I. Yesterday's News
1. The European Central Bank stuck to its super-easy monetary policy on Thursday, telling those calling for a tightening - like economic powerhouse Germany - to be patient as the bloc slowly regains its economic health. Pledging to look through an inflation blip fuelled by rising oil prices, ECB President Mario Draghi acknowledged a string of surprisingly strong growth indicators. But he argued that the outlook was still fraught with risk, requiring the bank to maintain its unprecedented stimulus.

2. U.S. homebuilding rebounded sharply in December as a firming economy boosts demand for rental housing, while an unexpected drop in the number of Americans filing for unemployment benefits to near a 43-year-low last week pointed to a further tightening in the labor market. Housing starts jumped 11.3 percent to a seasonally adjusted annual rate of 1.23 million units last month, the Commerce Department said. Economists polled by Reuters had forecast housing starts increasing to a 1.20 million-unit rate in December.

3. World oil markets are slowly tightening as demand rises while investors wait to see if production cuts agreed by OPEC and other producers will be implemented as promised, the International Energy Agency (IEA) said on Thursday. The agency said stronger oil consumption had led it to raise its estimate of global oil demand growth over the last year by 110,000 bpd to 1.5 million bpd, well above the average rate of growth seen in this century of 1.2 million bpd. This year the agency expects world oil demand growth of around 1.3 million bpd.

4.Japanese manufacturers' morale rose for a fifth straight month in January to a 2-1/2 year high and the service sector's mood jumped to its highest levels since mid-2015, a Reuters poll showed, thanks to a weak yen and buoyant share prices. The latest Reuters Tankan underscores growth prospects for the world's third largest economy, but uncertainty lies ahead after U.S. President-elect Donald Trump is inaugurated on Friday. In the poll, the sentiment index for manufacturers and service sector fell in the next three months. It was the highest reading since August 2014, but is expected to fall back to 16 in April.

II. Market Overview
FX
The dollar rose on Thursday against a basket of currencies even though it fell against the euro, as solid labor and housing data backed the case for strong U.S. economic growth. European Central Bank chief Mario Draghi pointed to sagging inflation and the need for further monetary policy assistance in Europe. The dollar rose to a nearly one-week high against the yen as investors laid bets on further dollar strength. The greenback moved to 115.29 yen, its highest since Jan. 13. It was last up 0.15 percent to 114.82 yen. The dollar rose 0.4 percent against the Canadian dollar to C$1.332. The dollar index, which tracks the greenback against the euro, yen, Canadian dollar and three other major currencies, was last up 0.25 percent at 101.170.

Precious Metals
Gold steadied on Thursday, giving up earlier losses as the dollar and U.S. bond yields pared gains. Spot gold turned up to $1,204.76 an ounce, having dropped by 1.1 percent in the previous session, its biggest fall since Dec. 15. U.S. gold futures settled down 0.9 percent at $1,201.50.

Commodities
1.Crude Oil
Oil prices edged higher on Thursday, but swelling U.S. crude stockpiles limited the rebound from a one-week low after the International Energy Agency said oil markets had been tightening even before cuts agreed by OPEC and other producers took effect. Brent crude ended the session at $54.16 per barrel, up 24 cents or 0.45 percent. U.S. crude settled 29 cents, or 0.57 percent, higher at $51.37 a barrel.

2. Base Metals
Aluminium retreated from a 20-month high on Thursday as investors booked profits and on expectations that its prolonged rally will be brought to a halt by increasing supply. Benchmark aluminium on the London Metal Exchange closed 0.5 percent lower at $1,826 a tonne, after it touched the May 2015 high of $1,835 in the previous session. Among other metals, copper fell 0.5 percent to $5,739 a tonne. Nickel fell 2.5 percent to $9,925. Tin fell 1.9 percent to $20,700 a tonne.

U.S. Treasuries
U.S. Treasury yields surged to two-week highs on Thursday after data showed solid economic growth, a day after Federal Reserve Chair Janet Yellen signaled further interest rate hikes are likely. Benchmark 10-year notes fell 23/32 in price to yield 2.47 percent, up from 2.39 percent late on Wednesday. The yields reached as high as 2.496 percent, the highest since Jan.

Stock Market
1. U.S. Equities
U.S. stocks fell on Thursday, continuing to pull back from the post-election rally, on investor caution ahead of Donald Trump's inauguration as president on Friday. The Dow fell for a fifth straight day, its longest losing streak since just before the Nov. 8 U.S. Election. The Dow Jones Industrial Average closed down 72.32 points, or 0.37 percent, to 19,732.4, the S&P 500 lost 8.2 points, or 0.4 percent, to 2,263.69 and the Nasdaq Composite dropped 15.57 points, or 0.28 percent, to 5,540.08.

2. Hong Kong Equities
Hong Kong stocks followed Asian markets lower on Thursday, with sentiment hurt by Federal Reserve Chair Janet Yellen's hints that the pace of U.S. interest rate hikes could accelerate. The benchmark Hang Seng index dropped 0.2 percent, to 23,049.96 points. while the Hong Kong China Enterprises Index lost 0.1 percent, to 9,792.37 points.