Asia

PBOC Adds To Bank Funds Amid Worst Cash Crunch Since June. China added funds to selected banks today after the benchmark money-market rate jumped the most since a record cash crunch in June. The People’s Bank of China conducted short-term liquidity operations recently and will continue to supply funds to qualified financial institutions in this way based on the situation, it said on its microblog. The announcement did not give details of the size or pricing of the cash injections. The monetary authority injected 200 billion yuan ($32.9 billion), online financial news provider Netease reported, citing an unidentified person. The seven-day repurchase rate, a gauge of funding availability in the banking system, jumped 140 basis points to 6.60 %, according to a daily fixing by the National Interbank Funding Center. That is the biggest increase since a 270 basis point jump on June 20 that drove the rate to an all-time high of 10.77 % and prompted the central bank to conduct short-term liquidity operations. The seven-day repo tumbled 227 basis points the following day. (Bloomberg)

USA

U.S. Jobless Claims Unexpectedly Rise On Holiday Distortions. Applications for U.S. unemployment benefits unexpectedly rose last week to an almost nine-month high, showing fluctuation in the filings that typically occurs around the year-end holidays. Jobless claims climbed by 10,000 to 379,000 in the period ended Dec. 14, the most since the end of March, Labor Department data showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a decrease to 336,000. It’s best to focus on the four-week average during the holiday season to determine the underlying trend, a government spokesman said as the figures were released. (Bloomberg)

Leading Index Gain Signals U.S. Strengthening. The gauge of leading indicators rose more than forecast in November, underscoring the Federal Reserve’s view of an improving U.S. economy. The Conference Board’s index, a measure of the outlook for the next three to six months, increased 0.8 % after rising 0.1 % in October, the New York-based group said today. Other reports showed sales of existing homes were restrained last month by the jump in mortgage rates, and claims for jobless benefits climbed last week, reflecting year-end distortions. (Bloomberg)

Previously Owned Home Sales In U.S. Drop For Third Month. Previously owned U.S. home sales declined for the third consecutive month in November to the lowest level of the year as rising mortgage rates and a limited supply of propertiesdiscouraged buyers. Purchases dropped 4.3 % to a 4.9 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of economists in a Bloomberg survey called for the pace to slow to 5.02 million. Still, the group projects 2013 will be the best year for the industry in seven years, with an estimated 5.1 million properties sold. (Bloomberg)

U.S. 10-Year Yields Jump To Highest In Three Months On Fed Taper. Treasury notes slid for a second day, pushing 10-year yields to a three-month high, on bets the Fed will conclude its bond-buying program by the end of next year as it steadily reduces purchases amid economic improvement. A government auction of $29 billion in seven-year notes drew the highest yield in more than two years as demand sank below average. Treasuries fell even after initial jobless-benefit claims unexpectedly rose last week. The Fed said yesterday it will cut monthly asset buying in its quantitative-easing program to $75 billion in January, from $85 billion. (Bloomberg)

Europe

EU Leaders To Approve Eurozone Banking Reform Deal. EU leaders are meeting in Brussels to approve a common set of rules for managing the closure of failing eurozone banks in an orderly way. Under a plan agreed by finance ministers a 55bn-euro ($75bn) fund will be set up, financed by the banking industry, over 10 years. The deal is aimed at building an EU banking union that should minimise the need for taxpayer-funded bailouts. It could be the biggest centralisation of EU power since the euro's launch. (BBC)

UK Retail Sales Pick Up In November Helped By Clothing. British retail sales rose last month recovering from a fall in October, helped by shoppers buying warm clothes after a mild start to autumn, official data showed on Thursday. Retail sales volumes were up 0.3 % on the month, the fastest monthly growth in the month of November since 2010, to show 2.0% expansion on the year, the Office for National Statistics said. Economists in a Reuters poll had expected retail sales to rise 0.3 % on the month after a fall in October, and for sales to be 2.3 % higher on the year. (Reuters)

Currencies

China To Relax Rules For Currency Derivatives. China is set to simplify and tweak its rules for currency swaps and options to encourage investors to manage their currency risks, the country's regulator said on Thursday. As China relaxes its grip over the yuan's value, the authorities want domestic investors and companies to learn to deal with currency risks to minimise financial losses that may threaten the health of the world's No 2 economy. From Jan 1, financial institutions that already offer currency forwards to clients can also start providing currency and foreign exchange swaps without needing further approvals, the State Administration of Foreign Exchange said in a statement. (Reuters)

Dollar Climbs Further On Fed-Taper Updraft. The dollar rose broadly on Thursday, propelled by the Federal Reserve’s long-awaited decision to slow its monetary stimulus. The euro eased to $1.3657 from $1.3693 late Wednesday, and the British pound slipped to $1.6372 from $1.6398. The ICE dollar index , which compares the U.S. dollar with six other currencies, rose to 80.632 from 80.477 late Wednesday. The Australian dollar bought 88.57 U.S. cents, little changed from 88.58 U.S. cents late Wednesday. The dollar edged down to ¥104.19 from ¥104.30 late Wednesday, when the Fed decision sent the greenback surging above ¥104. (Market Watch)

Commodities

U.S. Oil Rises Sharply As Demand Increases, Shorts Cover. U.S. crude oil futures rose more than 1 % on Thursday spurred by refiners needing oil to meet robust distillate exports and as traders bought contracts to cover short positions. U.S. crude for January delivery, which expires at the end of the session on Thursday, broke through the 200-day moving average of $98.78 for the first time in a week, sailing past $98.75, a level at which many traders held positions. Brent crude was last trading 56 cents up to $110.19. U.S. crude oil's rise narrowed its discount to Brent. The spread between the two benchmarks widened to a high of $12.16 earlier in the session, before traders pushed it in by nearly $1 to a low of $10.73. (Reuters)

Gold Falls 1.8 Pct To 6-Month Low, Fed Decision Weighs. Gold slid nearly 2% on Thursday to its lowest since late June as the U.S. Federal Reserve took its first step in winding down the era of easy money that has helped drive bullion prices to record highs. Spot gold was down 1.8 % at $1,196.31 an ounce by 12:14 p.m. EST (1714 GMT), having earlier hit $1,193.60, its lowest since June 28. Among other precious metals, silver was down 2.7% to $19.19 an ounce. Platinum was down 1 % at $1,317.25 an ounce, while palladium eased 0.3 % to $693.25 an ounce. (Reuters)