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U.S. Producer Prices Drop, Unemployment Claims Rise

U.S. producer prices dropped for the first time in almost 1-½ years in December amid falling costs for services, which could weigh on expectations that inflation will pick up this year.

Separate data showed that initial claims for jobless benefits rose for the fourth consecutive week to over a three-month peak. Winter and snow in parts of the United States likely kept some workers at home, which accounts for the previous week's rise in unemployment claims.

The U.S. Federal Reserve is projecting three rate hikes for 2018. It raised rates three times in 2017.

According to the Labor Department, its producer price index for final demand dropped 0.1 percent in December. It was the first decline in the PPI since August 2016 and followed two consecutive monthly growth of 0.4 percent.

The PPI increased 2.6 percent from the same period in 2016, after accelerating 3.1 percent in November.

A key gauge of underlying producer price pressures, excluding food, energy and trade services, climbed 0.1 percent in December. The so-called core PPI rose 0.4 percent in November. It increased 2.3 percent in the 12 months through December after rising 2.4 percent in November.

In the separate report, the Labor Department said initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 261,000 for the week ended Jan. 6, the highest level since late September.

Claims have risen since mid-December, though the data tend to be volatile during year-end holidays.

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New Zealand Food Prices Fall For Fourth Month

New Zealand's food prices declined for the fourth straight month in December, figures from Statistics New Zealand showed Monday.

Food prices dropped 0.8 percent month-over-month in December, faster than the 0.4 percent fall in November.

Grocery food and seasonally cheaper fruit and vegetables were the main factors in the dip in food costs.

After four successive monthly rises, butter prices dropped 4.9 percent.

On a yearly basis, food prices grew at a stable rate of 2.3 percent in December.

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New Zealand Food Prices Fall For Fourth Month

New Zealand's food prices declined for the fourth straight month in December, figures from Statistics New Zealand showed Monday.

Food prices dropped 0.8 percent month-over-month in December, faster than the 0.4 percent fall in November.

Grocery food and seasonally cheaper fruit and vegetables were the main factors in the dip in food costs.

After four successive monthly rises, butter prices dropped 4.9 percent.

On a yearly basis, food prices grew at a stable rate of 2.3 percent in December.

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BRAZIL: Ibovespa Rises To New Record On Expiring Stock Options

Ibovespa, the benchmark stock index in Brazil, rose 0.51% to 79,752.37 points Monday - a new record settlement - influenced by expiring stock options and data suggesting that the economic recovery in the country gained strength in November. The United States market holiday limited the local trading volume.

Analysts said that the Ibovespa might be pricing a conviction of the former Brazilian President Luiz In?cio Lula da Silva in a trial scheduled for January 24. A court defeat could bar Lula from running for President in October.

"The holiday in the United States removes liquidity from the stock market, but investors are expecting January 24 much more than anything else, and apparently the stakes continue to be at Lula's conviction," said the chief economist of Home Broker Modalmais, Alvaro Bandeira. In the short term, analysts expect Ibovespa to follow a bullish trend. The index remained at record levels even after Brazil's rating downgrade by S&P last week.

For Bandeira, the inflow of foreign investment has offset bad news and helped to sustain Ibovespa's good momentum. However, Rico Investimentos analyst Roberto Indech noted that this week brings some data in Brazil and abroad that may weigh on the stocks.

Meanwhile, the locally traded U.S. dollar turned positive in the final stretch of the trading day. The greenback's performance was influenced by the holiday of Martin Luther King in the United States, which reflected in lower trading volume. As a result, the locally traded currency closed slightly higher (+0.09%), at R$ 3,210.

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Global Automakers Urge Trump Administration Not to Terminate NAFTA

Major automakers urged the Trump administration not to terminate the North American Free Trade Agreement and hopes that the United States, Canada and Mexico will be able to conclude a modernized and improved trade pact.

Trump has threatened to withdraw from NAFTA, which is heavily utilized by automakers that have production and supply chains spread across the three countries.

Fiat Chrysler Automobiles Chief Executive Sergio Marchionne said he hoped the Trump administration would “retune” some of its trade talk demands.

Marchionne said FCA's truck production shift in part “goes a long way I think in addressing some of President Trump's concerns about the dislocation of production capacity out of the United States.”

That decision reduces the risk those trucks would be hit with a 25 percent tariff if NAFTA unravels.

Ford Motor Co CEO Jim Hackett said NAFTA needs “to be modernized,” adding that of Detroit's Big Three automakers, Ford has the highest percentage of U.S.-built vehicles.

General Motors CEO Mary Barra expressed optimism NAFTA will survive with improvements. Other senior GM executives stood by the company's plans to continue building trucks in Mexico.

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Singapore NODX Rises Less Than Expected In December

Singapore's non-oil domestic exports increased at a slower-than-expected pace in December, data from the International Enterprise Singapore showed Wednesday.

NODX climbed 3.1 percent year-over-year in December, well below the 9.1 percent spike in November. Economists had expected a 8.6 percent rise for the month.

Exports of electronic products declined 5.3 percent annually in December, reversing a 5.1 percent growth in November.

At the same time, non-electronic NODX rose 6.8 percent after expanding 10.6 percent in the prior month.

