· The U.S. dollar fell to a more than three-year low against the euro on Friday, extending recent losses on expectations European Central Bank policymakers are preparing to reduce stimulus, while U.S. stocks continued to rally and marked record closing highs.
The euro was up 1.21 percent to $1.2177, on pace for its biggest single-day percentage gain against the greenback in more than six months.
The euro’s rise weighed on the dollar index, which measures the greenback against six rival currencies. The index was down 1 percent, after slipping to a four-month low of 90.954.
· A sharp rise in underlying inflation last month was not enough to convince at least one Federal Reserve policymaker that further interest rate hikes will soon be needed to keep a lid on rising prices.
A government report Friday showed core U.S. consumer prices rose the most in 11 months in December, bolstering expectations that inflation will accelerate this year.
“I, for one, need to see more data,” Minneapolis Federal Reserve Bank President Neel Kashkari said on Twitter, pushing back on the idea that inflation gains will convince Fed policymakers that inflation is on the upswing.
· The recent drop in U.S. unemployment could spark a surge in inflation that, given the Federal Reserve’s current policy framework, could trigger interest-rate hikes that bring on a recession, Boston Federal Reserve President Eric Rosengren warned on Friday.
· U.S. Treasury Secretary Steven Mnuchin said on Friday he believed the Republican tax cuts will ultimately become revenue neutral over 10 years due to higher growth, but the Treasury will likely ask Congress for more money to implement the plan.
“We think there will be over $1 trillion in growth, so I do think this will pay for itself,” Mnuchin said at an event hosted by the Economic Club of Washington, dismissing estimates from the Joint Committee on Taxation that the tax cuts will increase U.S. deficits by $1.1 trillion to $1.5 trillion over 10 years.
· Emboldened by a preliminary coalition deal between Chancellor Angela Merkel and the Social Democrats (SPD), Germany and France will try to inject new momentum into their stalled EU reform efforts this week when their finance ministers meet in Paris.
Peter Altmaier, one of Merkel’s closest party allies, will pay a visit to his French counterpart Bruno Le Maire on Thursday, a day after leading French and German economists unveil new recommendations for a reform of the euro zone.
The meeting is a sign that Berlin is prepared to negotiate with Paris in parallel to Merkel’s coalition talks with the SPD, which could begin later this month if members of the centre-left party give a green light at a party congress next Sunday.
· German Chancellor Angela Merkel is considering joining French President Emmanuel Macron at the World Economic Forum in Davos next week in what could turn into an epic clash of competing world views with U.S. President Donald Trump.
· China will step up oversight in the banking sector this year to reduce financial risks, the country’s banking regulator said, stressing that long-term efforts would be needed to control banking sector chaos.
The China Banking Regulatory Commission (CBRC) said late on Saturday in a statement that its priorities included increasing supervision over shadow banking and interbank activities.
· North Korea and South Korea have agreed to hold working-level talks at the Tongil Pavilion on the North Korean side of the truce village of Panmunjom on Jan. 15, South Korea’s unification ministry said in a statement on Saturday.
· Iran said on Saturday it would retaliate against new sanctions imposed by the United States after President Donald Trump set an ultimatum to fix “disastrous flaws” in a deal curbing Tehran’s nuclear program.
· Bank of Japan Governor Haruhiko Kuroda on Monday reiterated the central bank’s resolve to maintain its massive stimulus programme until the economy reaches sustained 2 percent inflation.
He also said a moderate economic expansion now under way will help accelerate inflation toward the BOJ’s 2 percent target, signalling its desire to maintain the status quo on monetary policy for the time being.
· Trump said on Friday he would waive nuclear sanctions on Iran for the last time to give the United States and European allies a final chance to amend the pact. Washington also imposed sanctions on the head of Iran’s judiciary and others.
Iraqi Oil Minister Jabar al-Luaibi said on Saturday that the OPEC member’s oil output capacity is nearing 5 million barrels per day, but the country will remain in full compliance with its output target under a global pact to cut supplies.
Luaibi said the supply cut agreement between OPEC and non-OPEC producers should continue despite a rise in oil prices.
· Oil prices rose for a sixth day on Friday after Russia’s oil minister said that global crude supplies were “not balanced yet,” alleviating market concerns about a wind-down of the OPEC-led deal to reduce production.
Brent crude futures LCOc1 rose 61 cents to settle at $69.87 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 50 cents to $64.30. WTI hit its strongest since late 2014 at $64.77 on Thursday.
For the week, Brent rose 3.3 percent while WTI jumped 4.7 percent.
· Venezuela’s oil production has increased to near 1.9 million barrels per day (bpd) after hitting a historic low last year, according to Manuel Quevedo, oil minister and head of state oil firm PDVSA [PDVSA.UL], who vowed 2018 will see output rise to more than 2.4 million bpd.
Reference: Reuters
Thai
Eng