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US Review

·         December JOLTS reported 5.028 million job openings, slightly better than expected and in November. Initial Jobless Claims have gone up to 304,000 last week, weaker than the consensus of 288,000. However, the long-stranded labor participation cast doubt on an improving labor market suggested by decreasing trend of jobless claims.

·         Retail sales fell more than expected in January, declining 0.8% versus expectation of 0.5%, despite the oil price surge in the second half of January.

·         Housing market continued to disappoint the expectations of recovery. Housing starts and permits are both below expectation, with housing market index down from 57 to 55.

·         Headline PPI fell further into negative territory, decreasing 0.8 percent, while core PPI also fell to negative value. Over the last year, even core PPI only grew 1.5%, negating interest rate increase in the near future.

·         Other indicators also pointed to a slow economic recovery. Industrial production for January rebounded 0.2 percent after a December decrease of 0.3 percent, below expectation. The general business conditions index of the Philadelphia Fed's Business Outlook Survey for February fell further to 5.2, well below the expectation of 8.2. Both indicated slower-than-expected pace of recovery in the U.S.

·         January FOMC meeting minutes indicated that the Fed remained “patient” for the first policy interest rate increase. Soft wage growth was still a noticeable concern.


Global Review

·         The sharp drop of British CPI pushed back the main policy rate raise plan of Bank of England, while the core CPI is 1.4%, slightly above expectation.

·         Japan’s 2.2% annualized GDP growth was disappointing compared with the expectation of 3.7%. Moreover, trade contributed to half of the growth, while in the fourth quarter last year Japan announced a QQE program which helped its export grew twice as fast as import.