Gold declines in Asia

Gold declines in Asia

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On Friday, Gold dived in Asia in cautious trade as market participants mulled the latest Fed minutes as well as comments from Treasury Secretary Steven Mnuchin who told that he hopes for a tax package to pass Congress by August as it might help to forecast rate lift paths this year.

In New York, April delivery gold futures dipped 0.12%, trading at $1,249.85 a troy ounce. Additionally, copper futures managed to rise 0.57%, being worth $2.655 a pound as market participants kept a close eye on labor disputes at key mines in Indonesia and Chile where work has ceased for nearly two weeks.

Overnight, gold futures grew to a 15-week peak after the minutes of the most recent Fed policy gathering turned to be more dovish-than-expected, thus weakening hopes of a March interest rate lift.

Gold started the trading session in the ascendancy, affected by a tumble in the greenback after Wednesday’s Fed minutes dampened expectations that a rate lift is in play for March. Some Fed members happened to be reluctant to back a raise of interest rates, as they wait for further details on President Trump’s economic plans to assess how Trump’s policies would influence economic growth.
 
Greenback is poised for weekly losses after Fed minutes

Greenback is poised for weekly losses after Fed minutes

Greenback is poised for weekly losses after Fed minutes

On Friday, the evergreen buck clawed back some ground, having skidded to a two-week minimum against the Japanese yen, but it was still on track for weekly losses after the Fed gathering minutes disappointed greenback bulls.

The evergreen buck tacked on 0.1%, hitting 112.76 yen, though it was just off a two-week minimum of 112.55 reached overnight and down 0.2% for the week.

The greenback failed to shrug off pressure from the Fed minutes published on Wednesday, which turned to be more dovish than some traders had expected.

US Treasury Secretary Steven Mnuchin's remarks also applied pressure on the greenback. In his first televised interviews he told that any policy steps the Trump administration takes would probably have a limited impact in 2017.

The yield on 10-year American Treasuries descended to a two-week minimum of 2.372%overnight and it was last at 2.375%, which is below Thursday's American close of 2.388%.
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Crude clings to revenues as stockpiles surge for seventh week

Crude clings to revenues as stockpiles surge for seventh week

Crude clings to revenues as stockpiles surge for seventh week

On Friday, crude prices held revenues on data demonstrating that American stockpiles added for a seventh straight week, though at a pace, which was quite below expectations, and news of crude being sold out of storage in Southeast Asia.

American West Texas Intermediate CLc1 futures were intact at $54.45 a barrel, pulling back from early losses. WTI futures found themselves on track for a weekly profit of nearly 2%, which would be its biggest gain so far this year.

Brent crude futures LCOc1 rose 3 cents, hitting $56.61 and they was on track for a weekly revenues of about 1.4%.

American crude inventories inched up by approximately 564,000 barrels in the week to February 17, ascending for a seventh week, though below experts’ expectations for a surge of 3.5 million barrels, as the Energy Information Administration informed.

The Organization of the Petroleum Exporting Countries as well as other crude producers including Russia have already promised to minimize crude output by nearly 1.8 million barrels per day in order to tackle a global glut, which has kept crude prices depressed since 2014.
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Asian stocks dip off 1-1/2-year peak

Asian stocks dip off 1-1/2-year peak

Asian stocks dip off 1-1/2-year peak

On Friday, Asian stocks took a breather, decreasing from 1-1/2-year peaks as material shares were affected by sudden dips in copper as well as other commodity prices while traders estimated Washington’s stance on currency and tax policies.

MSCI's broadest index of Asia-Pacific shares outside Japan decreased 0.5%, giving back part of this week's revenues, although it’s likely to log its fifth straight weekly soar.

Material as well as resource stocks were the biggest drag as they were spooked by big declines in the price of iron ore, copper and other commodities.

Hong Kong's Hang Seng sagged 0.5%, Japan's yen-sensitive Nikkei N225 dipped 0,5% too, while China's mainland stocks SSEC didn’t change.

European stocks are supposed to be soft, with spread-betters looking to dips of 0.1% in key European indexes, including Germany's DAX as well as Britain's FTSE.

