I. Yesterday's News
1. A preliminary survey from the University of Michigan showed on Friday that the U.S. consumer sentiment index rose from last month's 93.8 to 98 in December, at its highest since January 2015. The figure is also better than economists' forecast of 94.5. U.S. wholesale inventories decreased 0.4 percent in October, in line with market estimate.

2. The German central bank revised up its forecast for economic growth in 2016 and 2017. The Bundesbank said that it expects gross domestic product to rise 1.8 percent in both 2016 and 2017, citing the economy is "on a sound upward path" despite that labour market bottlenecks could constrain its expansion and pushing up payroll in the coming years. The bank slashed the inflation forecast for this year to 1.5 percent percent from 1.4 percent for the next year. The outlook for 2018 and 2019 is seen at 1.7 percent and 1.9 percent respectively.

3. Britain's trade deficit narrowed more than expected in October but the data for October was overshadowed by big upward revisions to the deficit due to misclassifying trade in gold, the Office for National Statistics said. The official figures also showed a fall in construction output which, along with the figure in the previous three months, in sharp contrast with the cheery picture of the economy. Friday's data showed the trade deficit in October narrowed to 1.971 billion pounds from 5.812 billion pounds in September, which figure was revised up from 5.2 billion pounds. The deficit in goods alone narrowed to 9.711 billion pounds in October from September's upwardly revised 13.832 billion pounds - a much bigger improvement than economists' forecasts in a Reuters poll for it to narrow to 11.8 billion pounds.

4. Russia's energy minister said on Friday he expected non-OPEC oil producers to fully contribute 00,000 barrels per day (bpd) of cuts agreed earlier with OPEC. Mexico will likely contribute to non-OPEC oil output cuts at a meeting with OPEC producers on Saturday, sources said, citing Mexico could contribute as much as 150,000 barrels per day to cuts, the second largest contribution among non-OPEC cuts after Russia. Saudi Arabia's energy minister Khalid al-Falih was "very optimistic" about a meeting between OPEC and non-OPEC producing countries in Vienna on Saturday, saying, "I am expecting about 10 to 11 countries to be on the final declaration with specific numbers."

5.Fitch Ratings affirmed the United Kingdom's long-term foreign and local currency issuer default ratings at 'AA', citing UK's ratings balance a high-income, diversified and advanced economy against comparatively high public sector indebtedness. Fitch Ratings has affirmed France's Long-Term foreign and local currency Issuer Default Ratings (IDR) at 'AA' with Stable Outlooks. The rating agency also affirmed Mexico's IDR at “BBB+” with a negative outlook.

II. Market Overview
FX
The euro dropped on Friday for a second consecutive day in a continued reaction to the European Central Bank's extending its bond-buying program three month longer than many had anticipated, even as the bank cut the size of the monthly purchases. The U.S. Federal Reserve is widely expected to raise interest rates for the first time this year when it meets next week, but it may take a cautious tone on the economy. Traders will focus on the Fed's economic projections. The euro dropped to $1.0528, its lowest level since Monday, and was last down 0.69 percent at $1.0541. The dollar gained 0.57 percent to 101.68 against a basket of six major currencies. Against the Japanese yen, the greenback rose as high as 115.36 yen, its highest level since Feb. 9, and was last up 1.16 percent at 115.30 yen.

Precious Metals
Gold edged lower to a 10-month low on Friday as the dollar and global equities rose, and was headed for a fifth straight weekly decline on expectations of a Federal Reserve rate hike next week. Spot gold had dropped 1 percent to $1,158.54 an ounce by 1948 GMT after hitting the lowest since early February at $1,156.05 when the benchmark 10-year Treasury note touched an intra-day high. February gold futures fell 0.9 percent to settle at $1,161.90 an ounce

Commodities
1.Crude Oil
Oil prices rose about 1 percent on Friday on hopes that non-OPEC producers meeting in Vienna over the weekend would agree to output restrictions following limits OPEC announced last week to curb an oil glut. U.S. crude's West Texas Intermediate (WTI) futures ended the session at $51.50 a barrel, up 66 cents or 1.30 percent. Brent crude closed up 44 cents, or 0.82 percent, at $54.33 per barrel. Both Brent and U.S crude futures, however, notched their first weekly loss in four weeks.

2. Base Metals
Copper ended the week higher on Friday after robust data from China offered more evidence the world's second biggest economy is recovering, even though moves by Chinese authorities to tame speculation made some cautious. Three-month copper on the London Metal Exchange ended up 0.7 percent at $5,825 a tonne, clocking a 1 percent gain for the week.

U.S. Treasuries
U.S. Treasury yields climbed on Friday with benchmark yields marking a fifth consecutive week of increases on stronger-than-forecast data on China inflation and U.S. consumer sentiment ahead of $56 billion in government debt supply next week. The benchmark 10-year Treasury note yield was last at 2.467 percent, up 8 basis points from Thursday and not far from a near 1-1/2 year peak set on Dec. 1. The yield on 30-year bonds touched 3.171 percent, its highest since July 2015 before edging down to 3.159 percent in late trading, up 7 basis points on the day.

Stock Market
1. U.S. Equities
Major U.S. stock indexes powered to another day of fresh record highs on Friday, with the S&P 500 ending the week up 3 percent, as investors bid up shares in sectors that have lagged in the month-long rally since Donald Trump's presidential election. The benchmark S&P 500 registered a record high for the third straight session, while the Dow and Nasdaq also hit new highs. The Dow recorded a fifth straight week of gains. The Dow Jones industrial average rose 142.04 points, or 0.72 percent, to 19,756.85, the S&P 500 gained 13.34 points, or 0.59 percent, to 2,259.53 and the Nasdaq Composite added 27.14 points, or 0.5 percent, to 5,444.50. S&P 500 closed up for the sixth day, and was up 10.5 percent for the year.

2. Hong Kong Equities
Hong Kong stocks snapped a three-day winning streak on Friday, with casino shares leading broad market losses following reports that Beijing would put additional limits on ATM cash withdrawals in the gambling haven of Macau. The benchmark Hang Seng index fell 0.4 percent, to 22,760.98 points, while the Hong Kong China Enterprises Index lost 0.3 percent, to 9,867.95 points.