Dollar back in the game as geopolitical tensions heat up

The U.S. dollar held near two-week highs against a basket of major currenciesearly on Thursday, after rallying overnight even as U.S. Treasury yields fell further.

Traders said the move was a bit of a puzzle but pointed to heightened tensions in Ukraine and an unexpectedly upbeat report on U.S. new home sales as supporting the greenback. 

The dollar index .DXY climbed 0.4 percent, its biggest one-day rise in about a month, to as high as 80.524. It has since retreated slightly to 80.415.

The greenback drifted up to 102.40 yen, but remained well within its previous session's range of 102.01/102.63, while the euro traded at $1.3683, near a two-week trough of $1.3661 plumbed overnight.

Underpinning the dollar, emerging market currencies came under renewed pressure led by a fall in Ukraine's hryvnia after the central bank abandoned a managed exchange rate policy in favor of a flexible currency.

But Barclays Capital analyst, Eldar Vakhitov, viewed that as a positive move.

"We see the abandonment of the peg as positive news because allowing for greater exchange rate flexibility has been one of the requirements outlined by the IMF," Vakhitov wrote in a note to clients.

Source: Reuters

Asian shares soft as Ukraine dampens risk sentiment

Asian shares struggled to find a solid footing on Thursday as escalating tensions in Ukraine sent investors scurrying to the safety of the dollar and U.S. Treasuries.

Japanese stocks skidded, with the Nikkei .N225 slipping 0.1 percent while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS were almost flat after initial losses.

Wall Street's failure to extend its rally above historical highs on Wednesday did not help soothe the anxiety that a wider conflagration in Ukraine could lead to more risk aversion and damage vulnerable emerging markets.

Russian President Vladimir Putin ordered drills by his armed forces to test combat readiness in western Russia, near the border with Ukraine, prompting Washington to warn a military intervention would be a "grave mistake.

The Russian rouble tumbled to a five-year low against the dollar and all time-lows against the euro.

The Ukrainian hryvnia hit record lows on Wednesday after Ukraine's central bank said it was abandoning a managed exchange rate policy.

Safe-haven U.S. Treasuries benefited from the somber mood in markets, with the 10-year U.S. debt yield falling to a three-week low of 2.662 percent, despite surprise strength in U.S. new home sales data.

he euro traded at $1.3681, after having fallen 0.4 percent to two-week lows on Wednesday. Against the yen, which also tends to rise when markets are under stress, the dollar was little changed at 102.37 yen.

The tense backdrop could put renewed pressure on many emerging market currenciesand shares, which were battered earlier this year on concerns about slower global growth and the tapering of the U.S. Federal Reserve's monetary stimulus.

One of the hardest hit countries, Turkey saw its lira slipping to three-week lows, dented also by a corruption scandal embroiling Prime Minister Tayyip Erdogan's government.

Brazil's central bank raised its benchmark interest rate on Wednesday to 10.75 percent from 10.50 percent as expected, slowing the pace of monetary tightening to avoid hurting an economy that is flirting with recession.

The Chinese yuan rebounded from a seven-month low hit on Wednesday, though it traded below the daily fixing set by Beijing for a third consecutive day.

The renminbi stood at 6.1231 per dollar, off Wednesday's low of 6.1351 but below the fixing at 6.1224.

Traders suspect the People's Bank of China (PBOC) is possibly aiming to inject more two-way volatility into the market and prepare it for more reforms.

"It's possible that the Chinese authorities think they need a weaker yuan now to bolster the economy," said Hirokazu Yuihama, senior strategist at Daiwa Securities.

The CSI300 .CSI300 of the biggest Shanghai and Shenzhen A-share listings rebounded slightly on Thursday after having slipped to eight-month low on Wednesday on concerns over slowdown as well as fear of lending curbs.

Copper dropped to a three-month low of $7,002.50 a metric ton, extending its losses over the past week on concerns about slower growth in China.

Gold also stepped back after hitting a four-month high on Wednesday as the dollar strengthened broadly. It last stood at $1,325.90 an ounce, off Wednesday's high of $1,345.35.

Source: Reuters

S&P 500 ends near flat; retailers fly for a second day

Stocks finished flat on Wednesday with investors hesitant to make a big move on the day before comments from Federal Reserve Chair Janet Yellen, though retailers' shares rallied on results for a second day.

Target Corp (TGT.N) and Lowe's Cos Inc (LOW.N) shares jumped following upbeat earnings and gave the biggest boosts to the S&P 500. An S&P 500 retail index .SPXRT gained more than 1 percent for a second day.