On a monthly basis, NODX decreased a seasonally adjusted 5.0 percent in December, following a 8.6 percent gain in

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Australia Jobless Rate Climbs To 5.5% In December

The unemployment rate in Australia came in at a seasonally adjusted 5.5 percent in December, the Australian Bureau of Statistics said on Thursday.

That was above forecasts for 5.4 percent, which would have been unchanged from November.

The Australian economy added 34,700 jobs last month to 12,440,800, beating forecasts for an increase of 15,100 following the upwardly revised 63,600 gain in the previous month (originally 61,600).

Full-time employment increased 15,100 to 8,518,900 and part-time employment increased 19,500 to 3,921,800.

Unemployment increased 20,500 to 730,600. The number of unemployed persons looking for full-time work increased 9,900 to 501,800 and the number of unemployed persons only looking for part-time work increased 10,600 to 228,800.

The participation rate climbed to 65.7 percent, exceeding forecasts for 65.5 percent - which would have been unchanged.

Monthly hours worked in all jobs decreased 4.2 million hours (0.2 percent) to 1,736.4 million hours.

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Oil Prices Rally on Disruption Threats in Nigeria, declining U.S. Inventories

Oil prices edged up on a reported decline in U.S. crude stockpiles and as militant groups in Nigeria threatened to launch an assault on the nation's petroleum infrastructure.

But prices continued to be below the three-year highs as fuel stockpiles continue to be ample and as refineries reduce operations.

Brent crude futures stood at $69.56 per barrel, 18 cents or 0.3 percent higher from their last settlement. On Monday, the international benchmark hit their highest level since December-2015 high of $70.37 per barrel.

U.S. WTI crude futures traded at $64.25 per barrel, 28 cents or 0.4 percent higher from their last close. WTI hit their highest level since December, 2014 at $64.89 per barrel.

According to traders, prices have been lifted by reports that Nigeria's rebel group Niger Delta Avengers threaten to attack the nation's oil sector in the next few days.

Markets also received support from a decline in crude inventories. U.s. crude inventories declined by 5.1 million barrels in the latest week to 411.5 million, according to API.

Despite the overall upbeat sentiment in the markets, analysts warned that the recent rally, which has raised crude by around 14 percent since early December, may be on the verge of a correction.

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U.S. Inflation Expectations Jumps to Highest Level Since 2014

A significant market measure of inflation expectations has increased to its strongest level since 2014, as investors' deliver solid demand to purchase protection against the threat of rising interest rates and dropping bond prices.

The 10-year break-even rate, a market measure of inflation expectations derived from Treasury Inflation Protected Securities, has increased to 2.09 percent, it's highest level since September 2014 when oil prices were collapsing. The impact of oil prices on break-evens is strong, with analysts attributing at least part of the recent rise in inflation expectations to rising oil prices.

At a $13 billion auction of TIPS on Thursday, primary dealers — responsible for bidding on a pro rata share of the auction to ensure the sale of the debt — walked away with a smaller than average share of the securities, as other investors came in aggressively to buy.

The 10-year Treasury yield has increased 20 basis points so far this year to 2.6 percent on Thursday, closing in on its 2017 high of 2.63 percent.

The strong demand for TIPS showed a growing belief that price pressure is building from improving global demand and pushing domestic inflation to the Federal Reserve's 2 percent target.

Improving business activity around the world has supported oil and other commodity prices, reinforcing the view of rising inflation, analysts said.

The ratio of bids to the amount of 10-year TIPS offered was 2.69, which was the highest reading since May 2014.

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Gold Stable amid U.S. Government Shutdown Worries

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Gold prices were on a steady footing on Monday amid a weaker dollar as the U.S. government shutdown due to a spending-bill impasse affected investor sentiment.

Spot fold was almost trading flat at $1, 331.57 per ounce. U.S. gold futures were up 0.1 percent at $1, 331.30. Holdings of SPDR Gold Trump increased 0.70 percent to 846.67 tonnes.

Meanwhile, the dollar index, which gauges to greenback versus a basket of currencies declined by as much as 0.5 percent to 90.155.

Funds for federal government agencies have run dry at midnight on Friday and was not replenished immediately amid a dispute between U.S. President Donald Trump and Democrats over the issue of immigration. Leaders of the Republican and Democratic senators held talks on Sunday as they look to break a deadlock that has kept the U.S. government shut down for two days. However, it was vague if an agreement could be reached to reopen federal agencies by the beginning of the workweek.

Another factor contributing to the bullishness of the gold was data from the U.S. Commodity Futures Trading Commission, which showed that hedged funds and money managers had increased their net long position in COMEX gold contracts in the week ending January 16.

Spot silver traded up 0.1 percent to$17.01. Platinum declined 0.1 percent to $1,011.65 after hitting its highest since September 8 at $1, 015.20 on Friday.

COLOMBIA: Colcap Trades 0.29% Higher Boosted By Ecopetrol

Colcap, the main index of the Colombian Stock Exchange, rose 0.29% near the end of Monday's trade, moving at 1,555.54 points, boosted by a rally in Ecopetrol's shares, amid higher oil prices, said Marcela Ram?rez, an analyst at Acciones & Valores.

