Bank Of America Warns 'The US Dollar Is In Trouble'

Good Morning,

- Asia stocks up and dollar slips. GBP/USD above 1.68 level for first time since November 2009.

- Japan's Nikkei 0.56%, Hong Kong's Hang Seng 1.07%, Korea's Kospi 0.31%, Australia's ASX 200 0.52% and China's Shanghai 0.92%.

- Italy imposes 20% Tax withholding on all inbound money transfers.

- ECB Coeure: The European Central Bank is ready to take "decisive action if required" should inflation risk becoming entrenched below the ECB's target of just under 2 percent.

- Moody's Investors Service has changed the outlook on Italy's Baa2 government bond rating to stable from negative.

- Moody's: Japan shrinking current-account surplus is credit negative.

- Bank Of America Warns "The US Dollar Is In Trouble". Global financial and commodity markets are warning that the US Dollar is in for a bout of trouble, warns BofA Macneil Curry. Across asset classes, Curry points out that Gold was the first to make its low against the US Dollar, doing so back on Dec-15.
The second market to turn against the US Dollar was US Treasuries, with Ten year note futures turning bullish back on Dec-26. Currently, the FX market - most specifically GBP - is breaking out and pressuring the US Dollar. Finally, the Japanese stock market continues to suffer, putting downward pressure on USDJPY and thus US Dollar weakness.

- David Cameron's plans for a referendum on Britain's membership of the European Union are "bad" for the economy and could hamper investment, the governor of the Bank of England has warned. Mark Carney said that the prospect of a referendum will create "uncertainty" for businesses and mean that they "hold off" on investment. He compared the referendum, which is due to be held in 2017, to the near collapse of the banks and the financial crisis in the Eurozone.

- Japan's economy grew 0.3 percent in October-December from the previous quarter, posting the fourth straight quarter of expansion, reflecting firm private consumption and a pickup in capital spending.

- China's policymakers have been making moves to cool off its debt-fueled economy. Economists believe growth will slow to around 7.4% in 2014 from 7.7% in 2013. Societe Generale's Wei Yao sees 6.9% growth in her base case scenario. But she warns that there is a risk that China's transition could prove disorderly, causing the economy to slow much more than anyone expects.

- Some good news on China as data showed banks there disbursed the highest volume of loans in any month in four years in January, a surge that suggests the world's second-biggest economy may not be cooling as much as some fear.

- The New Zealand dollar is set to move past parity against the Australian dollar in 2014 for the first time in 40 years, economists at HSBC say. Paul Bloxham, chief economist for Australia and New Zealand at HSBC, told CNBC's Asia Squawk Box on Monday the New Zealand dollar – or kiwi as it is known – could surge over 8 percent against the Australian dollar this year, as its central bank aggressively hikes interest rates. "We think it's [the kiwi] going to appreciate and it could actually get past 86-87 cents [against the U.S. dollar], and perhaps even past Aussie dollar parity for the first time in 40 years,"

- Several once-embattled Asian currencies all gained ground as sentiment improved and dealers reported an influx of funds to many emerging markets. The Indonesian rupiah did especially well with the dollar down 4 percent in as many days. The lower dollar in turn tends to be positive for commodities priced in that currency, helping spur gold to a fresh three-month peak at $1,329.55.

Have a nice Week !