The S&P 500 once again briefly broke above its 2013 year-end closing level of 1,848.36, which has served as resistance, but failed to hold above it, analysts said. After the bell, shares of J.C. Penney Co Inc ) climbed 12.8 percent to $6.72 as the U.S. department store chain forecast more improvement in its comparable sales and gross profit margin this fiscal year.

On  Thursday Miss Yellen addresses the Senate Banking Committee in semiannual testimony about monetary policy. This appearance, originally set for February 13, had to be postponed when Washington was walloped with the heaviest snowfall of the season.

Her comments will be scrutinized for insight into how much an unexpectedly cold winter has affected economic activity, and for confirmation that the Fed will maintain its stimulus-trimming schedule.

The Dow Jones industrial average .DJI rose 18.75 points or 0.12 percent, to end at 16,198.41. The S&P 500 .SPX inched up a mere 0.04 of a point to finish at 1,845.16. The Nasdaq Composite .IXIC added 4.477 points or 0.10 percent, to close at 4,292.064.

The small-cap Russell 2000 index ., however, climbed to a record closing high of 1,181.72 on Wednesday.

In the retail sector, Target's stock jumped 7 percent to close at $60.49 after the company reported results. The third-largest U.S. retailer said sales and earnings had been affected by a massive data breach and that costs relating to the event could hurt future profits.

Lowe's stock rose 5.4 percent to end at $50.72 after the No. 2 U.S. home improvement retailer reported earnings and sales growth and unveiled an additional stock-buyback program of $5 billion.

The S&P 500 retail index gained 1.4 percent. Wednesday's strong retail performance came a day after upbeat results from Macy's (M.N) and Home Depot (HD.N). Home Depot shares on Wednesday closed up 0.9 percent at $81.71 after rising to $82.71, a lifetime high. Macy's stock jumped 3 percent to close at $57.96, off a 52-week high at $58.65.

On the economic front, new home sales surged to a 5-1/2-year high in January, far exceeding expectations. While much recent data has been below forecasts, analysts have attributed that to bad weather rather than worsening fundamentals. The housing data could support that interpretation.

About 6.9 billion shares changed hands on U.S. exchanges, below the 7 billion average so far this month, according to data from BATS Global Markets.

Advancers beat decliners by a ratio of slightly more than 3 to 2 on both the New York Stock Exchange and the Nasdaq.

Source: Reuters

Paco de Lucia Burghausen 2004 Live. Maestro Descansa en Paz.

                                          It was a very sad news today to know the pass away of the master
                       of flamenco guitar Paco de Lucia. I had the privilege to hear some of his live
                       concerts.  Maestro descansa en paz.

Paco de Lucia Minera/Fandango Canci'on de Amor

Paco de Lucia Live at the Montreux Jazz Festival 2012

Paco de Lucia playing with caj'on Live Expo '92 Sevilla Spain

Paco de Lucia Live in Moscow 1986

Chanela Live in Sevilla Paco de Lucia

Al Dimeola & John McLaughlin & Paco de Lucia Friday Night in San Francisco Live

Concierto de Aranjuez Paco de Lucia

Almoraima Paco de Lucia BBC

Entre Dos Aguas Paco de Lucia

Paco de Lucia the famous Spanish Flamenco Guitarist dies in Mexico aged 66

Paco de Lucia, the Spanish guitarist who brought flamenco to a world audience, has died in Mexico aged 66, officials in his Andalusian hometown said Wednesday.

Born Francisco Sanchez Gomez, he was credited with modernising the Spanish Gypsy tradition with jazz and bossa nova influences during a decades-long career.

The mayor's office in his southern hometown of Algeciras, deep in flamenco country, said De Lucia died in Mexico of a heart attack. "Paco de Lucia's death turns his genius into a legend," said the mayor of Algeciras, Jose Ignacio Landaluce, in a statement. "Although he has gone, his music, his wonderful way of playing and his character will always be with us."

The town called three days of mourning and flew flags at half-mast for "the greatest guitarist of all time".

Born into a humble family in the southern Spanish region on December 21, 1947, de Lucia grew into a musical giant who blended jazz, pop and classical influences with the folk tradition of flamenco. He credited his father, a singer of Gypsy origin, with introducing him to music, encouraging him to practise for hours.

"The gypsies are better since they listen to music from birth. If I had not been born in my father's house I would be nobody. I don't believe in spontaneous genius," the guitarist once said.

From the age of just 12 de Lucia was out playing and earning at flamenco "tablaos" - the intimate, smoky bars that are home to the authentic form of the tragic gypsy lament and dancing.