The shares of Ecopetrol (+5.07%), ETB (+1.97%), and Davivienda (+0.98%) rose, while Preferencial Bancolombia (-1.35%) and Cemargos (-1.03%) fell.

The locally traded. U.S. dollar closed at 2,852.45 Colombian pesos, marking a 0.11% rise.

Wilson Tovar, an analyst at Acciones & Valores, noted that the greenback lost ground at the beginning of the week after investors evaluated the impact of the partial closure of the United States government.

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Japan December Trade Surplus Y358.971 Billion

Japan posted a merchandise trade surplus of 358.971 billion yen in December, the Ministry of Finance said on Wednesday - down 43.5 percent on year.

The headline figure was shy of expectations for a surplus 520.0 billion yen following the 113.4 billion yen surplus in November.

Exports climbed 9.3 percent on year to 7.302 trillion yen, also missing forecasts for a gain or 9.8 percent and down from 16.2 percent in the previous month.

Exports to Asia advanced 9.9 percent on year to 4.111 trillion yen, while exports to China alone jumped an annual 15.8 percent to 1.507 trillion yen.

Exports to the United States gained 3.0 percent on year to 1.411 trillion yen and exports to the European Union jumped an annual 11.4 percent to 792.213 billion yen.

Imports advanced an annual 14.9 percent to 6.943 trillion yen versus expectations for a gain of 12.4 percent and down from 17.2 percent a month earlier.

Imports from Asia climbed 15.7 percent on year to 3.379 trillion yen, while imports from China alone gained an annual 14.8 percent to 1.704 trillion yen.

Imports from the United States were up 7.5 percent to 699.419 billion yen, while imports from the European Union gained 9.8 percent to 786.388 billion yen.

Also on Wednesday, the latest survey from Nikkei said that the manufacturing sector in Japan continued to expand in January, and at an accelerated rate, with a manufacturing PMI score of 54.4.

That's up from 54.0 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, output expanded at the quickest rate in 47 months, while new orders continued to rise sharply.

Inflationary pressures intensified.

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Nasdaq, S&P End at Record Peaks; Dow Weighed Down by J&J, Procter

U.S. stocks rose on Tuesday, as solid results from Netflix helped boost the S&P and Nasdaq Composite. However, losses in Johnson & Johnson and Procter & Gamble added pressure on the Dow Industrials.

The Nasdaq composite ended at a record peak, rising 0.7 percent to 7,460.29. The S&P 500 also closed at an all-time peak, gaining 0.2 percent at 2,839.13, as the corporate earnings season continued. The Dow Jones industrial average notched an intraday record, before closing 3.79 points lower at 26,210.81.

Video streaming giant Netflix after the close announced that total net adds reached 8.33 million, well above a StreetAccount estimate of 6.39 million. Netflix's stock jumped ten percent, lifting the company's market cap above $100 billion for the first time.

Dow components Johnson & Johnson, Procter & Gamble and Travelers Cos. all posted better-than-expected earnings and revenue on Tuesday. Verizon, another Dow component, posted a profit that fell short of expectations, while sales exceeded analyst estimates.

Other stocks, known as part of the “FAANG” - Facebook, Apple, Amazon and Google parent Alphabet - also moved higher.

Insurer Travelers provided the biggest boost to the Dow, climbing 5.32 percent after the company's profit topped estimates.

Equities are off to a strong start for the year, with the three major indexes rising at least 6 percent in January. Stocks are building on the strong gains made in 2017.

Whirlpool jumped 3.2 percent after Trump approved a 20 percent tariff on the first 1.2 million imported large residential washing machines in the first year and a 50 percent tariff on machines above that number.

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BRAZIL: Ibovespa Spikes 3.7% And Sets New Record Following Lula Conviction

Ibovespa, the benchmark stock market index in Brazil, rose 3.72% to 83,680 points Wednesday, a new settlement record amid a R$ 15.69 billion trading volume - nearly twice the average.

The rally was the result of a higher court unanimously upholding former president Lula's conviction for corruption and money laundering, which may reduce the chances of the center-left leader competing in this year's election.

"The markets have reacted positively to Lula's trial. The conviction lessens the likelihood of him becoming a presidential candidate, and this reinforces the expectation that a more centrist candidate be elected," said Guide Investimentos analyst Ign?cio Crespo.

According to chief economist of Gradual Investimentos, Andr? Perfeito, "we will still have many developments in Lula's campaign to become a presidential candidate. Today's episode may have been dramatic, but it is far from definitive."

In the conviction, the three judges increased the former president's prison sentence for 12 years and a month and indicated that he could be arrested after all the resources have been exhausted in TRF4. According to H. Commcor's chief operating officer, Ari Santos, the result was "predictable," but encouraged the markets.

The locally traded U.S. dollar reached minimum levels in the year against the Brazilian after Lula's conviction in the second instance. The greenback fell 2.43%, closing at R$ 3.1600, after reaching the intraday low of R$ 3.1530 (-2.73%).

For Friday, Santos projects that the index may fall into a profit-taking movement. For Crespo, however, the index may remain positive.

