Stocks started the day off slow but have been steadily strengthening. While European indices finished off down on the day, US indices continued to climb through the afternoon with the S&P 500 once again testing its all-time highs. Fed Chair Yellen’s testimony to Congress was pretty much the same as two weeks ago. She indicated that there has been a weather effect and the Fed is monitoring to determine how much of recent softness is weather related. On the interim unless something major changes, she expects tapering to continue and wrap up in the fall sometime. US markets finishing near their highs of the day have built positive momentum heading into today’s Asia Pacific trading. Chinese indices may continue to build on yesterday’s bounce that was sparked by the removal of more emergency liquidity and reports that recent CNY weakness was caused by the PBOC preparing for a widening of the trading band. The main action today, however, may be seen in JPY and Japanese stocks with the main monthly basket of economic indicators. JPY has also benefitted recently from defensive capital flows along with CHF. Gold started out higher but has drifted back as the day has progressed. Action may continue right through the weekend. With month-end today there is a flurry of major announcements due in both North America and Europe. Traders may not only react to these developments but also may start to position for next week’s news which includes global manufacturing and service PMI numbers, north American employment reports and four central bank meetings including the RBA and Bank of Canada. Economic News Significant announcements released overnight include: Spain GDP (0.2%) vs street (0.1%) Germany unemployment change (14K) vs street (10K) Germany unemployment rate 6.8% as expected Germany consumer prices 1.2% svs street 1.3% Brazil interest rate 0.25% increase to 10.75% as expected Brazil GDP 1.9% vs street 1.5% US jobless claims 348K vs street 335K US durable goods orders (1.0%) vs street (1.6%) US durables ex transport 1.1% vs street (0.3%) FOMC chair Yellen Senate testimony US natural gas storage (95 BCF) vs street (103BCF) Upcoming significant announcements include: 10:15 am AEDT Japan manufacturing PMI previous 56.6 10:30 am AEDT Japan unemployment rate street 3.7% 10:30 am AEDT Japan consumer prices street 1.3% vs previous 1.6% 10:50 am AEDT Japan industrial production street 9.4% vs previous 7.1% 10:50 am AEDT Japan retail sales street 3.8% vs previous 2.6% 4:00 pm AEDT Japan housing starts street 15.0% 4:00 pm AEDT Japan construction orders previous 4.9% 11:00 am AEDT NZ ANZ activity outlook previous 53.5 11:00 am AEDT NZ ANZ business confidence previous 64.1 7:00 am GMT UK Nationwide house prices street 9.0% 7:00 am GMT Germany retail sales street (1.7%) 8:00 am GMT Spain consumer prices street 0.1% 9:00 am GMT Italy unemployment rate street 12.7% 10:00 am GMT Eurozone unemployment rate street 12.0% 10:00 am GMT Greece retail sales previous 0% 12:00 pm GMT India GDP street 4.7% 8:00 am EST Brazil manufacturing PMI previous 50.8 8:30 am EST Canada Dec GDP street 2.5% 8:30 am EST Canada Q4 GDP street 2.6% 8:30 am EST US Q4 GDP annualized street 2.5% 9:45 am EST US Chicago PMI street 56.4 vs previous 59. 9:55 am EST US U of Michigan confidence street 81.2 10:00 am EST US pending home sales street 1.8%

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