GBP has rallied to the top of its peer group today in response to a stellar UK retail sales report that came in well above street estimates. The gains, while encouraging, have not been enough yet though to call off a head and shoulders top, which still requires a break through $1.6500. An improving UK economy may increase pressure on the Bank of England to start normalizing monetary policy through interest rate increases or QE reductions sooner than previously expected which could maintain support for Cable above the $1.6320 neckline. The other main action in FX markets today has been in the resource Dollars. AUD and CAD continue to steadily weaken in the wake of this month’s dismal Canadian and Australian employment reports. Today’s drop in NZD has been a bit of a surprise in that the RBNZ has been the major central bank most likely to raise interest rates soon. Today’s action appears to be related to the other resource dollars dragging on the Kiwi perhaps some profit-taking ahead of this weekend’s China data. China kicks off next week (Sunday evening in North America) with its Q4 earnings report and the rest of its key monthly indicators. The street will likely be looking for more evidence of a soft landing and the implications of the results for resource demand. This could impact trading in China-sensitive markets including copper, China A, Hang Seng, S&P/ASX, AUD and NZD. Stock indices have been relatively quiet to wrap up the week as traders digest another mixed bag of earnings reports with UPS putting out a profit warning, Intel missing and going nowhere on guidance offset by better than expected reports from financials. Energy markets have been on the rebound this morning, particularly crude oil and gasoline. Natural gas continues to drift lower suggesting that the street had already priced in last week’s big drawdown and that traders may now be starting to look toward the end of heating season. Corporate News UPS Surprise profit warning! Q4 $1.25 vs street $1.43, Full year $4.57 vs guidance $4.65-$4.85. company blames last minute surge in online orders (which could have been due to bad weather and related temporary store closures in many regions) Intel $0.51 vs street $0.52, sales $13.8B vs street $13.7B, guides F14 sales to be same as 2013 at $52.7B vs street $53.1B General Electric $0.53 in line Schlumberger $1.35 vs street $1.32, 28% dividend increase Morgan Stanley continuing ops EPS $0.50 vs street $0.44 SunTrust Banks $0.77 vs street $0.70 Comerica $0.77 vs street $0.74 Johnson & Johnson FDA panel voted 10-0 against approval of Xarelto cardiovascular product application Dollarama same store sales for Nov and Dec combined down 1.4% over year. This was blamed on bad weather related power outages that forced 80 stores to close for a few hours up to two days Economic News Significant economic announcements released yesterday afternoon and overnight include: US housing starts 999K vs street 990K US building permits 996K vs street 1,014K UK retail sales 5.3% vs street 2.5% UK retail sales ex auto 6.1% vs street 3.2% Economic reports due later today include: 9:15 am EST US industrial production street 0.3% vs previous 1.1% 9:15 am EST US manufacturing production street 0.3% vs previous 0.6% 9:55 am EST US Michigan confidence street 83.5 9:00 pm Sun EST China Q4 GDP street 7.6% vs previous 7.8% 9:00 pm Sun EST China industrial production street 9.8% vs previous 10.0% 9:00 pm Sun EST China retail sales street 13.6%

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