On Wall Street, the Dow demonstrated a record peak for a tenth straight session, which is the longest sequence of record setting since 1987.
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Australian shares decrease at close of trade

Australian shares decrease at close of trade

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On Friday, Australian stocks dipped after the close, as losses in the Metals & Mining, Materials as well as Resources sectors brought stocks down.

The S&P/ASX 200 edged down 0.79%.

The best performers of the session on the S&P/ASX 200 were Nextdc Ltd, Asaleo Care and Resolute Mining Ltd. They leapt respectively 12.30%, 9.74% and 5.35%.

The worst performers of the session were represented by Myob Group Ltd, Bluescope Steel Ltd and Whitehaven Coal Ltd. They dropped respectively 6.91%, 4.70% and 4.38%.

Dropping shares overtook growing ones on the Australia Stock Exchange by 670 to 442, while 328 ended intact.

The S&P/ASX 200 VIX, tracking the implied volatility of S&P/ASX 200 options, gained 8.51%, reaching 12.133.

The currency pair AUD/USD edged down 0.05%, being worth 0.7710. Besides this AUD/JPY inched up 0.17%, trading at 87.03.

The US Dollar Index Futures managed to grow 0.08%, hitting 101.03.
 
Bitcoin hits record peak on ETF approval speculation

Bitcoin hits record peak on ETF approval speculation

Bitcoin hits record peak on ETF approval speculation

On Friday, the bitcoin reached a fresh record peak on the back of speculation that the Securities & Exchange Commission could officially approve a U.S.-issued ETF on the digital currency, thus driving its attractiveness for institutional investors.

As the CoinDesk Bitcoin Price Index states, which averages prices from the key exchanges, prices of the crypto-currency hit an intraday peak of $1,206.60. It pushed the bitcoin past the previous all-time record of $1,165.89 achieved in November 2013.

Last it gained only 0.33%, being worth $1,182.25.

On the New York-based itBit exchange, bitcoin ascended by 0.03%, reaching $1,187.82, drifting away from an intraday peak of $1,215.93.

Other big exchanges such as Kraken, Bitfinex as well as BitStamp demonstrated mixed trade in the cryptocurrency.

The digital currency hit record peaks on speculation, which pointed to the fact that the SEC would approve one of the three proposed bitcoin-focused exchange-traded funds by an approaching deadline.
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China doesn’t intend to use currency devaluation to its advantage

China doesn’t intend to use currency devaluation to its advantage

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On Friday, China told that it doesn’t intend to use currency devaluation to its advantage in trade, thus responding to an assertion from American President Donald Trump that China appears to be the "grand champion" of currency manipulation.

On Thursday, Trump told in an interview with Reuters that he hadn’t held back in his assessment that China dares to manipulate its national currency, hours after his new Treasury secretary promised a more methodical approach to analyzing Beijing's foreign exchange practices.

Chinese Foreign Ministry spokesman Geng Shuang told that he expected the United States to view the exchange rate issue fully and properly.

Donald Trump has often accused China of keeping the Yuan artificially low against the greenback to make Chinese exports more affordable, thus stealing US manufacturing jobs.

However, he didn’t act on a campaign pledge to declare this country a currency manipulator on his first day in office.
 
USD Softens As Markets Ponder Fiscal Stimulus

USD Softens As Markets Ponder Fiscal Stimulus

Rates: Core bond sentiment remains positive
Core bond trading will remain sentiment-driven and technical in nature. End-of-month buying could come into play. The US Note future might be gearing up for a new test of 125-09+/16 resistance, especially if equity markets correct lower after the recent record run. The German 10-yr yield closes in on 0.17%/0.20% support.
Currencies: USD softens as markets ponder fiscal stimulus
Yesterday, the euro decline halted as tensions on France eased. At the same time, the dollar lost ground as US Treasury Secretary Mnuchin indicated that the implementation of fiscal reforms will take time. Today, USD softness might persist as there are no important eco data to support the dollar.