"The scenario remains optimistic for Brazil in the short and medium term," says the analyst.

The Ibovespa will remain closed Thursday for a local holiday.

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UK Employment Notched Record Peaks

Employment in Britain increased in the three months to the end of November, surpassing analysts expectations as pressure on employers to find skilled staff seems to have pushed up wages.

The number of people in work grew by 102,000 compared with the previous three months, bringing the number of people employed to 32.21 million, a fresh record peak. Analysts had forecasted a decline of 13,000.

The jobless rate was 4.3 percent over the three month period.

The employment rate, which measures the proportion of 16- to 64-year-olds in work, reached 75.3 percent, a figure that was higher than for a year earlier and the joint highest since comparable records began in 1971.

The UK labour market has created large numbers of jobs since the financial crisis but has struggled to generate real wage growth. Many of the jobs created have also been part time or self-employed.

However, the latest figures show an increase in the number of full time jobs, with the number of self-employed falling by 82,000.

Average weekly earnings were 2.5 percent higher than the previous year, including bonuses, and 2.4 percent higher excluding bonuses. That compares with 2.5 percent and 2.3 percent respectively during the previous three month period.

The Office for National Statistics, which produces the figures, calculates that this means real earnings dropped by 0.2 percent over the past year, including bonuses, and by 0.5 percent without them.

According to the ONS, the number of job vacancies increased to a record peak of 810,000 in the three months to the end of October.

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Singapore Producer Prices Fall In December

Singapore's producer prices declined for the first time in one year in December, figures from the Department of Statistics showed Monday.

The manufactured product price index dropped 0.6 percent year-over-year in December, reversing a 2.9 percent rise in November.

Producer prices climbed 3.8 percent in the whole year 2017, in contrast to a 5.5 percent decrease in 2016.

The domestic supply price index rose 0.6 percent annually in December, while it edged down 0.2 percent from a month ago.

On a monthly basis, producer prices increased 0.8 percent in December, extending the 1.1 percent rise in November.

Data also revealed that import prices slid 0.5 percent yearly in December, following a 4.1 percent climb in the preceding month.

Export prices declined 2.4 percent in December over the prior year, after a 0.8 percent rise in November.

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Singapore Producer Prices Fall In December

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Singapore's producer prices declined for the first time in one year in December, figures from the Department of Statistics showed Monday.

The manufactured product price index dropped 0.6 percent year-over-year in December, reversing a 2.9 percent rise in November.

Producer prices climbed 3.8 percent in the whole year 2017, in contrast to a 5.5 percent decrease in 2016.

The domestic supply price index rose 0.6 percent annually in December, while it edged down 0.2 percent from a month ago.

On a monthly basis, producer prices increased 0.8 percent in December, extending the 1.1 percent rise in November.

Data also revealed that import prices slid 0.5 percent yearly in December, following a 4.1 percent climb in the preceding month.

Export prices declined 2.4 percent in December over the prior year, after a 0.8 percent rise in November.

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Japan Labor Demand Grew in December

Labor demand in Japan increased in December to its highest in over 40 years, which could provide labor unions extra leverage in impending spring wage negotiations.

The jobs data implies that employers may be more likely to heed the government's call to increase wages by three percent or more at annual negotiations with unions this spring, boosting the chance that consumer spending and inflation will accelerate.

The jobs-to-applicants ratio climbed to 1.59 from 1.56 in November, which is the highest since January 1974.

The seasonally adjusted jobless rate rose to 2.8 percent from 2.7 percent in November, according to the Internal Affairs ministry. Economists' median forecast was for the jobless rate to remain at 2.7 percent, the lowest since November 1993.

Retail sales grew in December by the most in nearly three years on higher spending on cars and clothes, separate data showed, which could ease concerns about a sudden drop in household spending in the same month.

Sales were 3.6 percent higher in December from the previous year, compared with a median market forecast for a 1.8 percent rise. That also recorded the biggest increase since a 4.9 percent annual increase in April 2015.

Japanese household spending, which is different from retail sales because it is based on surveys sent to a small sample of consumers, dropped 0.1 percent in December from a year earlier in price-adjusted real terms.

Japan marked seven consecutive quarters of economic growth to end-September, its longest uninterrupted stretch of expansion since 1994.

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COLOMBIA: Colcap Trades 1.34% Lower Due To Ecopetrol's Underperformance

Colcap, the main index of the Colombian Stock Exchange, fell 1.34% to 1,576.89 points near to the closing of Tuesday's session, due to the fall in Ecopetrol's shares.

Erika Baquero, an analyst at Alianza Valores, noted that the state-owned oil company was influenced by the decline in oil prices abroad.

The shares of Canacol (+0.20%) are rising, while Ecopetrol (-3.06%), Promigas (-3.04%), Sura (-1.73%), and Avianca (-1.37%) trade lower.

The locally traded U.S. dollar closed at 2,851.15 Colombian pesos, marking a 0.47% rise due to the drop in oil prices abroad.

Ramses Pestanapalmett, an analyst at Ultraserfinco, noted that the commodity falls due to the increase in exploratory activities in the United States and Canada, which values the U.S. currency against emerging currencies such as the Colombian peso.

