Asia stocks settle after Fed scare, eye yuan slide

Good Morning,

- Asia stocks settle after Fed scare, eye yuan slide…

- Asian markets found their footing on Friday after Wall Street shook off concerns about Federal Reserve policy, while this week's spike in U.S. yields kept the dollar underpinned near three-week highs. After falling sharply on Thursday, stocks in the region were trying to regain some of the losses. The Australian market edged up 0.5 percent .AXJO while MSCI's broadest index of Asia-Pacific shares outside Japan .

- Asia/Pacific Futures: Nikkei +1.203%; Hang Seng +0.161%; ASX +0.623%

-The dollar rose to a three-week high against other major currencies on Thursday after Federal Reserve Chair Janet Yellen surprised world markets by signaling that increases in U.S. interest rates were not as far away as most had thought. The U.S dollar index rose for a second straight day and added nearly 0.2 percent on Thursday to stand at 80.190, a level last touched on Feb. 27.

- Brent crude oil futures rose on Thursday as sanctions against Russia injected a new risk premium into the market and strong equities provided support, while U.S. crude fell ahead of the April contract's expiry. Gold prices were little changed on Thursday, helped by bargain hunting after the metal's sharp drop the previous day (Wednesday), on comments from Federal Reserve Chair Janet Yellen that suggested U.S. interest rates could rise sooner than expected.

- Jobless Claims in U.S. Held Last Week Near Four-Month Low. The number of Americans filing applications for unemployment benefits held last week near the lowest level in almost four months, a sign the labor market continues to strengthen. Jobless claims increased by 5,000 to 320,000 in the week ended March 15, a Labor Department report showed today in Washington. The median forecast of 51 economists surveyed by Bloomberg called for an increase to 322,000. The four-week average, a less volatile measure, fell to the lowest level since late November.

- Fitch revised Russia’s outlook to negative from stable and maintained the BBB rating at the moment, while it also cut the growth forecast for 2014 to just 1%. This may put additional pressure on USDRUB.

- Fitch Ratings has affirmed the United States of America's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'AAA' with Stable Outlooks. The ratings on senior unsecured foreign and local currency bonds have also been affirmed at 'AAA.

- “Old School Cold War Games”: Russia announces sanctions against US, including asset freezes and US visa bans.

- German Chancellor Angela Merkel said in a speech in parliament that EU leaders would signal their readiness to ramp up punitive measures against Russia, including politically sensitive economic sanctions, at a summit starting on Thursday. "The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase-3 measures if there is a worsening of the situation," Merkel said. She added that the Group of Eight format, which includes Russia, was effectively dead so long as the diplomatic showdown with Moscow continued.

- The 20-day % change correlation between $USDJPY and 10-year US Treasury Yield is 0.892, and with the $GBPJPY is 0.923.

- Let's see how the Chinese yuan closes out the week. Since last Thursday, up 1.5%..This is in fact, the biggest drop in the yuan since they devalued it 50% at the beginning of 1994.

-Citi Exists AUD/NZD Long, Enters AUD/USD Short.

- A speech from Minneapolis Fed President Narayana Kocherlakota is likely to take top billing. Mr Kocherlakota was the only member of the rate-setting FOMC committee to dissent from the Fed’s latest decision, saying the somewhat more ambiguous language in the central bank’s forward guidance framework “weakens the credibility of [it’s] commitment to return inflation to the 2 percent target [and] fosters policy uncertainty that hinders economic activity.”

- Watch movers for today: EZ Consumer Confidence, CAD CPI, CAD Retail Sales, USD Fed Kocherlakota speaks on Washington for Monetary policy.

Have a great weekend!