I. Yesterday's News
International News
1. U.S. homebuilding fell 2.6 percent in January as the construction of multi-family housing projects dropped, but upward revisions to the prior month's data and a jump in permits suggested the housing recovery remained on track. Permits for future construction jumped 4.6 percent in January to a rate of 1.29 million units, the highest level since November 2015. Other reports on Thursday also offered a fairly upbeat assessment of the economy early in the first quarter. Factory activity in the mid-Atlantic region vaulted to a 33-year high in February and the number of new applications for unemployment benefits was less than expected last week.

2. The Federal Reserve aims to raise U.S. interest rates in the months ahead as long as the economy continues to grow a bit above its trend and if, as expected, fiscal policies provide a boost, an influential Fed policymaker said on Wednesday. The comments by New York Fed President William Dudley at Cornell College of Business reinforced the central bank's cautious optimism that President Donald Trump and the Republican-controlled Congress would not derail plans for gradual rate hikes in the months and years ahead.

3. European Central Bank policymakers called for a steady-hand approach at last month's rate meeting, the minutes of the gathering showed, suggesting little appetite for dialling back stimulus while Europe gears up for high-stakes elections. Arguing that the recent inflation surge was temporary and threats to growth remained, policymakers were in wide agreement to continue with the policy of aggressive bond purchases, the minutes of the Jan 19 meeting showed on Thursday. They kept the door open to more stimulus despite accelerating growth.

4. OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said. Officials in the 13-member Opec, including Saudi Energy Minister Khalid al-Falih, have said oil stocks need to fall near to their five-year average for the group to say markets are becoming balanced.

5. Confidence among Japanese manufacturers rose for a sixth straight month in February but the service sector's mood fell for the first time in four months, a Reuters poll showed, underscoring the export-led nature of the economic recovery. In the poll, the sentiment index for manufacturers rose to 20 from 18 in January, while service-sector index fell to 26 in February from 30 in the previous month. The Reuters Tankan survey found confidence at manufacturers slipping over the next three months and service-sector firms holding steady.

Domestic News
6. Economists at the Chinese Economists 50 Forum on Wednesday criticized insufficient enforcement of government policies, underscoring the negative impact of relying on executive means in cutting overcapacity, destocking, deleveraging, reducing corporate costs and shoring up weak spots, and risk exposure amid economic downturn. They called for a fair, impartial and open market environment, a clearer property right and complete social system.

7.Chinese bank lending surged to a one-year high in January, and total social financing, a broader gauge, hit a record high. The figure is less than analysts expected as China’s central bank had been strictly controlling credit scale. The People’s Bank of China will normalize guidance on credit injection while constantly oversees lending into real economy.

8. China’s foreign direct investment (FDI) and outbound direct investment (ODI) fell in January compared with the same period last year. A high level reached in 2016 and the Spring Festival last month contributed to the FDI’s decline. But a weak monthly report does not represent a year’s trends as China still retains its cutting edge in attracting foreign investment, the Ministry of Commerce said.

9. Several Chinese provinces reported fixed asset investment (FAI) that was even stronger than 2016’s GDP due to divergence on statistical methods and scope, China International Capital Corporation Limited (CICC) said. An overvalued FAI by local statistical bureaus is a key reason behind the distortion.

II. Market Overview
FX
1. Global Market
The dollar weakened against a basket of major currencies on Thursday, posting its steepest one-day drop in over two weeks, due to lower U.S. bond yields and uncertainty over the timing of the Federal Reserve's next interest rate increase. The dollar index was last down 0.7 percent at 100.49, below a one-month peak of 101.76 reached on Wednesday. The greenback scaled back from a 2-1/2 week high of 114.95 yen on Wednesday against the yen. It was last down 0.9 percent at 113.15 yen. The euro gained 0.7 percent at $1.0669, recovering from a five-week trough of $1.052 set on Wednesday.

2. Home Market
China's yuan rose to a more than three-week high against the dollar on Thursday, with the central parity rate modestly higher, as investors continued FX settlement. The offshore yuan also regained some ground as the dollar took a breather. Stable liquidity in offshore yuan suggested modest bets on yuan depreciation.

Precious Metals
Gold rose on Thursday as the dollar weakened after a 10-day winning streak and investors took the opportunity to buy bullion as a hedge against political uncertainty in the United States and Europe. Spot gold rose to $1,238.76 an ounce. U.S. gold futures settled up 0.7 percent at $1,241.60.

Commodities
1.Crude Oil
Oil prices ended modestly higher on Thursday, as the market weighed swelling U.S. inventories against possible renewed efforts by major oil producers to reduce a price-sapping glut. Oil swayed between modest gains and losses throughout the session, and U.S. crude futures settled at $53.36 a barrel, up 25 cents. Brent crude ended the day at $55.65 a barrel, down 10 cents.

2.Base Metals
Nickel prices rose to two-month highs on Thursday on mounting concerns about supplies after the suspension of mines in top ore producer the Philippines and its decision to cancel contracts for undeveloped mines. Benchmark nickel on the London Metal Exchange ended up 1.4 percent at $11,070 a tonne, its highest since Dec. 12. Elsewhere, copper closed 1.1 percent lower at $6,000 a tonne on profit-taking after a failure to build on a recent rally. China’s downbeat OAI also weighed on market mood.

U.S. Treasuries
1. U.S. bonds
U.S. Treasury prices gained on Thursday as weaker stock markets and a falling U.S. dollar increased demand for safe haven bonds, and after comments from a senior Federal Reserve official late on Wednesday were viewed as relatively dovish. Benchmark 10-year notes were last up 17/32 in price to yield 2.44 percent, down from 2.50 percent late on Wednesday.

2. Chinese bonds
China’s interbank money rates outperformed financial bonds earlier on Thursday, boosted by rising government debt futures. Liquidity tightened as the TLF expired today did not renew, which had a limited impact on cash bonds due to continued medium-term lending facility, and net injection by the central bank in open market. Market was also muted as institutions had already taken that into consideration.

Stock Market
1. U.S. Equities
The Dow Jones Industrial Average scored its sixth straight record high on Thursday, but just barely, while the S&P 500 edged lower due to declining energy stocks. The Dow Jones Industrial Average ended up 7.91 points or 0.04 percent to close at 20,619.77, its sixth straight record-high close. The S&P 500 had lost 2.03 points or 0.09 percent to 2,347.22 and the Nasdaq Composite dropped 4.54 points or 0.08 percent to 5,814.90.

2. Hong Kong Equities
Hong Kong stocks closed at an 18-month high on Thursday, with sentiment boosted by Wall Street's ongoing rally and demand from China. The benchmark Hang Seng index added 0.5 percent, to 24,107.70 points, the highest since August 2015, while the Hong Kong China Enterprises Index gained 0.2 percent, to 10,455.02 points.

3. China Equities
China stocks posted modest gains to an over two-month high on Thursday. Most sectors rose led by upstream cyclical. But market is expected to sway at current level on divergent forecasts. The Shanghai Composite Index added 16.63 points or 0.52 percent to 3,229.62, within the distance of the previous closing high of 3,232.88 hit on Dec. 9 2016.