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Gold Prices Rise Amid Concerns Over Trade War, Italy Elections





Gold prices increased on Monday as the dollar remained subdued on concerns over a potential global trade war, as well as amid uncertainty surrounding the outcome of elections in Italy, providing support to the precious metal.


Spot gold gained 0.3 percent at $1,326.41 per ounce. Earlier in the session, it notched $1,327.03, their highest since Feb. 27.


U.S. gold futures rose 0.3 percent to $1,327.70 per ounce.


The dollar index, which measures the U.S. currency against a basket of major peers, was mostly unchanged at 89.971, after falling against most currencies on Friday.


The greenback fell from its six-week high that it hit on March 1, after U.S. President Donald Trump announced plans to levy hefty tariffs on aluminium and steel imports fueling fears of retaliation from its trade partners triggering a trade war.


Italian voters delivered a hung parliament on Sunday and if early projections are confirmed, none of Italy's three main groups will be able to rule alone and there is little prospect of a return to mainstream, moderate government, giving the European Union a new predicament to deal with.


Spot gold could increase to $1,332 per ounce, as it has pierced above a resistance at $1,325, according to Reuters technical analyst Wang Tao.


In other precious metals, silver climbed 0.6 percent to $16.58 per ounce. Platinum rose 0.6 percent to $965.49 per ounce, while palladium added 0.3 percent at $994.50.

Australia Keeps Rates On Hold





Australia's central bank decided to leave its key interest rate unchanged at a record low, as widely expected, on Tuesday.


The board of the Reserve Bank of Australia, governed by Philip Lowe, maintained the cash rate at 1.50 percent.


The bank noted that the low level of interest rates is continuing to support the Australian economy.


The Bank's central forecast is for the Australian economy to grow faster in 2018 than it did in 2017.


The central forecast is for CPI inflation to be a bit above 2 percent in 2018.


Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.


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Volcker Rule Reviewed for ‘Material Changes’: Fed’s Quarles





The top regulator for the U.S. Federal Reserve on Monday said that the country's regulators are actively assessing the possibility of significantly rewriting the “Volcker Rule.”


Speaking at a gathering of bankers in Washington, Fed Vice Chair for Supervision Randal Quarles said that regulators want to make “material changes” in order to streamline and simplify a number of aspects of the restrictions on certain bank trading, which were implemented in the wake of the 2007-2009 financial crisis.


The comments are the most recent and most clear recommendation yet of regulators to overhaul one of the central post-financial crisis rules, which bans lenders from making profit-seeking trades on their own account. However, its present form, established in 2013, has been criticized by bank executives as complex, ambiguous and unworkable, points to which Quarles agrees.


In his prepared remarks, Quarles expressed his belief that the regulation implementing the Volcker rule is not 'working well'. He said that all his regulatory colleagues have expressed their support for the proposition that the regulation is overly complex and would benefit from streamlining.


According to Quarles, regulators are actively working to simplify key terms that define the rule's boundaries, including “proprietary trading” and “covered fund”.


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Australia GDP Expands 0.4% In Q4





Australia's gross domestic product advanced a seasonally adjusted 0.4 percent on quarter in the fourth quarter of 2017, the Australian Bureau of Statistics said on Wednesday.


That was shy of expectations for 0.5 percent and down from 0.6 percent in the three months prior. On a yearly basis, GDP gained 2.4 percent - again missing forecasts for 2.5 percent and down from 2.8 percent in Q3.


"Growth this quarter was driven by the household sector, with continued strength in household income matched by growth in household consumption," ABS Chief Economist Bruce Hockman said.


Household final consumption expenditure increased 1.0 percent for the quarter.


Exports of goods and services detracted 0.4 percentage points from GDP growth.


Final consumption expenditure picked up 1.1 percent on quarter and 3.3 percent on year, while gross fixed capital formation shed 1.2 percent on quarter and climbed 2.5 percent on year.


The terms of trade added 0.1 percent on quarter and fell 1.0 percent on year, while real disposable income was flat on quarter and gained 1.5 percent on year.


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Treasury Yields Slide amid Tariff Uncertainty, CVS Bond Sale





U.S. government bonds slightly retreated on Tuesday, paring early gains, after traders position amid a massive corporate bond offering by CVS Health and as uncertainty regarding global tariffs on aluminum and steel imports weighed on markets.


The 10-year Treasury note yield was mostly unchanged at 2.877 percent. Yield on the two-year note yield was mostly flat at 2.246 percent. The long bond or the 30-year bond rate edged down by 1.6 basis points to 3.135 percent.


According to traders, the bond market steadied as CVS Health Corp. acquired around $50 billion dollar worth of debt on Tuesday. Firms looking to issue bonds depend on dealers to unload the massive stockpiles and the said dealers will most likely hedge a sudden jump in interest rates by letting go of their Treasury holdings.


U.S. government paper experienced brief selling earlier in the session after House Majority Leader Paul Ryan, along with other congressional Republicans, appear to step up pressure on President Donald Trump to ease up on his protectionist stance. On the other hand, Treasury Secretary Steven Mnuchin stated Mexico and Canada will be excluded from the tariffs if NAFTA is successfully renegotiated. The lack of certainty on the trade front has weakened the demand for stocks, while increasing the demand for bonds.