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China Manufacturing PMI Holds Steady In January - Caixin

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The manufacturing sector in China continued to expand in January, and at a steady pace, the latest survey from Caixin showed on Thursday with a Manufacturing PMI score of 51.5.

That was in line with expectations and unchanged from the December reading.

It also remained above the boom-or-bust line of 50 that separates expansion from contraction.

Individually, growth was supported by further, albeit slightly softer, increases in total new work and new export sales.

Higher production requirements led firms to increase their buying activity, while employment fell at the weakest pace in nearly three years.

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UK Consumer Morale Improves in January

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UK consumers began 2018 in a less downbeat mood as Brits reported improved confidence in their financial situation for the coming year, according to a survey.

Research house GfK's consumer confidence index increased by 4 points to -9 in January.

The score reflects an improvement in consumers' views on their personal financial situation over the past 12 months as well as improved expectations for the year ahead. Consumer views of the U.K.'s economic situation in the past year and in the coming 12 months also improved.

All five measures used to calculate the index increased in January as the demand for major purchases, like furniture or washing machines, saw the biggest rise, climbing by five points to one. The index tracking the personal financial situation over the next 12 months increased to six from two in December while the outlook for the general economy edged higher to -24 from -28 in the previous month.

However, Joe Staton, head of market dynamics at GfK, cautioned that the headline measure of consumer confidence remained in negative territory and was lower than at the same time in 2016, when it stood at -5.

"In the absence of good news about rising wages and declining inflationary pressures, this off-trend number could be a temporary blip rather than a strong sign of recovery," Staton said.

Inflation stood at three percent in December, close to the quickest in nearly six years. Wage growth has failed to keep pace with the acceleration, fueled by the pound's drop in 2016. It may ease this year, and sterling's recent appreciation could help.

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Australia Producer Prices Climb 0.6% In Q4

Final demand producer prices in Australia were up 0.6 percent on quarter in the fourth quarter of 2017, the Australian Bureau of Statistics said on Friday - following the 0.2 percent gain in the three months prior.

The increase was mainly due to rises in the prices received for petroleum refining and petroleum fuel manufacturing (+11.9 percent), heavy and civil engineering construction (+0.7 percent) and building construction (+0.4 percent).

They were partly offset by falls in the prices received for sugar and confectionery manufacturing (-3.9 percent), tobacco product manufacturing (-3.8 percent) and sheep, beef cattle and grain farming; and dairy cattle farming (-3.6 percent).

On a yearly basis, producer prices jumped 1.7 percent - up from 1.6 percent in Q3.

Intermediate demand producer prices were up 1.2 percent on quarter and 3.1 percent on year, while preliminary demand producer prices advanced 1.3 percent on quarter and 3.0 percent on year.

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Gold Eases on Stronger Dollar after Upbeat Jobs Data

Gold prices edged down early on Monday on a stronger dollar following a positive U.S. jobs data published late last week, but a decline in stocks cushioned the fall.

Spot gold has fallen 0.1 percent to $1,331.80 per ounce. Spot gold on Friday declined by 1.2 percent, marking its biggest one-day decline since December 7. In the previous week, the precious metal experienced its biggest weekly fall since the week ending December 8.

U.S. gold futures traded down 0.1 percent at $1,336 per ounce.

In January, non-farm payrolls increased by 200, 00 jobs, according to the Labor Department, surpassing the expected 180, 000 increase and their biggest annual gain in over eight and a half years.

Average hourly earnings increased and bolstered the annual gain to 2.9 percent, the biggest since June 2009.

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China Private Sector Growth At 7-Year High

China's private sector activity expanded at the quickest pace in seven years in January, survey data from IHS Markit showed Monday.

The Caixin composite output index, which covers both manufacturing and services, climbed to 53.7 in January from 53.0 in December.

Any reading above 50 indicates expansion in the sector.

Service sector activity grew at the fastest pace since May 2012. The seasonally adjusted General Services Business Activity Index rose to 54.7 in January from 53.9 in the preceding month.

At the same time, manufacturers signaled the quickest upturn in production levels since December 2016.

Composite employment rose slightly, after broadly stagnating between August and December last year.

"Caixin PMI readings in January showed that the Chinese economy had a good start to 2018," Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said.

"Looking forward, we should watch for stability of demand in the manufacturing industry and the impact of growing costs on the profitability of service providers."

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Gold Prices Stable as Global Equity Markets Hit by Selloff

Gold prices were on steady footing on Tuesday, lifted by a slump in global stock markets but pressured by bets for additional rate hikes by the U.S. Federal Reserve this year.

Spot gold was mostly unchanged at $1,338.62 an ounce, after ending up 0.5 percent on Monday. The precious metal on Friday edged up 0.5 percent on Monday.

Gold fell 1.2 percent on Friday in its biggest one-day drop since December 7. In the previous week, the metal saw its biggest weekly decline since the week ending December 8. U.S. gold futures edged up 0.4 percent at $1,342 per ounce.

Last week, the U.S. Federal REserve stood pat on interest rates, but lifted its inflation outlook and signaled more gradual interest rate increases.

Stock markets retreated around the world as a rebound in U.S. inflation raised the possibility that the FEd would tighten monetary policy at a more aggressive pace than priorly expected.

