Here are the latest developments in global markets:
FOREX: Despite rising US Treasury yields, the dollar was under pressure against its major peers, with traders attributing the phenomenon to concerns surrounding a potential ballooning US debt and the expectations that other central banks could start raising rates amid higher inflation prospects. Dollar/yen tumbled to a fresh one-year low of 105.54 during the Asian session before it inched up to 106.17 (-0.04%) in early European trading. The dollar index was struggling to deviate above three-year lows, moving slightly up to 88.70 (+0.12%) after reaching a low of 88.25. Pound/dollar failed to gain ground on the back of the dollar’s weakness, breaking below 1.41 towards 1.4070 as readings on the UK’s retail sales disappointed analysts, while the EU Brexit negotiator reiterated today in a speech at the Munich Security Conference that Britain’s stance on trade and regulation was putting EU-UK trade relations at risk. Euro/dollar weakened to 1.2483 (-0.18%), while euro/pound was flat at 0.8874. Aussie/dollar and kiwi/dollar were set to achieve weekly gains for the first time in two weeks, last seen at 0.7955 (+0.16%) and 0.7410 (+0.07%).
STOCKS: European stocks headed for a positive weekly close following sharp declines the past two week as worries on inflation somewhat eased, while earnings releases continued to provide support to equity markets. The pan-European STOXX 600 was up by 0.91% at 1030 GMT, underpinned by positive earnings outcomes delivered by large multinationals including ENI, Renault, and Schneider. The blue-chip Euro STOXX 50 was trading 0.93% higher, driven by utilities and consumer cyclicals. The Italian FTSE MIB and the Spanish IBEX 35 jumped by 1.0%, the French CAC 40 and the German DAX 30 rose by 0.73%. The UK FTSE 100 increased by 0.71%, while the US stock futures were in the green, pointing to a positive open.
COMMODITIES: Oil prices were rising for the third day in a row, lifted by a falling dollar and a recovering stock market. However, concerns around rising US oil production were looming in the background, restricting steeper increases. WTI crude and Brent were fluctuating near one-week highs, last seen at $61.60 (+0.35%) and $64.62 (+0.45%) respectively. In precious metals, gold stretched up towards a fresh 3-week high of $1361.61/ounce (+0.38%).
Day ahead: US housing data and University of Michigan consumer sentiment pending
The US will finish the week publishing further details on the economy and potentially ahead of a relatively quiet week in terms of US data releases.
At 1330 GMT, investors will keep a close eye on the US housing stats, with analysts predicting that the number of building permits might have remained unchanged at 1.300 million in January, while they see housing starts rebounding by 3.6% m/m in the aforementioned period to reach an annualized number of 1.234 million due to a milder cold weather in January. January’s import prices will be also published along with the above data, giving additional evidence on inflationary pressures. Expectations are for the import price index to rise by 0.5 percentage points to 0.6% on a monthly basis.
At 1500 GMT, the University of Michigan will deliver initial estimates on the US consumer sentiment, forecasting that the index might inch down to 95.5 in February compared to 95.7 in the previous month.
Later in the day, Baker Hughes will report on the US oil rig counts for the week ending February 9. Note that the measure was showing increasing production the past three weeks, giving some boost to oil prices.
Meanwhile in Canada, growth in manufacturing sales is anticipated to slow down significantly to 0.2% in December after surging by 3.4% m/m in November, posting the largest expansion seen since March 2011.
In politics, US Secretary of State Rex Tillerson will be meeting Turkish Foreign Minister Mevlüt Çavuşoğlu. The meeting could be interesting given the rising tensions between the two countries. Also of interest – amid Brexit negotiations – might be a meeting between UK PM Theresa May and German Chancellor Angela Merkel in Berlin.
Turning to stock markets, earnings releases will continue to attract attention, with Coca-Cola Co and Kraft Heinz Company being among companies to reveal quarterly reports. Both multinationals are expected to report higher profits for the fourth quarter.
 in early European trading. ){kind=link}