Global

'Cautious Optimism' On Global Economy. The leaders of the world economy expressed cautious optimism over the prospects for the global economy this year as the Davos forum wrapped up on Saturday. Speaking on a panel of ministers, central bankers and top business leaders at the World Economic Forum, the governor of the Bank of Japan Haruhiko Kuroda said: "We have to be mindful of downside risks, but I think we can be cautiously optimistic about the global economic outlook." The United States economy is slated to grow faster than three % this year and next year, he said, while Europe is "finally recovering". "Emerging economies like India as well as China, Indonesia and others' economic growth rate is likely to be maintained at a high level or likely to accelerate," forecast the central banker. (AFP)

Central Banks Phase Out Dollar Liquidity Tenders As Crisis Eases. The European Central Bank and global peers will wind down emergency dollar liquidity facilities that have helped lenders weather financial turbulence since 2007. “In view of the considerable improvement in U.S. dollar funding conditions and the low demand for U.S. dollar liquidity providing operations,” the ECB, the Bank of England, the Bank of Japan and the Swiss National Bank jointly decided to reduce the offering of dollar loans to banks, the Frankfurt-based ECB said in a statement today. The ECB will cease to conduct three-month U.S. dollar liquidity operations as of April this year, and will conduct one-week U.S. dollar tenders at least until July 31. It will assess the need for further one-week dollar operations after July. (Bloomberg)

Asia

Singapore Quarterly Home Price Has First Drop In Two Years. Singapore’s fourth-quarter home prices slid for the first time in almost two years, trimming annual gains to the smallest since 2008 as mortgage curbs cooled prices in the Southeast Asian city. The private residential property price index fell 0.9 % in the three months ended December, more than the 0.8 % drop based on preliminary data announced on Jan. 2. The decline in suburban housing values was 1 %, more than the 0.6 % slide in the earlier report, according to a government statement today. (Bloomberg)

North America

Treasuries Winning Streak Longest Since April On Refuge Demand. US Treasuries gained for the longest stretch since April as emerging-markets losses and signs of slower U.S. economic growth led investors to seek safe assets. The benchmark 10-year yield reached the lowest level since November as a gauge of Chinese manufacturing showed contraction, Argentina’s peso plunged the most since 2002 and Turkey’s lira fell to a record. Short-term bill rates rose, with four-week rates reaching the most since October, on concern a U.S. debt-ceiling impasse next month may damp demand. The Federal Reserve meets next week, while the Treasury will offer floating-rate two-year securities in an inaugural sale. The U.S. 10-year yield fell six basis points, or 0.06 percentage point, to 2.72 percent as of 5:07 p.m. New York time, after sliding to 2.70 percent, the lowest since Nov. 26, according to Bloomberg Bond Trader prices. (Bloomberg)

Canada Inflation Less Than Forecast To 1.2% In December. Canada’s December inflation rate accelerated less than economists forecast, leaving it near the bottom of the central bank’s target band and reinforcing policy-maker warnings that price gains will be sluggish. The consumer price index rose 1.2 % in December from a year earlier following November’s 0.9 % pace, Statistics Canada said today from Ottawa. The core rate, which excludes eight volatile products, climbed an annual 1.3 % after a gain of 1.1 % in the prior month. Economists surveyed by Bloomberg forecast that both rates would advance by 1.3 %. (Bloomberg)

Europe

Davos 2014: Eurozone Inflation 'Way Below Target'. The head of the International Monetary Fund (IMF) has warned that deflation remains a real risk to economic recovery in the eurozone. Despite signs of recovery across the world, Christine Lagarde said that potential risks must not be ignored. One of these was the fact that eurozone inflation, at 0.8%, remained "way below" the 2% target set by the European Central Bank (ECB). Ms Lagarde told a Davos debate on the global economic outlook, that - despite signs of recovery everywhere, there were "old risks" and "new risks”. New risks were, how emerging economies responded to the winding down of economic stimulus measures in the US, and the problems facing economies whose inflation rate remained stubbornly below target. (BBC)

Currencies

Argentina To Ease Foreign Exchange Controls After Peso Slump. Argentina is to relax its strict foreign exchange controls, a day after the peso suffered its steepest daily decline in 12 years. Cabinet chief Jorge Capitanich said the country would reduce the tax rate on dollar purchases and allow the purchase of dollars for savings accounts. The measures would take effect from Monday, he said. On Thursday, the peso fell 11% against the dollar, its steepest fall since the country's 2002 financial crisis. The central bank had been acting to support the waning currency amid a loss of investor confidence in the country. But the bank abandoned this policy on Thursday, sparking the peso's fall. Despite efforts to support the economy, inflation has soared and many analysts expect it to reach about 30% this year. (BBC)

Emerging-Market Currencies Fall Further. Emerging-market currencies such as the Turkish lira and South African rand fell further against the dollar Friday, as worries about a Chinese slowdown and prospects of rising U.S. rates triggered a broad flight out of emerging-markets assets. The dollar slid to ¥102.24 from ¥103.10 late Thursday. That’s the lowest level since early December, according to FactSet data. The ICE dollar Index, a measure of the U.S. unit against six other major currencies, was at 80.457 versus 80.442 late Thursday in North America. The euro weakened to $1.3676 from $1.3691 late Thursday. The British pound eased to $1.6501 from $1.6635, after breaking above the $1.66 level for the first time since May 2011. The euro gained 1% against the dollar for the week, while the pound was up 0.5%.For the week, the dollar index lost 0.9%.The Australian dollar couldn’t shake off its 1.1% fall on Thursday, declining further to 87.03 U.S. cents from 87.64 U.S. cents. (MarketWatch)

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. U.S. oil's discount to Brent narrowed by more than $1.50 to hit $9.98 per barrel. The spread broke the 100-day moving average of $10.48 for the first time in three-and-a-half months and contracted to its tightest point since early November. 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 5th Weekly Gain On Emerging Market Jitters. Gold rose to a two-month high on Friday, posting its fifth consecutive weekly gain as a global flight from emerging-market assets and declines in equities increased bullion's safehaven appeal. Spot gold inched up 56 cents at $1,264.51 an ounce by 2:29 p.m. EST (1929 GMT), having earlier hit $1,272.70, its highest since mid-November. Among other precious metals, platinum fell 1.9 % to $1,423.99 an ounce as traders bet that strikes in South Africa's platinum mining sector would be less damaging than feared. Silver fell 1 % to $19.79 an ounce, taking a lead from gold, while palladium was down 1.5 % at $731 an ounce. (Reuters)