However, U.S. bond yields surged on Monday as traders eased expectations the Fed would accelerate its clip of interest rate increases in the aftermath of a dramatic sell-off in the U.S. stock market, with the Dow losing more than 1, 000 points.

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U.S. Yields Pare Losses as Stocks Recover from Selloff

Treasury yields reversed some of their losses but still closed lower after stocks rallied from the prior day's rout that drove investors toward safe havens and pushed bond prices up.

The yield on the 10-year Treasury notes edged down 2.8 basis points to 2.766 percent, after having declined to as low as 2.648 percent. The benchmark yield had climbed to a four-year peak of 2.883 percent on Monday. Two-year note yield was mostly unchanged at 2.091 percent, while the 30-year rate was down 2.3 basis points to 3.043 percent.

Yields on the 10-year German bund shed 4.6 basis points to 0.691 percent, according to Factset data.

Appetite for safe-haven bonds eased after stocks jumped a day after a historic selloff in the U.S. equities markets when the Dow Jones Industrial Average observed its biggest one-day decline in history. Investors tend to shift towards bonds and other safe-haven assets whenever there is chaos in riskier assets, such as stocks.

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China Consumer Prices Rise 1.5% On Year In January

Consumer prices in China were up 1.5 percent on year in January, the National Bureau of Statistics said on Friday.

That was in line with expectations and down from 1.8 percent in December.

On a monthly basis, consumer prices advanced 0.6 percent - up from 0.3 percent in the previous month.

The bureau also said that producer prices were up 4.3 percent on year - exceeding expectations for 4.2 percent but down from 4.9 percent a month earlier.


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U.S. Yields Rally as Investors Eye Inflation Report

U.S. government bond prices continued their decline, driving yields up, as investors looked forward to the coming inflation report that could reaffirm the bearish sentiment on Treasury bonds.

The 10-year Treasury note yield advanced 2.7 basis points to 2.857 percent, but retreated from a four-year peak of 2.891 percent hit earlier in the day.

The 30-year bond rate was almost unchanged at 3.138 percent but reached its highest level since March 2017, according to WSJ Market Data Group. Meanwhile, the two-year note yield recorded a gain of 1.7 basis points to 2.077 percent.

Bond markets experienced selling pressure as a mixture of inflation worries, increasing budget deficits and the Federal Reserve's move to unwind its balance sheet have affected the demand for U.S. government bonds. Treasury issuance is expected to increase at the same time the U.S. government can no longer depend on a price-insensitive Fed to absorb the coming supply.

Higher rates were said to be the cause of a deep correction that sent stocks plunging. The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index traded down over 5 percent in the previous week. Stocks look less attractive on several valuation indicators if the benchmark 10-year yield rises to high.

However, stocks rallied on Monday to record back-to-back increases, with the Dow rising over 400 points.

Investors are now expected to focus on the consumer-price index report on Wednesday, a possible turning point as investors faulted the strong reading on the wage index of the January jobs report as the main reason for the market turmoil.

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Australia Jobless Rate Eases To 5.5% In January

The unemployment rate in Australia came in at a seasonally adjusted 5.5 percent in January, the Australian Bureau of Statistics said on Thursday.

That was in line with expectations following the upwardly revised 5.6 percent reading in December (originally 5.5 percent).

The Australian economy added 16,000 jobs last month - beating forecasts for 15,000 following the downwardly revised 33,500 increase in the previous month (originally 34,700).

The participation rate came in at 65.6 percent - matching expectations and down from 65.7 percent a month earlier.

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Japan Export Growth Accelerates in January

Japanese exports increased for the fourth straight month in January as shipments to Asian and western Europe grew.

Exports climbed 12.2 percent year on year in January, figures according to the Ministry of Finance. Exports increased 9.3 percent in December.

Outbound shipments to Asia were up 16 percent while those to western Europe rose 20.8 percent. Imports also increased in January, climbing 7.9 percent year on year, short of the 8.3 increase percent forecast by economists.

U.S.-bound shipments were 1.2 percent higher in the year to January, led by steel, batteries and medicines, while car shipments declined 3.9 percent. The small rise in U.S.-bound exports followed a 3.0 percent gain in the previous month.

Those numbers resulted in a trade deficit of ¥943.4 billion ($8.9 billion). Economists expect exports will continue to expand in the coming months, led by demand for the semiconductor-related products that lifted exports in 2017.

Analysts are also wary about a rising yen as well as the U.S. stance towards protectionism ahead of the mid-term elections later this year, and potential effects on Japan's exports of cars and other products.

A strong yen erodes profits at Japanese manufacturers and could hurt the otherwise buoyant economy, which posted an eighth consecutive quarter of growth in October-December.

The yen was flat against the dollar at ¥106.31 following the publication of the trade figures.

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New Zealand Services Growth Robust In January

New Zealand's service sector activity continued to expand strongly in January, survey figures from Business NZ showed Monday.

The performance of services index, or PSI, dropped to 55.8 in January from 56.0 in December. However, any reading above 50 indicates expansion in the sector.

