Global

· IMF Sets June Deadline For Progress On Governance Reforms. The IMF set a June deadline for making progress on reforms that would give emerging countries more say in how the world lender is run, an attempt to break a standoff created by U.S. failure to ratify the changes. The board of the International Monetary Fund said Wednesday the institution’s 188 member countries should agree on steps that could make “meaningful progress” toward the reforms by June 30, without providing details. Finance chiefs around the world had previously given the United States until Jan. 1 to act and threatened to move without it if it failed to do so. The reforms would double the fund's resources and give more say to emerging markets like China and Brazil. The changes would also revamp the IMF's board to reduce the dominance of Western Europe. (Reuters)

Asia

· Japan Retail Sales Rise For Six Straight Month In Sign Of Recovery. Japan's retail sales rose for a sixth straight month in December, providing evidence of a gradual recovery in private consumption as the economy climbs out of recession. The 0.2% year-on-year sales growth fell short of a 0.9% gain seen by economists in a Reuters poll, following a revised 0.5% rise in November, data by the Ministry of Economy, Trade and Industry (METI) showed on Thursday. (Reuters)

· China January Official PMI Seen Lifting Off 1-1/2-Year Low. China's factory growth likely inched up from a 1-1/2-year low in January, helped by a slight pick-up in momentum the previous month, but the bounce is not expected to last due to unsteady exports and slowing investment, a Reuters poll showed. The official manufacturing Purchasing Managers' Index, or PMI, is forecast to inch up to 50.2 from December's 50.1, according to the median forecast of 11 economists in the poll. A reading above 50-point level indicates an expansion in activity while one below that points to a contraction on a monthly basis. (Reuters)

· China Overtakes U.S. As World's Top Investment Magnet: U.N. China overtook the flagging United States to become the top destination for foreign direct investment (FDI) last year, according to the United Nations economic thinktank UNCTAD. The United States has long been the world leader in attracting FDI, traditionally made up mainly of cross-border mergers and acquisitions and new corporate projects overseas, but last year its net inflows fell by two-thirds to $86 billion, preliminary data published on Thursday shows. Meanwhile China's share of global FDI has been creeping up, reaching $128 billion last year. Globally, FDI flows fell by 8% last year to $1.26 trillion, the second lowest level since the start of the financial crisis. (Reuters)

· China To Expand Some Shanghai Free Trade Zone Practices Nationwide. China will replicate some practices in Shanghai's free trade zone to other parts of the country, the cabinet said, in its latest push to let markets play a bigger role in the economy. The expansion of practices include yuan, or renminbi, settlements under the current account for individuals and more freedom for foreign-funded firms to retain their foreign exchange capital without converting into yuan. The cabinet also called for the opening of the services sector based on Shanghai's experience, including allowing financial leasing firms to expand businesses and establishing firms to investigate foreign credit. (Reuters)

· Philippine Growth Rises For Best Three Years Since Mid-1950s. Philippine economic growth accelerated last quarter as government spending and manufacturing output rose, capping the best three years of expansion since the mid-1950s. Stocks rose to a record. Gross domestic product increased 6.9% in the three months through December from a year earlier, the Philippine Statistics Authority said in Manila Thursday, after a 5.3% gain in the previous quarter. That beat all estimates in a Bloomberg News survey of 19 economists, where the median was 6%. (Bloomberg)

USA

· Yellen Tells Senators No Rate Rise Soon Amid Concerns Abroad. Federal Reserve Chair Janet Yellen told Senate Democrats she’s encouraged by the national economy even as she expressed some concern about the pace of hiring in the U.S. and the weakening global outlook. “Her message is that the economy’s getting better but there’s still a ways to go in terms of job creation,” New York Senator Charles Schumer said today in an interview on Capitol Hill. “That worry seems, in her mind, to be paramount and that’s why she is not going to raise rates immediately.” (Bloomberg)

· U.S. Jobless Claims Drop Sharply To Near 15-Year Low. The number of Americans filing new claims for unemployment benefits tumbled last week to its lowest level in nearly 15 years, adding to bullish signals on the labor market. Though the decline probably exaggerates the jobs market's strength given a holiday-shortened week, Thursday's report suggested the economy was fairly healthy and weathering weakening global growth. Initial claims for state unemployment benefits dropped 43,000 to a seasonally adjusted 265,000 for the week ended Jan. 24, the lowest since April 2000, the Labor Department said. It was the biggest weekly decline since November 2012. The drop exceeded economists' expectations for a fall to only 300,000, but last week also included the Martin Luther King holiday, which means fewer claims were likely processed. (Reuters)