US equities ended flat, ignoring the dollar and US Treasuries' correction on the reflation trade. Overnight, most Asian stock markets trade around 0.5% lower.
President Donald Trump declared China the 'grand champions' of currency manipulation, just hours after his new Treasury secretary pledged a more methodical approach to analysing Beijing's foreign exchange practices.
RBA governor Lowe, said that the Australian economy would benefit little from cutting interest rates already at record lows, putting the onus on the government to make fiscal reforms and find ways to stimulate demand.
Dallas Fed Kaplan urged his colleagues at the US central bank to seize opportunities to raise interest rates, even as he said that they should keep their options open ahead of a policy meeting next month.
Emmanuel Macron has outlined a Nordic-style economic programme mixing fiscal discipline and public spending, amid mounting pressure to clarify his policies two months before France's presidential election.
Investors this year have focused on business-friendly policies they expect to come from Washington. But Fitch has warned that a potential debt-ceiling debate may come into focus once again.
UniCredit said shareholders committed to 99.8% of its €13B rights offering, supplying it with fresh funding vital to the turnaround plan. The lender secured pledges to buy €1.6B new shares and will seek buyers for the rest from Feb. 27.
Today's eco calendar is uninspiring with only national EMU confidence dat



Euro sell-off slows, at least temporary.
Market uncertainty on France eased yesterday. Still, core bond yields again lost a few more basis points even, as risk sentiment was not negative. The slide of core (US & European) yields weighed on the dollar. The USD decline accelerated, as US Treasury secretary Mnuchin said it would take time to implement tax reforms and to see their impact on growth. EUR/USD closed the session at 1.0582 (from 1.0558). USD/JPY finished the day at 112.61 (from 113.31).
Overnight, Asian equity markets trade with modest losses. The global reflation is losing some momentum after yesterday's comments of US Treasury secretary Mnuchin. The dollar is stabilizing just above yesterday's intraday lows. USD/JPY is trading in the 112.80 area. EUR/USD is changing hands in the 1.0580/85 area. Commodities are also in a soft spot with iron ore taking the lead in the correction. However, the correction in (some) commodities has little impact on the likes of the Aussie dollar. AUD/USD is holding in the 0.77 area, near the recent highs.
Today, the eco calendar is again uneventful. In the euro area, there are only second tier national releases. In the US, the January New home sales are expected to be up a 6.4% (571K) after a 10.4% (536K) decline in December. In general, housing is still doing fine. On a monthly basis we side with the market expectation of a rebound. Final Michigan consumer sentiment is expected to be marginally higher at 96 compared to the preliminary figure of 95.7. It remains near the highs of the post-recession era. We doubt that the US data will have a lasting impact on USD trading. Early this week, French election worries fuelled uncertainty on Europe and weighed on the euro. The political uncertainty on France eased after centrist Bayrou joined forces with Macron. EUR/USD rebounded yesterday and the rebound accelerated as the dollar suffered from soft comments of US treasury Secretary Mnuchin on the tax reform. We don't expect the EUR/USD rebound to go far. Even so, the day-to-day USD momentum is softening and this might persist ahead of Trumps appearance before Congress next Tuesday. As long as there is no clarity on the fiscal stimulus package, any further USD gains will have to come from strong US data. We maintain a cautious on the dollar in a daily perspective. Especially USD/JPY looks vulnerable
Global context. The dollar corrected lower since the start of January as the Trump reflation trade slowed down. Two weeks ago, the dollar bottomed out, supported by Trump's tax promise. Underlying euro weakness due to political uncertainty in the area is a factor too. We see 1.0874 as solid resistance and favour a sell EUR/USD on upticks approach. The downside test of USD/JPY was rejected. USD/JPY 111.16 (38% retracement of the 99.02/118.66 rally) remains a key support. The comments of Yellen before Congress (and of other Fed members) were USD supportive, but had little lasting impact on yields. We keep a USD positive bias longer term, but remain more cautious on the upside potential of USD/JPY compared to USD/EUR.

