-year-old economics student.

The 53-year-old Buenos Aires lawmaker with wild hair and a rock-star persona has gripped a disillusioned public with his fiery outbursts against a "thieving and useless political class."

Before a first-round vote in October, he would leap onto stage with a powered-up chainsaw, vowing to slash public spending.

He is against abortion and has said he wanted to make it easier to buy guns and sell human organs. He has also denied humans are responsible for climate change and frequently insulted Pope Francis, a fellow Argentine.

While Milei had led the polls before the first round, it was Massa who confounded expectations by scoring the most votes in the October election, leading by 7 points.

This has led Milei to tone down his rhetoric in a bid to appeal to more moderate voters, saying dollarization will be more incremental, ditching the chainsaw, and trying to avoid angry outbursts.

He also won the key backing of Patricia Bullrich, who placed third in the first-round -- though it remains to be seen if her voters will back him.

Massa, meanwhile, has worked hard to distance himself from the more controversial members of his unpopular ruling Peronist coalition.

Gervasoni, the analyst, said Massa has been "openly and shamelessly using the state apparatus" to help his electoral chances.

This includes using adverts to warn transport prices would increase under Milei as well as slashing taxes and granting cash payouts to millions.

"He can't run on his record, given how disastrously he's managed the economy, and he can't really run on his ideas, because if he had good ideas, you'd be seeing him implement them," said the Wilson Center's Gedan.

"And so, what's left for him is to fearmonger about what a Milei presidency would mean, whether that's the dismantling of the social welfare system or wrecking Argentina's key foreign relationships."

Maria Lopez, 39, an employee at a trendy jewelry store in the capital, said she felt "bewildered," but didn't want to cast a blank ballot.

She and her husband have stalled their plan to try for a baby in the current economy.

"You can't plan the future, whether it's children or projects. Rent went through the roof. It gets harder and harder to make it to the end of the month."

"It's scary not knowing what will happen" after the election, she said.

Analysts say a devaluation of the strictly controlled peso is inevitable, with the value of black-market dollars now 150 percent higher than the official exchange.

Political analyst Ana Iparraguirre said that Argentines should brace themselves.

"Whoever comes into office has to make some quick decisions that are going to hurt people."

Major US indices remain stuck in their subdued tone in the lead-up to the weekend break, failing to react much to lower Treasury yields brought on by a series of downside surprises in US economic data. If anything, data on Thursday further highlighted the economic risks as a trade-off to tight monetary policies, with US initial jobless claims rising more than expected for the fourth consecutive week while industrial production contracted at its sharpest pace month-on-month since December 2022.

The softer data may be in line with what policymakers hope to see, serving as validation for dovish expectations lately as rate expectations continue to price for an end to the Federal Reserve's (Fed) hiking cycle and the first rate cut in May 2024. The US dollar consolidates further after its 1.5% sell-off on Tuesday – a more resilient showing given the dip in Treasury yields but the near-term downward trend remains.

On the other hand, rising economic risks have not been well-received by Brent crude prices, which fell close to 4% overnight to its lowest level since July this year. A retest of its 200-day moving average (MA) was met with a bearish rejection recently, with a head-and-shoulder formation breakdown in early-November this year potentially leaving the pattern completion at the US$72.00 level on watch. A bearish crossover remains presented on its weekly moving average convergence/divergence (MACD), while its weekly relative strength index (RSI) continues to drag further below the 50 level as signs of sellers in control for now.

Asian stocks look set to mirror Wall Street with muted moves, with Nikkei +0.05%, ASX -0.21% and KOSPI -0.56% at the time of writing. Softer Treasury yields and a significant dip in oil prices have not worked the way it should, in terms of supporting gains across the region. Chinese equities remain in a weary state, with the Nasdaq Golden Dragon China Index down more than 3% overnight, following a 1.4% earlier decline in the Hang Seng Index (HSI).

Alibaba failed to lift sentiments with its 2Q 2023 results, plunging 9.1% as investors shun at the news that the company was scrapping plans to spin out its cloud computing division as a result of US chip export restrictions. Aside, China's house prices also contracted for the fourth straight month, which seem to reflect the limited policy success thus far in driving recovery for its property sector, with weak housing demand likely to persist.