The sub-index for new orders fell below the 60.0 point mark for the first time since April last year. It declined to 57.6 from 60.1.

"While the PSI is relatively robust, combined with the Performance of Manufacturing Index it nonetheless signals something of a slowing in GDP growth for the near term," Craig Ebert, senior economist at Business NZ, said.


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Walmart Shares Tumble on Weaker Holiday Online Sales

Walmart shares tumbled after posting weak online sales for the Christmas period and issuing a disappointing annual profit forecast.

In the three months to December, online sales were 23 percent higher. However, the increase was less than half the growth seen in the prior quarter and down from the same period in 2016.

Shares in the world's biggest retailer declined more than 10 percent to $94.11. This year through Friday's close, the stock has risen by 6.1 percent.

The retailer reported its online revenue clocked in at $11.5 billion in 2017, but it suffered losses on the said sales. CEO Doug MCMillon said e-commerce losses would be “about the same” for the current fiscal year. He said that the firm was making progress in its efforts to be at the same level with Amazon and other competitors.

Under its transformation strategy, Walmart will spend more on Walmart.com and reduce spending on marketing for its Jet.com website, which targets younger and more affluent shoppers.

Despite higher-than expected sales growth at Walmart's U.S. stores, which came in at 2.6 percent, net profit declined 42 percent to $2.2 billion.

Walmart expects earnings of $4.75 to $5 per share this financial year, excluding some items, against the estimate of $5.13 by Wall Street.

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Japan All Industry Activity Grows At Slower Pace

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Japan's all industry activity growth halved in December, the Ministry of Economy, Trade and Industry reported Wednesday.

The all industry activity index rose 0.5 percent month-on-month in December, following November's 1 percent increase. Nonetheless, this was the third consecutive increase in activity and bigger than the expected 0.4 percent rise.

Industrial production advanced 2.9 percent, while construction activity shrank 0.4 percent and tertiary industry activity contracted 0.2 percent in December.

On a yearly basis, all industry activity growth slowed to 1.8 percent in December from 2 percent a month ago.

In the fourth quarter, all industry activity rebounded 0.7 percent after declining 0.3 percent in the third quarter.

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Eurozone Business Growth Remains Firm in February

Eurozone business growth remained strong in February, with companies at their most optimistic in over five years, a private-sector survey showed.

The eurozone was one of the best-performing major economies in 2017, and its businesses started 2018 by ramping up activity at the quickest rate in well over a decade.

However, February's preliminary Purchasing Managers' Index (PMI) indicated that the pace of growth set in January, the fastest in well over a decade, has lost a little momentum.

IHS Markit's composite flash PMI for the euro zone, seen as a good guide to economic health, dropped to 57.5 in February.

Nevertheless, this month's reading was still one of the most growth - or farthest above 50 - in more than 11 years. According to IHS Markit, the eurozone was on track for its best quarterly growth since the second quarter of 2016, with the PMI pointing to first-quarter growth of 0.9 percent.

Companies shared that optimism - an index measuring expected output in a year's time climbed to 68.3 from 68.0, its highest since IHS Markit started collecting the data in July 2012.

Consumer confidence in the bloc dropped more than expected this month, but that was from a 17-year high set in January, official data recently showed.

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Germany Business Confidence Drops in February

Sentiment among German businesses dropped in February, according to a closely watched survey that comes on the heels of other polls indicating enthusiasm is easing after hitting multi-year peaks.

The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 companies, declined to a 5-month low of 115.4 from 117.6 in January. The drop in the German headline figure was mainly caused by managers scaling back their business expectations for the next six months, with the respective sub-index dropping to a 10-month low.

A sector breakdown of the Ifo figures revealed that the main impediment came from manufacturing, where the mood among managers had reached a record peak in January. Business sentiment also deteriorated in wholesaling, construction and retailing.

The Ifo data come a day after a survey of German purchasing managers also pointed to a decline in output growth expectations.

Ifo chief Clemens Fuest said firms were less satisfied with their current business situation, but the indicator remains at its second-highest level since 1991.

This upbeat growth outlook was also mirrored in the finance ministry's monthly report that was recently released which said recent data was pointing to a continuation of the economic upswing at the beginning of the year.

Germany is coming off of a year of strong economic expansion. Economists broadly expect the country to continue performing well in 2018, but some have questioned whether the rapid pace can hold.

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UK Services Sector Logs Strong Growth: CBI

UK services sector registered strong growth in business volumes in three months to February, the latest Services Sector survey from the Confederation of British Industry showed Monday.

Both business and professional services and consumer services logged a rise in profits for the first time since November 2015.

Business and professional services said their business volumes grew at the fastest pace since August 2015, and growth is set to accelerate further in the three months to May.

In the consumer services sector, volumes grew at the fastest pace in a year. Consumer services growth is expected to ease next quarter, but nonetheless remain firm. Rain Newton-Smith, CBI chief economist, said "It's great to see the services sector start the year off on a firm footing."

"Despite feeling the pinch from high inflation, business volumes have bloomed, profits have grown for the first time in over two years and hiring is on the up."

Prices continued to rise in consumer services but were flat in business and professional services. Next quarter, price growth is expected to accelerate in both sub-sectors, survey showed.