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EUR/GBP

Sterling trades with a positive bias
Yesterday, sterling trading was order-driven and technical in nature. The UK currency regained some ground after a disappointing performance on Wednesday. EUR/GBP traded in the high 0.84 area in Asia after Wednesday's euro short squeeze, but drifted back to mid-0.84 area, despite the intraday rise of EUR/USD. The CBI retail sales data improved, slightly helping to maintain the sterling positive momentum. EUR/GBP closed the session at 0.8428 (from 0.8481). Cable jumped higher to close at 1.2556, supported by USD weakness.
Today, the UK eco calendar contains only the BBA loans for home purchases. A monthly decline is expected. Brexit might re-appear in the headlines, as markets look forward to the debate in the House of Lords early next week. EUR/GBP recently hovered in a tight range near the 0.8450 support. The BoE suggested that a rate hike is still not on the horizon, but for now it doesn't hurt sterling. Earlier this week, the (temporary) acceleration of the euro sell-off pushed EUR/GBP to the 0.84 area. Yesterday, EUR/GBP didn't profit from the EUR/USD rebound, suggesting some ST sterling resilience. Longer term, we have a sterling negative view, as the Brexit will negatively impact the UK economy. However, this is no issue at this stage. A sustained break below 0.8450 opens the way for a return to the EUR/GBP 0.8304 correction low, the next key support. We maintain a neutral bias on sterling short-term. Both EUR/GBP and cable show no clear trend.
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Euro Listless Ahead Of US Housing, Consumer Confidence

Euro Listless Ahead Of US Housing, Consumer Confidence

EUR/USD is showing limited movement in the Friday session. Currently, the pair is trading at 1.0580. On the release front, there are no eurozone events. In the US, the markets are forecasting mixed news from today’s key indicators. New Home Sales is expected to jump to 575 thousand, but UoM Consumer Sentiment is forecast to dip to 96.1 points.
The euro has been under pressure this week. On Wednesday, EUR/USD dropped below the 1.05 level, which last occurred on January 11. It’s been a rough February for the continental currency, which has dropped 2.0% in value, wiping out much of January’s gains. Will the euro get any support from the European Central Bank? That remains unlikely, as the ECB recently extended its asset-purchase program until December 2017. Although the eurozone is enjoying a moderate spurt in growth and higher inflation, the central bank appears in no rush to tighten monetary policy, which would be bullish for the euro. Analysts note that the ECB does not wish to make any dramatic moves close to crucial elections in Europe (France goes to the polls in April, followed by Germany in September). At the same time, “political risk” in Europe is affecting investor confidence and weighing on the euro. In June, Britain stunned the continent by voting to leave the European Union, throwing British-EU relations into crisis mode. In France, Marine Le Pen, leader of the far-right National Front, is the front-runner in the first round and could conceivably be elected president. Le Pen wants to take France out of the eurozone and has promised a referendum on French membership in the EU. Germany’s Angela Merkel, a pillar of stability on the continent, is in a tough election fight and voters may choose change rather than hand her a fourth term in office. ECB President Mario Draghi will likely be reluctant to make any major moves which could entangle the ECB in the hotly contested elections in France and Germany.
Market response to the Federal Reserve’s minutes has been muted. There were no surprises in the January meeting, which were slightly dovish in tone. The key statement in the minutes was that a rate hike “fairly soon” could be appropriate in order to head off an overheated economy. The minutes indicated that Fed policymakers remain confident that the central bank will raise rates gradually, given the strong performance of the US economy. At the same time, the minutes noted uncertainty about President Trump’s fiscal stimulus plan but little concern over the risk of inflation. So the million dollar question of when the Fed will press the rate trigger remains unanswered. Although pressure is slowly building towards a move by the Fed, there does not appear a sense of urgency to raise rates at the next meeting in March. According to the CME Group, the odds of a March hike are only at 17%, while the likelihood of a hike in either May or June stands above 40%.
 
