Euro hits new low on Italy worries as sterling drops

Japanese yen charts volatile course

1.2967 1.4986

90.88 0.9232

Orders for US durable goods excluding transportation increased 1.9%, the largest gain since December 2011, after increasing 1% in December also the non-defense capital goods orders excluding aircraft, jumped 6.3%, the biggest rise since December 2011.However, overall orders for durable goods dropped 5.2% in January, as demand for civilian and defense aircraft fell sharply. US unemployment claims Fewer Americans than forecasted filed for unemployment benefits last week, suggesting that companies are maintaining staffing. Initial Jobless claims for benefits dropped 22,000 to a seasonally adjusted 344,000.The high unemployment prompted the US central bank to launch an open-ended bond-buying program that it said it would keep up until it saw a substantial improvement in the outlook for the labor market.

US Fed chairman Bernanke testifies

Fed Chairman Ben Bernanke, testi- 1.3319 1.5222

94.77 0.9463 in February as Americans shrugged off earlier worries over fiscal cliff uncertainties and payroll cuts .The Conference Board, said its index of consumer attitudes rose to 69.6, from a downwardly revised 58.4 in January topping economists’ expectations for 61. Consumers were more optimistic about the short-term outlook.

Those expecting business conditions to improve over the next six months increased to 18.9 % from 15.6 % while consumers’ outlook for the labor market was more positive. Those anticipating more jobs in the months ahead improved to 16.7% from 14.4%.

US new & pending home sales improve significantly

Sales of new homes jumped to their highest level since July 2008 while the monthly supply of houses on the market was the smallest in 7-1/2 years, further evidence that the housing sector recovery is gaining momentum.

The Commerce Department said sales jumped 15.6% to an annual rate of 437,000 units. In another separate report, the National Association of Realtors said the pending home sales index increased 4.5% to its highest level since April 2010, just before the expiration of the homebuyer tax credit.

US Monthly Core Durable Orders 1.3022 1.5038

93.59 0.9429 1.2880 1.3315 1.4750 1.5320

90.90 95.60 0.9280 0.9610 fied before Congress last week, strongly defending the US central bank’s monetary stimulus, while easing financial markets worries over a possible retreat from the bond-buying program.

He referred to the pick-up in housing market as a sign that the US central bank’s easing of monetary policy is gaining traction. However, he signaled a willingness to press forward with efforts to encourage an even stronger recovery and lower the jobless rate, which remains at 7.9%.

Bernanke also said that the risk associated with the current bond-buying program such as unwanted inflation did not seem material at this moment adding that the central bank has all the tools it need to retreat from its monetary support in an orderly fashion.

In addition, the Federal Chairman cautioned Congress of the negative effects the sequestration would have on the economy.

Europe & U.K Italy’s borrowing costs rise after a stalemate election

Italy’s borrowing costs rose sharply at its latest auction last week. Indeed, the new 10-year government bonds sold at 4.83%, up from 4.17% at its last sale in January. In addition, the new 5year bonds sold at a yield of 3.59%, up from 2.94% in January. The higher borrowing costs were expected as yields rose after the parliamentary election revealed no clear winner in both houses. A split parliament would make it difficult for one group to push through their plans to revive Italy’s ailing economy. ECB President Draghi’s speaks President Draghi’s speech covered the policy and the role of the European Central Bank during the crisis on the Euro Area.

He focused on the role of the ECB to ensure price stability, as it is a foundation of functioning economy. He also said that preserving price stability today requires different actions than it did in the past , as it requires new tools to ensure that ECB’s monetary policy decisions are able to reach firms and households . GfK German consumer climate Germany’s consumers are getting more optimistic amid an improving economic outlook and they even plan to spend more money over the coming 1.3040 1.5050

93.20 0.9415 months. Consumer sentiment indicator rose to 5.9 going into March from 5.8 in February. The reading was the strongest since November and was in line with market forecasts. The GfK survey adds to the increasingly positive mood in Germany, where other surveys have shown morale among German businesses, investors and analysts improving in February. Spanish manufacturing PMI Spanish manufacturing contracted at its slowest rate since a 1-1/2 years, in a sign the country may be over the worst of its long industrial downturn. Spain’s Purchasing Managers’ Index for the manufacturing, which accounts for about 12% of Spain’s economy, rose to 46.8 in February from 46.1 in January.

United Kingdom manufacturing PMI

United Kingdom manufacturing unexpectedly dropped in February and new orders decreased. The Manufacturing Purchasing Managers’ Index fell to 47.9 from a downwardly revised 50.5 in January, marking the first reading since November below the 50 line that separates growth from contraction.

S&P downgrades outlook United Kingdom rating

Standard & Poor downgraded the United Kingdom’s triple a rating to negative, sighting that it had become concerned by the weak economic and fiscal performance of the country. This would be the third large credit rating agency that gives Britain a negative out look.

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Asian Markets Japans retail dales & household spending improve

Japanese retail sales fell 1.1% in January from a year earlier, less than a median market forecast for a 1.3% annual fall, but compared with the previous month, retail sales rose 2.3%. Japanese household spending on the other hand rose 2.4 % in January to beat market expectations of only a rise of 0.4%.

Japans monthly industrial production

Japan’s industrial production rose 1.0 % in January, up for the second straight month, in a sign that the economy is improving on the back of a weaker yen and a pick-up in global demand. The yen’s more than 20% fall against the dollar in the past six months is improving the outlook for Japanese exporters as Prime minster Abe calls for more monetary stimulus to end deflation.

Kuwait Kuwaiti Dinar at 0.28395 The USDKWD opened at 0.28395 on Sunday morning.