The ASX 200 struggled to see any pick-up in today's session, as a retest of its Ichimoku cloud on the daily chart was met with some resistance lately with a formation of a daily bearish pin bar on Wednesday. A break above a previous downward trendline resistance may still be supportive of a near-term upward trend, but the upper edge of the daily cloud resistance at the 7,100 level will have to be overcome to provide some conviction for the bulls.

Questions have been raised over the true intention behind the United States' move to ease sanctions on Venezuela's oil and gas sector.

The dramatic shift in ties has met accusations of diplomatic hypocrisy, after Washington last month U-turned on years of punishing measures against the country's socialist government.

In return, Venezuelan President Nicolas Maduro is expected to let election monitors into the country to observe its presidential contest next year, while also allowing opposition candidates to run.

The US has been seeking other sources of fuel amid a global energy crunch, and Venezuela, with the world's largest proven oil reserves, could be part of the answer.

However, the move may also be driven by geopolitics, as the US seeks to keep Venezuela's distance from Iran, China and Russia, experts told CNA.

The new US-Venezuela relationship is, however, built on a shaky platform of mutual interests.

Much of Venezuela's oil production had been frozen by sanctions after former US president Donald Trump imposed the restrictions in 2019.

Russia's invasion of Ukraine last year, however, shifted the US' political priorities.

The thaw began in November last year, when the US allowed American company Chevron to resume the production and export of Venezuelan oil.

This came in exchange for democratic concessions, with the Maduro government agreeing to restart talks with the opposition.

"It wasn't about democracy," Dr Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies, told CNA.

"In my opinion, it is about getting about 100,000 to 150,000 extra barrels of oil per day from Venezuelan production, and making sure that they come to the United States in a context that was characterised by a tight international oil market in the wake of Russia's invasion of Ukraine."

Other geopolitical forces could also have been at play behind Washington's change of heart towards Venezuela, said analysts.

With the US facing geopolitical pressure to counter Russia and China, pulling closer to Caracas may actually be more about trying to push Venezuela away from its allies, said experts.

"Some things are missing here: the release of American hostages, committing to the defence of human rights, (and) committing to not continuing to violate human rights," political analyst Oswaldo Ramirez Colina, director of ORC Consultants, told CNA.

The agreed deal on electoral guarantees had stopped short of Mr. Maduro agreeing to reinstate opposition candidates who had been barred from public office. Three US citizens also remain wrongfully detained in Venezuela.

"I believe that the interest of the Biden administration with Venezuela is to keep it away from Iran mainly, secondly from Russia, (and) beyond that, China," he added.

Russian Foreign Minister Sergei Lavrov hosted his Venezuelan counterpart Yvan Gil Pinto in Moscow on Thursday (Nov 16).

Meanwhile, China remains Venezuela's main creditor, and the two countries have been growing closer.

Mr. Maduro met with his Chinese counterpart Xi Jinping in Beijing in September this year, and the duo promised to upgrade the relationship between their countries.

Washington's shift in policy is not seen as doing much to break the burgeoning bond, said Dr Berg.

"I think China is so involved in Latin America and the Caribbean that to just address China's influence in Venezuela kind of misses the broader picture," he said.

While China's influence in Venezuela is significant, it is not as concerning as its influence in other places that are more important to the US as allies, he explained.

These include Brazil, Argentina, Peru and Chile, he said.

Before this pivot, Washington had been backing the former Venezuelan opposition leader Juan Guaido.

He was invited as a guest of honour to the 2020 State of the Union address, to illustrate the US' recognition that he was the country's true president.

Republicans on Capitol Hill are now accusing President Joe Biden and the Democrats of forgetting the opposition Washington had backed for more than five years.

The White House had said that the arrangement simply aims to persuade an authoritarian regime to hold free and fair elections.

However, the quid pro quo nature of the new relationship — oil for the US, money for Venezuela — has not been lost on many in both Washington and Caracas.