Investors Turn Their Attention to Canada

Investors Turn Their Attention to Canada

The main event of the day is Canada's CPI for January. The headline rate is expected to have ticked up to +1.6% yoy from +1.5% yoy the previous month, while no forecast is available yet for the core rate. The nation's Markit manufacturing PMI for the month showed that as a result of higher input costs, manufacturers raised their prices at one of the fastest paces since early 2014. Therefore, we see the case for both rates to have risen. Nevertheless, considering January's yoy change in oil prices, we see strong possibility for the headline rate to have increased by more than the core, something that has already become evident in the CPI prints of many advanced economies. Coming on top of the remarkably strong employment data for the month, another improvement in the CPI rates is likely to be a welcome development for the BoC, which at its latest policy meeting signaled that a rate cut is still on the table should downside risks materialize. Accelerating CPIs could diminish somewhat the likelihood for the Bank to introduce any further easing, at least in the near term, and could prove positive for the Canadian dollar.
USD/CAD traded lower yesterday as the disappointment of Wednesday's Fed minutes kept the greenback pressured throughout most of the day. The pair fell below the support (now turned into resistance) barrier of 1.3120 (R1) to hit support at 1.3080 (S1). Rising Canada's CPI rates could prove the catalyst for a dip below that level, something that could initially aim for our next support of 1.3050 (S2). Another break below that territory is likely to target the psychological zone of 1.3000 (S3). With regards to the bigger picture, on the daily chart, we see that USD/CAD remains below the prior long-term uptrend line drawn from the low of the 3rd of May 2016. As such, we consider the medium-term outlook to be cautiously negative, which enhances the case for the pair to drift lower in the near future.
RBA Governor Lowe reiterates that the Bank is likely to stay on hold
Overnight, RBA Governor Philip Lowe testified before the House of Representatives Standing Committee on Economics. His comments reflected his Wednesday speech and as a result, the reaction in the Aussie was muted. The Governor noted that further easing would mean more borrowing and consequently, higher house prices. Too much household borrowing today can create problems tomorrow, he added. With regards to the exchange rate of the Australian dollar, he said that he would like the currency to be lower, but it's hard to say that it is overvalued. The fact that the Bank is most likely to keep its fingers off the easing trigger in the coming months, combined with the surge in iron ore prices, and the not so harsh comments on the Aussie's level, are the main reasons we expect the Australian currency to remain supported. We recall that one of our favorite proxies for further AUD appreciation is EUR/AUD, due to Eurozone's political risks.
EUR/AUD traded higher yesterday after it hit support at 1.3655 (S1) to stop near the 1.3725 (R1) resistance. Having in mind that a new poll on the French election yesterday showed that both Macron and Fillon got a pickup following Bayrou's withdrawal, we see the likelihood for the euro to continue its relief bounce. A break above the 1.3725 (R1) resistance is possible to result a move above the upper bound of the downside channel that has been containing the price action since the 30th of January, and perhaps aim for 1.3780 (R2) level next. However, even if the pair continues to trade higher in the days to come, we would treat such a recovery as providing renewed selling opportunities. The uncertainty surrounding the monetary union has nothing but diminished and as we head into the ballots, we expect the common currency to come under renewed selling interest. The broader outlook of EUR/AUD is also in line with our view that any further recovery is very unlikely to lead to a strong bull run. On the 10th of February, the pair broke below the downside support line drawn from the 10th of March 2016, which is a sign of acceleration in the longer-term downtrend. Therefore, we expect the bears to take the reins again at some point in the near future and aim for another test near the 1.3600 (S2) territory.
As for the rest of today's events
During the European day, we get France's and Sweden's consumer confidence indices, both for February. The French index is expected to have remained unchanged, while the Swedish one is expected to have declined marginally. In any case, neither of these indicators is usually a major market mover.
In the US, new home sales are expected to have rebounded in January, which appears normal to us following December's plunge. Despite a potential rebound, we remain somewhat pessimistic with regards to the future performance of the housing sector. Mortgage rates have spiked following Trump's election and as a consequence, banks have tightened restrictions on mortgage lending. We believe that affording a house may get more difficult in 2017 and could discourage potential buyers to even try applying for a mortgage. We also get the nation's final U of M consumer sentiment index for February.
 
Dow Winning Streak Under Threat On Friday

Dow Winning Streak Under Threat On Friday

Dow 10-day winning streak under threat as traders lock in profits;
Mnuchin dampens bullish sentiment on dollar in the near term;
Gold testing big technical resistance as USD pulls back.