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Australia January Trade Surplus A$1.055





Australia posted a merchandise trade surplus of A$1.055 billion in January, the Australian Bureau of Statistics said on Thursday.


That blew away forecasts for a surplus of A$200 million following the upwardly revised A$1.146 billion deficit in December (originally A$1.358 billion).


Exports gained A$1.394 billion or 4.0 percent on month to $33.924 billion.


Non-rural goods added A$869 million (4 percent) and non-monetary gold gained A$770 million (54 percent).


Rural goods fell A$312 million (8 percent) and net exports of goods under merchanting tumbled A$9 million (17 percent). Services credits added A$77 million (1 percent).


Imports sank A$807 million or 2.0 percent to AA$32.869 billion.


Consumption goods lost A$586 million (7 percent), non-monetary gold dropped A$95 million (19 percent) and capital goods fell A$90 million (1 percent).


Intermediate and other merchandise goods lost A$68 million (1 percent), while services debits picked up A$31 million


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U.S. Consumer Credit Increased in January





U.S. consumer debt grew in January by the least in four months on a sharp slowdown in use of revolving products such as credit cards, Federal Reserve data showed.


The Fed said consumer credit increased by $13.9 billion in January after surging by $19.2 billion in December. Economists had expected consumer credit to increase by $17.9 billion.


The report said non-revolving credit such as student loans and car loans increased by $13.2 billion in January after rising by $13.1 billion in December.


Revolving credit, which largely reflects credit card debt, edged up by $0.7 billion in January following a $6.1 billion increase in the previous month.


Consumer credit climbed by an annual rate of 4.3 percent in January, as non-revolving credit surged up by 5.6 percent and revolving credit rose by 0.8 percent.


The slow growth in revolving debt, in line with sluggish household spending figures reported for January, indicates consumers may have been reluctant to increase credit-card balances following robust outlays in the fourth quarter. Gains in overall consumer credit cooled for a second month.


A strong jobs market and the tax cuts enacted in December are likely to support household spending in the first half of the year. The Fed's consumer credit report doesn't track debt secured by real estate, such as home equity lines of credit and home mortgages.


Lending by the federal government, which is mainly for student loans, increased by $26.3 billion in January, before seasonal adjustment.


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China CPI Jumps To 2.9% In February





Consumer prices in China were up 2.9 percent on year in February, the National Bureau of Statistics said on Friday.


That exceeded forecasts for 2.4 percent and was up sharply from 1.5 percent in January.


On a monthly basis, consumer prices jumped 1.2 percent following the 0.6 percent gain in January.


The bureau also said that producer prices advanced an annual 3.7 percent versus expectations for 3.8 percent and down from 4.3 percent in the previous month.


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U.S. Services Data Suggests Upward Revision to 4th Quarter GDP





U.S. economic expansion for the fourth quarter is likely to be revised higher after recent data indicated more spending on services than previously estimated by the government.


According to the Commerce Department's quarterly services survey, or QSS, added to December data on construction spending and manufacturers inventories in suggesting that gross domestic product grew much faster than the 2.5 percent annualized rate reported by the government in its second estimate last month.


Before the QSS data, economists had expected that GDP growth for the October-December quarter would be raised to about a 2.6 percent rate. Some now expect fourth-quarter GDP growth would be revised up to a 2.9 percent rate when the Commerce Department's statistics agency, the Bureau of Economic Analysis, incorporates the data into its third estimate to be published later this month.


Spending on intellectual property products was previously reported to have increased at a 2.4 percent rate in the fourth quarter.


“The QSS points to stronger services spending in the fourth quarter than the BEA had previously estimated,” according to Daniel Silver, an economist at JPMorgan in New York.


“And while the QSS often impacts health care categories within the spending data, we think that much of the expected fourth-quarter upward revision will be related to spending on motor vehicle maintenance and repair.”


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COLOMBIA: Colcap Raises Slightly On Ecopetrol, Caution With Elections





Colcap, the main index of the Colombian Stock Exchange, added 0.41% to 1,480.56 points near Friday's closing, due to the rise of Ecopetrol's shares (+1.01%) in a session marked by a substantial business volume ahead.


The increase in Ecopetrol's stocks tracked the rebound in oil prices abroad.


Analysts at Davivienda Corredores noted that despite the slight rise, the Colombian index remains lagging behind the performance of other Latin American stock exchanges mainly because of the uncertainty for the legislative elections results.


On the business side, Avianca's shares rose by 1.13% despite reports that its subsidiary companies mobilized 2,320,638 passengers in February, 0.3% less than the passengers transported in the same month last year.


The locally traded U.S. dollar closed at 2,868.80 Colombian pesos, marking a 0.25% fall, due to the rebound in oil prices abroad.


"As long as oil prices remain close to US$ 60, the valuations will be limited. There was also a natural reaction before Sunday's legislative elections," said Wilson Tovar, an analyst at Acciones & Valores.


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