Asia

Indonesia Central Bank Sees Smaller Account Deficit This Year. Bank Indonesia expects a narrower current account deficit this year on the back of a weak rupiah boosting exports and cutting imports. "We expect the deficit to be below 2.5% of gross domestic product (GDP) this year," said Endy Dwi Tjahjono, group head of balance of payment affairs at the central bank, in a discussion with media at its headquarters on Friday. The current account was short US$38.5 billion of the country's GDP in 2013, Bank Indonesia data showed on Friday. (Business Times)

Japan PM Keen To Cut Corporate Tax Rate. Prime Minister Shinzo Abe is determined to cut Japan's corporate tax rate, Chief Cabinet Secretary Yoshihide Suga said, a step experts say could boost the global competitiveness of Japanese companies and make the country more attractive to foreign investment. Suga, who serves as the government's top spokesman and is one of Abe's most trusted aides, also said Japan's participation in talks on a U.S.-led free trade pact, the Trans-Pacific Partnership, was a vital part of Abe's growth strategy, the "Third Arrow" in his "Abenomics" policy that also includes hyper-easy monetary policy and fiscal spending. "The prime minister has made a definite statement regarding a reduction in the corporate tax rate," Suga told Reuters in an interview. "We want to achieve this." (Reuters)

China's Consumer Inflation Holds Steady At 2.5%. China's inflation rate remained subdued in January, despite rising food prices during the New Year celebrations. Consumer prices held steady at 2.5% from a year earlier, which was slightly higher than many economists expected. The National Bureau of Statistics said there was a 3.7% rise in food prices during the month, which included both the Western and Chinese New Years. Meanwhile, factory gate prices fell 1.6%, marking the 23rd consecutive monthly decline. (BBC)

China’s Record New Credit Boosts Outlook For Economic Growth. Record new credit in China in January will help the economy to maintain momentum while underscoring challenges for officials trying to limit the risk of financial turbulence from defaults and bad loans. Aggregate financing, the broadest measure of credit, was 2.58 trillion yuan ($425 billion), the People’s Bank of China said in a Feb. 15 statement. New local-currency lending was 1.32 trillion yuan, the highest level since 2010. Trust loans, under scrutiny because of default risks, were about half the level of a year earlier. (Bloomberg)

USA

US, Japan Eye Gap Over Agriculture, Autos At Trade Talks. The United States and Japan will aim to find common ground on sticking points such as agriculture and autos at the next round of negotiations on a Pacific Rim trade pact, the U.S. Trade Representative said on Saturday after top-level talks. After meeting Japanese Economy Minister Akira Amari in Washington, U.S. Trade Representative Michael Froman said the two countries agreed to work towards a comprehensive agreement at Trans-Pacific Partnership talks scheduled for next week in Singapore. (Reuters)

Michigan Consumer Sentiment Index Unchanged In February. Consumer confidence in the U.S. was stronger than projected in February as Americans grew more upbeat about the economy. The Thomson Reuters/University of Michigan preliminary index of sentiment held at 81.2 this month. The median estimate in a Bloomberg survey of economists called for a decline to 80.2. A gauge of the economic outlook improved to the highest level in six months. The reading indicates consumers may pick up the pace of spending after a winter-related slowdown in January. Higher stock prices and home values are helping bolster household finances, underpinning sentiment at a time when the labor market is struggling to improve. (Bloomberg)

US January Import Prices Rise Slightly As Inflation Stays Dormant. Prices on U.S. imported goods rose by slightly more than expected in January, data showed on Friday, yet underscoring how inflationary pressures remain largely dormant. The Labor Department reported that import prices ticked up by 0.1 % last month, the third consecutive month of gains. Economists in a consensus survey expected January import prices to fall by 0.2 %, against the prior month's unchanged reading. Prices on petroleum items dropped by 1.2 %, while nonpetroleum goods rose by 0.4 %. (CNBC)