The Dow's winning streak is set to be seriously tested on Friday, with US futures currently indicating that all three major indices will open around one third of a percentage point lower.
In the absence of much economic data today and with the Fed taking the day off from public appearances, it appears we may be seeing some profit taking from traders which could see all three indices end the session in the red for the first time in a couple of weeks. We do have new home sales and UoM consumer sentiment data due out in today's session but it may take something rather substantial to tempt buyers back in as we near the end of the week.
Yesterday's revelation by Steve Mnuchin that some of Trump's more stimulative measures such as tax reform will come later in the year appears to have taken the wind out of the sails of the dollar rally. Markets have rallied and the dollar strengthen since Trump's election victory on the expectation that stimulus will follow but it looks like we may have to wait a little longer and there's still little detail on what it will entail.
The insistence again though that this will be significant, with regards to tax reform, may be enough to continue to support stock markets for now, as seen by the Dow extending its winning streak on Thursday to 10 sessions, but it's not helping the dollar. The dollar has appreciated strongly since Trump's victory but with the timing of the stimulus coming later, markets are once again doubting the Fed's forecast of three hikes.
The drop off in the dollar has been the catalyst for Gold taking a stab at breaking through a big level of technical resistance. The $1,250-1,260 level is big for Gold and should we see it break beyond here then we could well be headed back towards $1,300, a move that looked incredibly unlikely only two months ago but one that has been spurred on by the ever-worrying political risk environment.
 
London Session Forex Recap – Feb. 24, 2017

London Session Forex Recap – Feb. 24, 2017

French INSEE consumer confidence: unchanged at 100 as expected
Italian industrial new orders y/y: -0.9% vs. 0.1% previous
Italian industrial sales y/y: 9.4% vs. 3.0% previous
U.K. BBA mortgage approvals: 44.7K vs. 42.6K expected, 42.23K previous
Canada’s CPI report will be released later

Forex traders were apparently taking cues from the risk-off vibes during today’s morning London session, since the higher-yielding Aussie and Kiwi got torpedoed. Meanwhile, the safe-haven yen and Swissy were in high demand.
Major Events/Reports:

Commodities climb, but oil falters – Commodities were mostly in positive territory during the morning London session. Oil was a very noticeable exception, however.

Precious metals were in the green.

Gold was up by 0.56% to $1,258.45 per troy ounce
Silver was up by 0.88% to $18.277 per troy ounce

The same can also be said of base metals.

Copper was up by 0.74% to $2.663 per pound
Nickel was up by 1.30% to $10,700.00 per dry metric ton

Oil benchmarks, meanwhile, went against the green tide, as mentioned earlier.

U.S. crude oil was down by 0.70% to $54.07 per barrel
Brent crude oil was down by 0.81% to $56.12 per barrel

The U.S. dollar index was down by 0.17% to 100.78 when the session ended. And that was very likely the reason for the broad-based commodities rally. As for the slide in oil prices, that was blamed by market analysts on disappointment over yesterday’s rise in U.S. oil inventories.

Risk aversion to end the week – European equity indices were in a sea of red during today’s morning London session.

The pan-European FTSEurofirst 300 was down by 0.86% to 1,457.60
The blue chip Euro Stoxx 50 was down by 0.94% to 3,298.50
Germany’s DAX was down by 1.20% to 11,807.00
The U.K.’s FTSE 100 was down by 0.64% to 7,224.50

Even U.S. equity futures were reeling in pain.

S&P 500 futures were down by 0.41% to 2,353.00
Nasdaq futures were down by 0.50% to 5,305.12

Market analysts blamed the intense risk aversion on banking shares getting crushed, particularly Standard Chartered and French and Italian banks. As for specifics, Standard Chartered got dumped when it reported that dividends would not be paid out, thanks to restructuring costs. Italian banks, meanwhile, were hit by worries over Italian government bonds. As for French banks, they were dropping apparently because of jitters related to the French presidential elections.

Bond yields fall – Another sign of risk aversion was the fall in global bond yields during the session.

French 10-year bond yields were down by 2.25% tp 0.957%
German 10-year bond yields were down by 11.44% to 0.209%
U.K. 10-year bond yields were down by 3.04% to 1.118%
U.S. 10-year bond yields were down by 0.89% to 2.367%

Major Market Movers:

AUD & NZD – Commodities rose during the morning London session. Even so, that didn’t help the Aussie and the Kiwi, since market players were apparently more focused on risk sentiment. And since risk aversion was the dominant sentiment, both higher-yielding currencies were feeling the pain.