· U.S. Homeownership Rate Falls To A 20-Year Low. The U.S. homeownership rate fell to the lowest in more than two decades in the fourth quarter as many would-be buyers stayed on the sidelines, giving the rental market a boost. The share of Americans who own their homes was 64% in the fourth quarter, down from 64.4% in the previous three months, the Census Bureau said in a report. The rate was at the lowest since the second quarter of 1994, data compiled by Bloomberg show. (Bloomberg)

· Pending Sales Of Existing Homes In U.S. Drop By Most In A Year. Contracts to purchase previously owned U.S. homes unexpectedly fell in December by the most in a year, a sign the industry’s recovery remains uneven. The index of pending sales dropped 3.7% after a 0.6% gain the prior month that was smaller than initially estimated, figures from the National Association of Realtors showed Thursday in Washington. The median forecast of 42 economists surveyed by Bloomberg called a 0.5% increase. (Bloomberg)

Europe

· German Inflation Rate Is Negative For First Time Since 2009. Germany’s inflation rate turned negative in January for the first time in more than five years, aggravating a slump in consumer prices in the euro area. Prices in Europe’s largest economy fell 0.5% from a year earlier, the Federal Statistics Office in Wiesbaden said today. That’s the lowest rate since September 2009. Economists predicted a drop of 0.2%. (Bloomberg)

· UK Retail Sales Growth Slows Less Than Expected In January. British retail sales growth slowed by less than expected in January, helped by the biggest rise in clothing sales in almost two years, an industry survey showed on Thursday. The Confederation of British Industry's distributive trades survey's retail sales balance fell to +39 from December's 27-year high of +61 that was fueled by a "Black Friday" shopping frenzy. Economists polled by Reuters had expected a steeper slowdown this month to +30. (Reuters)

· Denmark Cuts Deposit Rate For Third Time In 10 Days To Defend Currency Peg. Even after delivering its third rate cut in 10 days, Denmark probably hasn’t done enough to fight back investors eager to hold krone-denominated assets. The bank says it has the scope to cut rates again and sell more kroner. “Those instruments remain in the toolbox to be used,” Karsten Biltoft, head of communications, said by phone. Denmark cut its deposit rate by 15 basis points yesterday to minus 0.5%, the lowest in the country’s history. The bank, which doesn’t hold scheduled meetings, said it took the step after selling kroner in the market. Handelsbanken estimates it may have sold as much as 100 billion kroner ($15.3 billion) in January to weaken the currency in response to the sudden capital influx that followed the Swiss National Bank’s decision to abandon its franc cap against the euro on Jan. 15. (Bloomberg)

Currencies

· Euro Shrugs Off German Deflation, Rises Versus Buck. The euro recovered from hefty losses incurred Wednesday, which followed the Federal Reserve’s afternoon monetary policy statement. The euro traded at $1.1320, compared with $1.1286 late Wednesday. The shared currency also traded higher against the pound and the yen. The dollar traded at ¥118.34, compared with ¥ 117.46 late Wednesday in New York, after the market decided that a remark by Japan’s Chief Cabinet Secretary Yoshihide Suga left the door open for more easing. The aussie traded at 77.66 cents, compared with 78.96 cents Wednesday. The ICE U.S. Dollar Index, a measure of the dollar’s strength against a basket of six tradeweighted rival currencies, was up 0.3% to 94.74. The euro inched lower against the Danish krone after the Danish National Bank cut its deposit rate to negative 0.5%, its third cut in two weeks. The euro traded at 7.44 krone, compared with 7.45 krone Wednesday. One dollar was worth 68.83 rubles, compared to 67.41 rubles Wednesday. (Market Watch)

Commodities

· Oil Rises On Short Covering But Supply Worries Loom. Global oil prices firmed slightly on Thursday but not before U.S. crude hit a near six-year low and benchmark Brent pared gains on data showing fresh additions to already record-high U.S. oil inventories. U.S. crude settled up 8 cents at $44.53 a barrel, recovering from its session low of $43.58. Benchmark Brent crude finished up 66 cents at $49.13 a barrel, off its session high of $49.24. (Reuters)

· Gold Falls More Than 2 Pct To Two-Week Low On Fed Outlook. Gold prices tumbled more than 2% to a two-week low on Thursday, while silver saw its biggest decline in 1-1/2 years after the Federal Reserve signaled it was still on track to lift U.S. interest rates this year. Spot gold fell to a two-week low of $1,251.86 an ounce and was down 2.1% at $1,257.01 at 2:20 p.m. EST (1920 GMT). Spot silver dropped 6.4% to $16.81 an ounce, falling below the 100-day moving average and marking its biggest one-day decline since June 2013. Palladium fell 3% to $768.50 an ounce and platinum was down 3% at $1,215.97 an ounce, its weakest performance since October 2014. (Reuters)