Factory Production In U.S. Falls By Most Since 2009. Factory production in the U.S. unexpectedly declined in January by the most since May 2009, adding to evidence severe winter weather weighed on the economy. The 0.8 % decrease at manufacturers followed a revised 0.3 % gain the prior month that was weaker than initially reported, figures from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.1 % advance. Total industrial production dropped 0.3 % even as utility output climbed the most in almost a year. (Bloomberg)

Europe

Euro-Area Growth Eases Pressure On Draghi For Stimulus. The euro-area economy expanded more than forecast in the final quarter of 2013, led by Germany and France, easing pressure on the European Central Bank to take action next month to counter low inflation and spur growth. Gross domestic product in the euro zone rose 0.3 % after a 0.1 % increase in the third quarter, the European Union’s statistics office in Luxembourg said today. That beats the median forecast of 0.2% in a Bloomberg News survey of 41 economists. For the full year 2013, GDP fell 0.4 %. (Bloomberg)

Italy’s Credit-Rating Outlook Raised to Stable by Moody’s. Italy’s credit rating outlook was raised to stable from negative by Moody’s Investors Service, which cited the government’s financial strength and reduction of risks from contingent liabilities. Moody’s also affirmed Italy’s Baa2 and Prime-2 debt ratings, saying in a statement it expects a leveling-off of the nation’s debt-to-gross domestic product ratio this year. The risk from liabilities are reduced by the potential recapitalization needs of Italian banks, loans by the European Financial Stability Facility and the European Stability Mechanism, Moody’s said. (Bloomberg)

Currencies

Dollar Falls Against Yen, Pound After Data. The dollar lost ground against most major rivals on Friday amid mixed U.S. data on industrial production and consumer sentiment. Chinese inflation data boosted the Aussie and the euro advanced amid a report showing the euro-zone economic recovery picked up speed. After Friday’s data, the ICE dollar index , a gauge of the U.S. unit’s strength against six other currencies, dropped to 80.13, from 80.31 late Thursday. It is down roughly 0.6% on the week. The British pound jumped versus the dollar to $1.6748 from $1.6660. Against the Japanese yen, the dollar declined to ¥101.81, from ¥102.27 late Thursday. Meanwhile, the euro edged up to $1.3698, from $1.3677 late Thursday, as investors digested a report showing the euro zone is slowly finding its footing. The Australian dollar jumped to 90.36 U.S. cents, from 89.85 U.S. cents late Thursday. (MarketWatch)

Commodities

Brent Rises On Tight Supply; Heating Oil Gains. Brent oil futures rose in late session trading on Friday, boosted by demand for heating oil ahead of more winter cold and snow in the U.S. Northeast as well as supply disruptions in producers Libya and Angola. U.S. crude settled 5 cents lower at $100.30 a barrel, though it ended higher on the week for the fifth week in a row. Brent crude settled 56 cents higher at $109.08 a barrel. Brent's premium to U.S. crude, which narrowed to the tightest point since October about two weeks ago, widened by 57 cents to $8.95 on Friday. (Reuters)

Gold Races Above $1,300, Posts Biggest Weekly Gain In 6 Months. Gold rose to a three-month high above $1,300 an ounce on Friday, gaining 1 % and notching its biggest weekly gain in six months, as weak U.S. manufacturing output pressured the dollar and lifted bullion's currency-hedge appeal. Spot gold was up 1.2 % at $1,317.90 an ounce by 2:06 p.m. EST (1906 GMT), after rising to its highest since Nov. 7 at $1,320.90. It was up around 4 % for the week, the largest such gain since mid-August. Silver climbed to its highest since November at $21.42 an ounce earlier and posted its second straight weekly gain. It was up 4.3 % for the day at $21.32. Platinum gained 0.8 % to $1,423.50 an ounce, while palladium climbed 0.6 % to $733.25 an ounce. (Reuters)