AUD/USD was down by 30 pips (-0.40%) to 0.7684, AUD/CAD was down by 22 pips (-0.22%) to 1.0074, AUD/JPY was down by 71 pips (-0.82%) to 86.25

NZD/USD was down by 26 pips (-0.36%) to 0.7206, NZD/CAD was down by 15 pips (-0.16%) to 0.9449, NZD/CHF was down by 40 pips (-0.55%) to 0.7234

JPY & CHF – The risk-off environment may have been toxic for the higher-yielders. However, it was heaven for the safe-havens. As such, both the yen and the Swissy just plowed through their forex rivals during the session.

USD/JPY was down by 47 pips (-0.42%) to 112.24, CAD/JPY was down by 53 pips (-0.62%) to 85.60, NZD/JPY was down by 62 pips (-0.76%) to 80.91

USD/CHF was down by 23 pips (-0.24%) to 1.0033, CAD/CHF was down by 33 pips (-0.44%) to 0.7650, AUD/CHF was down by 49 pips (-0.63%) to 0.7709
Watch Out For:

1:30 pm GMT: Headline (0.3% expected, -0.2% previous), common (1.4% previous), median (2.0% previous), and trimmed (1.6% previous) readings for Canada’s CPI will be released
3:00 pm GMT: U.S. revised home sales (575K expected, 536K previous)
3:00 pm GMT: Revised University of Michigan consumer sentiment (upgrade from 95.7 to 96.0 expected)
 
Wall Street set to open lower as oil prices fall

Wall Street set to open lower as oil prices fall

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U.S. stocks were set to open lower on Friday as a drop in oil prices weighed and investors assessed if the "Trump rally" had gone too far too soon.
Oil prices were down about 1 percent after U.S. crude inventories rose for a seventh week, showing the market is still struggling to ease oversupply. [O/R]
President Donald Trump's promises of tax reforms, reduced regulations and increased infrastructure spending has helped spur equities to record highs.

The S&P 500 is up more than 10 percent and at all-time highs since the election. The Dow notched a record high for a tenth straight session on Thursday, its longest such streak since 1987.
But, with Trump giving scant detail on his plans – including on one on Thursday to bring millions of jobs back to the United States – those gains have come with the markets trading in a tight range.

The benchmark S&P 500 index has not registered a move of at least one percent in either direction since Dec. 7.

"Investors have embraced this oversimplified fundamental story of Trump's impact on the financial market and you're starting to see that narrative unravel a bit," said Aaron Clark, portfolio manager at GW&K Investment Management.
"The market will come to realize that a lot of these pro-growth policies might get pushed to the end of this year or next year and you might have this buyer's remorse for the market."

U.S. Treasury Secretary Steven Mnuchin said on Thursday that any policy steps would probably have only a limited impact this year. Investor will likely get more clarity on Trump's plan on Tuesday, when he addresses a joint session of Congress.
Dow e-minis 1YMc1 were down 73 points, or 0.35 percent, with 28,671 contracts changing hands at 8:31 a.m. ET (1331 GMT).
S&P 500 e-minis ESc1 were down 10.5 points, or 0.44 percent, with 189,563 contracts traded.
Nasdaq 100 e-minis NQc1 were down 29.25 points, or 0.55 percent, on volume of 30,953 contracts.

Shares of Hewlett Packard Enterprise (HPE.N) fell 8.35 percent to $22.60 in premarket trading after the company cut its full-year profit forecast.
J.C. Penney (JCP.N) fell 1.91 percent to $6.73 after the department store operator said it would close about 130-140 stores over the next few months.
Nordstrom (JWN.N) was up 2.39 percent at $44.99 after the company's quarterly profit beat expectations.

Data due on Friday includes a report from the U.S. Commerce Department that is likely to show new single-family home sales rebounded in January.
Separately, a report from the University of Michigan is seen showing that the final consumer sentiment index held at 96.0 in February, compared with a preliminary reading of 95.7. Both reports are expected at 10 a.m. ET (1500 GMT).
 
