Asia

China Manufacturing Index Signals Surprise Contraction. China’s manufacturing may contract for the first time in six months, adding to stresses in the world’s second-biggest economy, according to a gauge released by HSBC Holdings Plc and Markit Economics. The preliminary reading of 49.6 for January in a Purchasing Managers’ Index (SHCOMP)released today was below a final figure of 50.5 in December and all 19 estimates of analysts in a Bloomberg News survey. A number above 50 indicates expansion. (Bloomberg)

South Korea’s Fourth-Quarter Expansion Matches Estimates. South Korea’s economic growth matched analysts’ estimates in the fourth quarter, as the central bank kept the benchmark interest rate at the lowest level since 2010. Gross domestic product gained 0.9 % from the previous quarter, when the increase was 1.1 %, the Bank of Korea said today in a statement in Seoul. That matched the median 0.9 % estimate of 12 economists surveyed by Bloomberg News. From a year earlier, growth was 3.9 %. (Bloomberg)

USA

Jobless Claims In U.S. Hover Near Lowest In Over A Month. Applications for U.S. unemployment benefits held near a six-week low, showing firings remain muted following the holidays. Jobless claims rose by 1,000 to 326,000 in the period ended Jan. 18, Labor Department data showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg projected 330,000. Applications for one state and the District of Columbia were estimated and there were no other unusual circumstances, a Labor Department spokesman said as the data were released. (Bloomberg)

Sales Climb As U.S. Housing Market Adjusts To Rates. Sales of previously owned homes climbed in December for the first time in five months, capping the best year since 2006 and indicating the real-estate market is starting to adjust to higher borrowing costs. Purchases rose 1 % to a 4.87 million annual pace, the National Association of Realtors reported today in Washington. Other reports showed claims for jobless benefits held last week near the lowest level in more than a month and the index of leading indicators climbed in December. (Bloomberg)

U.S. Home Prices Rose 0.1% In November As Recovery Slows. U.S. house prices climbed 0.1 % in November from October, the smallest monthly gain in almost two years, indicating the real estate recovery may be losing strength, the Federal Housing Finance Agency said. The seasonally adjusted increase fell short of the 0.4 % average estimate of 11 economists, data compiled by Bloomberg show. Prices rose 7.6 % from a year earlier, the FHFA said today in a report from Washington. The increase in U.S. home prices, which has been fueled by tight inventory and improving employment, is poised to slow as real estate becomes less affordable. (Bloomberg)

Consumer Confidence In U.S. Held Last Week At One-Month Low. Consumer confidence was little changed last week at a one-month low as Americans confronted having to pay holiday bills. The Bloomberg Consumer Comfort Index held at minus 31 for the period ended Jan. 19. A drop in the buying-climate gauge that sent it to a two-month low was offset by rebounding attitudes on the current state of the economy. An improving job market has yet to trigger the bigger gains in wages that will help sustain consumer spending after what may prove to have been its strongest quarter in three years. Stocks hovering close to record highs and rising home values are also helping buoy those at the upper end of the income scale. (Bloomberg)

Europe

Euro-Area Consumer Confidence Improves More Than Forecast. Euro-area consumer confidence increased more than economists forecast in January, adding to signs that the currency bloc’s recovery is gathering momentum. An index of household confidence in the euro area rose to minus 11.7 from minus 13.5 in December, the European Commission in Brussels said in a preliminary report today. That exceeds the median forecast of minus 13 in a Bloomberg News survey of 27 economists. (Bloomberg)

Euro Zone Business Gets Off To Strong Start For 2014. The euro zone's private sector started 2014 in much better shape than expected, with stronger growth across the region marred only by a continued downturn in France, surveys showed on Thursday. Markit's Flash Eurozone Composite Purchasing Managers' Index (PMI), which gauges business activity across thousands of companies and is seen as a good guide to economic health, jumped to 53.2 in January from 52.1 last month. That was well above the 50 mark that denotes growth and was its highest reading since mid-2011, beating all forecasts in a Reuters poll of 25 economists. (Reuters)

Currencies

Dollar Falls Below ¥104 As Investors Eschew Risk. The U.S. dollar tumbled below 104 Japanese yen Thursday as stocks sold off and Treasurys gained. The dollar dropped 1.2% to ¥103.18 from ¥104.48 Wednesday. The ICE Dollar Index , a measure of the U.S. unit against six other major currencies, dropped to 80.442 from 81.185 late Wednesday in North America. The euro jumped to $1.3691 from $1.3548 late Wednesday, and the British pound rose to $1.6633 from $1.6576. Meanwhile, the dollar rose to 1.1098 Canadian dollars from late Wednesday’s C$1.1085, and well above the C$1.0977 reached on Tuesday. The Australian dollar saw a sizeable drop after the Chinese manufacturing data, falling to 87.64 U.S. cents from 88.52 U.S. cents the previous day. (Market Watch)

Commodities

U.S. Crude Oil Rises; Discount To Brent Hits 2-Month Low. U.S. crude oil futures rose Thursday, narrowing the discount to European Brent to the lowest level in two months, due to a larger-than-expected draw in distillate stocks caused by sustained cold. Brent lost 69 cents to settle at $107.58 a barrel, down from Wednesday when it settled at its highest level of the year - $1.54 higher at $108.27. U.S. oil settled 59 cents higher at $97.32, its highest settlement price since New Year's Day. U.S. crude is on track to hit its largest weekly %age gain in over two months. (Reuters)

Gold Posts Biggest Gain In 3 Months As U.S. Equities Slide. Gold surged more than 2% on Thursday, notching its biggest one-day rally in three months, as sharp losses in U.S. equities and disappointing Chinese manufacturing data lifted bullion's safe-haven appeal. Spot gold was up 2.3 % at $1,264.20 an ounce by 2:03 p.m. EST (1903 GMT). Among other precious metals, silver rose 1.6 %, in line with gold's rally, to $20.04 an ounce. Platinum was up 0.2 % to $1,455.49 per ounce, while palladium fell 0.2 % to $741.97 per ounce. (Reuters)