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Qualcomm to Consider Broadcom Takeover Bid on Higher Price Tag

Qualcomm had a change of heart regarding an acquisition offer by its rival Broadcom, stating it is open to considering the bid if it is raised to $160 billion including $25 billion in assumed debt, according to sources cited by Financial Times.

The change in the company's stance marks a big change for Qualcomm executives, who have been opposing the deal on antitrust grounds. Sources close to Qualcomm said that Broadcom has recently made sufficient progress in tackling the competition issues in order to make way for talks to reach a phase where the two parties can reach an agreed price.

Qualcomm is seeking that Broadcom sweetens its offer by at least 15 percent to above $90 per share, up from its present $79 per share offer, to achieve what would be the biggest tech deal ever brokered, according to people knowledgeable of the proceedings. The total $160 billion price tag would include Broadcom taking on $25 billion in Qualcomm debt.

Several sources close to Qualcomm's senior management said the firm is now open to sealing the deal, but the takeover depends on Hock Tan, Broadcom's CEO, who can decide whether to change course and increase his offer price.

Qualcomm has sent a letter to Tan, expressing the team's interest in pursuing a non-disclosure deal that would enable the two parties to begin due diligence. Qualcomm chairman Paul Jacobs also called for the two chipmakers to set a meeting to negotiate a price as soon as possible. The proposals were dismissed by Broadcom, but said that it was ready to discuss terms that were 'realistic' for both companies.

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Japan Industrial Output Falls 6.6% In January

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Industrial production in Japan contracted a seasonally adjusted 6.6 percent on month in January, the Ministry of Economy, Trade and Industry said in Wednesday's preliminary reading.

That missed forecasts for a decline of 4.0 percent following the 2.9 percent gain in December.

On a yearly basis, industrial production added 2.7 percent - again missing forecasts for 5.3 percent and down from 4.4 percent in the previous month.

Upon the release of the data, the METI maintained its assessment of industrial production saying that it is picking up slowly.

Industries that weakened in January included transport equipment, business-oriented machinery and electronic parts and devices.

Shipments were down 5.6 percent on month and up 4201percent on year.

Industries that were down included transport equipment, business oriented machinery and electronic parts - while communications electronics equipment was up.

Inventories shed 0.6 percent on month and climbed 1.4 percent on year. Industries in contraction included business oriented machinery, transport equipment and iron and steel.

Industries that were up included ceramics, non-ferrous metals and chemicals.

According to the survey of production forecast, industrial output is expected rise 9.0 percent in February and fall 2.7 percent in March.

Industries that are expected to contribute to the increase in February include business oriented machinery, transport equipment and electronic parts.

Industries expected to contribute to the decline in March include electronic devices, electrical machinery and transport equipment.

Also on Wednesday, the METI said that retail sales in Japan were down a seasonally adjusted 1.8 percent on month in January.

That missed forecasts for a decline of 0.6 percent following the 0.9 percent gain in December.

On a yearly basis, retail sales advanced 1.6 percent - again missing expectations for a gain of 2.4 percent and slowing from 3.6 percent in the previous month.

Sales from large retailers advanced an annual 0.5 percent - exceeding forecasts for 0.4 percent and slowing from 1.1 percent a month earlier.

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COLOMBIA: Bogot? Asks Caracas To Open Humanitarian Channel

The President of Colombia Juan Manuel Santos asked the Venezuelan government to allow at least one humanitarian channel to alleviate the situation of the country's population.

According to him, Venezuela's trouble is "an issue that greatly concerns us." He added that both Colombia and Peru are receiving significant inflows of Venezuelan migrants.

Santos said that both countries are concerned "not only with the social situation that the Venezuelan people are experiencing, and the crisis that the country is experiencing and the repercussions on the population," but also with what he called as "the destruction of democracy, disrespect, and violation of all the fundamental rights of Venezuelan citizens and the overflow of democratic institutions."

Santos also stressed that Colombia and Peru would continue to insist "until we see Venezuela with a functioning democracy again."

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Treasury Yields Slide as Trump Slaps Tariffs on Steel, Aluminum Imports

Prices of U.S. government bonds edged up, driving down yields, as investors hurried to secure safe-haven government paper after the Trump administration announced its decision to impose global tariffs on steel and aluminum imports that triggered a stock-market selloff.

In his second testimony to the Congress, Federal Reserve Jerome Powell said he saw no indications of solid wage pressure, language that some market participants aw as an effort to backtraw his hawkish comments earlier in the week. The 10-year Treasury note yield declined 6.7 basis points to 2.802 percent, denoting the biggest one-day decline since September 5, according to WSJ Market Data Group.

The two-year note yield, the most affected by the monetary policy outlook, edged down 5.6 basis points to 2.206 percent, marking the biggest one-day decline in three weeks. The 30-year bond yield fell 4.6 basis points to 3.084 percent.

The last two days of trading has helped to counter some of the selloff in February when a revival of inflation worries weakened the appetite for bonds.

Treasury yields climbed after President Donald Trump announced levies on steel and aluminum imports, causing stocks to slide. Jittery investors flocked to government paper to secure safe-haven assets to protect themselves against market volatility.

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