Barclays surprise capital boost triggers pension concerns

Barclays surprise capital boost triggers pension concerns

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A surprise boost to Barclays' (BARC.L) capital reserves failed to convince some analysts and investors on Thursday, with the British bank's shares falling nearly three percent as the market digested the figures, reversing earlier gains.

Concerns over the sustainability of the capital level centered on the accounting treatment of Barclays' UK pension scheme, which moved from a 1.1 billion pound deficit to a 27 million pound ($34 million) surplus in the last quarter of 2016.

Capital has been a concern for investors since the Bank of England said last November that Barclays had fallen short of one of its targets in a stress test scenario, but stopped short of requiring the bank to submit a new plan to boost reserves.

Barclays said its core capital ratio, a closely watched measure of financial strength, had reached 12.4 percent.

"It has taken off the table a question we got quite often last year: will you need to raise capital? ... That should lay that question to rest," Chief Executive Jes Staley said.

However, some analysts said the new-found capital strength could be at the mercy of talks taking place with the pension fund trustees over Barclays' pension contributions.

The fourth quarter swing from deficit to surplus could trigger an accounting charge that would hit the bank's capital ratio by 0.3 percent, Rob James, Senior UK Equities Analyst at Old Mutual Global Investors said.

But Tushar Morzaria, Barclays finance director, told investors on a call that it had taken the talks into account.

"This ... is completely factored into our capital projections, we have been very prudent in any assumption around the outcome," he said.

Barclays cut its dividend last year in a bid to bolster capital reserves while it sells unwanted assets, including most of its African business, to focus on the U.S. and Britain.

For 2016 it reported an adjusted pretax profit of 3.2 billion pounds ($4 billion), compared with 1.14 billion a year earlier. That was below the average forecast of 3.97 billion from analysts' estimates compiled by the bank.

The capital boost came from rising profits from trading amid volatile markets and the faster than expected disposal of unwanted assets in 2016 included its Asian private bank, its Southern European cards business and Italian retail business.

And Barclays said would close its so-called non-core division in June, six months ahead of schedule.

Meanwhile its investment banking division reported strong results from active fixed income trading. Credit trading was up 44 percent, in line with U.S. rivals that have seen similar boosts thanks to a backdrop of volatile markets.

CHALLENGES AHEAD

Barclays still faces challenges including litigation costs in the United States, rising provisions for late credit card repayments and completing the sale of its African division.

It is alone in contesting a U.S. Department of Justice suit on civil charges of fraud in the sale of mortgage-backed securities in the run-up to the 2008-09 financial crisis, whereas other major banks have settled.

The lender also posted a hefty 35 percent increase in credit provisions to 2.2 billion pounds as more customers, particularly in the United States, fell behind on payments.

And while it has reached an agreement with its African division on the terms of their separation that will see it pay Barclays Africa 12.8 billion rand ($993 million) to fund investments required to separate the two businesses, terms are pending regulatory approval and it has yet to find buyers.

Barclays said in March last year it would sell the stake in two to three years but has so far sold only one block of shares worth 12 percent of Barclays Africa Group in a deal last May, meaning it still owns 50 percent.

Attempts to dispose of the stake in one go have faltered, with interest from a consortium led by former Barclays CEO Bob Diamond and from Africa's biggest pension fund, Public Investment Corporation, not leading to a deal.

($1 = 12.8922 rand)

($1 = 0.7976 pounds)

(Editing by David Clarke and Alexander Smith)
 
NZDUSD continues its struggle to break through the 0.73 handle

The Pair is still struggling to hold on to its price above the 0.7300 mark. It is did go past this level by a high margin and refreshed 4 months tops. The Pair later witnessed a sharp reversal during the NY trading session.

The US dollar was weakened on Thursday and this gave the pair some positive traction but was capped by mixed Chinese Macro data. Traders are now looking to see if the pair is able to continue its hold on the 0.7300 handle or if the bulls are able to regain control. Some economic data due to be released will give investors some fresh impetus.

The US economic docket along with Philly Fed manufacturing index and the usual weekly initial jobless claim will be available today. We’ll see how it moves the NZDUSD.
 
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