By 15 he had moved to Madrid and by 18 brought out a first album.

It was in Madrid that he met another gifted teenage flamenco artist, the singer Camaron de la Isla, then just 15 and freshly arrived in Madrid. The two young men formed a legendary flamenco partnership, touring and recording together until Camaron's death from cancer in 1992.

In 2004, de Lucia was awarded Spain's prestigious Asturias Prize for Art as the "most universal of flamenco artists".

"His style has been a beacon for young generations and his art has made him into one of the best ambassadors of Spanish culture in the world," the jury said at the time.

He had lived elsewhere in Spain and in Mexico and toured widely, notably in the United States.

In the 1980s de Lucia teamed up with guitarists John McLaughlin and Al di Meola to produce the classic album "Friday night in San Francisco".

He branched out into jazz and bossa nova, drawing the scorn of traditionalists.

But he claimed to stay faithful to his origins, hunched over his guitar and grimacing with emotion as the flamenco "duende", or spirit, possessed him.

"Whatever I do my sound will always be flamenco – because I am what I am," he said. "Being a flamenco player is what gives me strength."

WSJ: Morning MoneyBeat: Valuations Still Look Pricey

     The Wall Street Journal reports,"with earnings season winding down, stock investors find themselves in essentially the same spot as the beginning of the year.

Fourth-quarter profits were better than expected but weren’t strong enough to bring stock valuations substantially lower. Revenue growth disappointed and corporate outlooks were muted, giving investors some pause about what lies ahead''.

“We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels,” said James Montier, a member of the asset allocation team at GMO, the famously contrarian Boston investment firm. “Some call us ‘valuation bears’; we argue that we are simply valuation realists.”

The team at GMO looks at a confluence of metrics when making their valuation call, including Nobel-winning economist Robert Shiller’s cyclically adjusted price/earnings ratio. The so-called CAPE ratio, which aims to provide a long-term comparison point for stock valuations, uses the last 10 years’ worth of profits and controls for inflation. It sits at 25.56, well above the long-term average of 16.52.

Other valuation metrics tell a similar story.

The S&P 500 is trading at 15.1 times next year’s earnings estimates, down from 15.3 at the end of last year, according to FactSet. The current level is above both the five-year average of 13.1 and the 10-year average of 13.9.

Entering 2014, Wall Street strategists warned that this year would differ from 2013 in a key way: Valuations wouldn’t be able to keep rising at the rate they did last year.

In 2013, stocks rose faster than earnings as investors expressed optimism that faster profit growth was around the corner. As a result, the S&P 500’s forward P/E ratio rose to 15.3 from 12.7, FactSet data show. That marked the largest expansion in the P/E ratio for stocks since 2009, when the market was recovering from the depths of the financial crisis.

The P/E ratio is a valuation of a company’s share price compared to its per-share earnings. The ratio also is known as the stock’s multiple.

As expected, multiple expansion has stagnated through the first two months of the year amid an earnings season that has yielded mixed signals. With 90% of S&P 500 companies having reported quarterly results, fourth-quarter profit growth is up 9.6% from a year ago, according to data compiled by Thomson Reuters, the highest growth rate in two years.

Revenue has risen only 1% from a year ago. And three out of every four companies providing first-quarter guidance released figures that fell below Wall Street’s estimates, which suggests companies may struggle maintaing strong profit growth in the coming quarters.

With the economy starting the year weaker than many expected and stocks still looking relatively pricey, the S&P 500 will need new positive catalysts in order to jump back to record highs and beyond.

ETA For iPhone Offers A Simpler Way To Get Driving Times & Directions To Your Favorite Places

Looking for a quicker way to find the drive time between two or more points, and optionally get directions? Google Maps may still be everyone’s go-to mapping application on mobile, but a new iPhone app called ETA is launching today to offer a simpler, faster and generally less cumbersome experience.

However, the app isn’t really competing directly with the mapping giants themselves. Instead, ETA is like an improved front end for finding drive times and kicking off the turn-by-turn navigation feature that the mapping companies provide.

The target audience for the ETA app are those in larger cities, where getting to various venues is often impeded by traffic congestion. ETA determines the travel time between your starting and end destinations, taking into account current traffic, and, with a tap, can provide you with quick access to directions, too.

To get started with the app, you press the plus button (‘+’) to add a new destination by place name or address. (ETA uses Apple’s location database for places.) Once added, travel time to the destination is calculated, and driving times are shown to the left. To see walking times instead, just swipe to the right.

If you also need directions, you just tap on the destination to launch your preferred maps app. By default, ETA uses Apple Maps for directions, but if you have Google Maps or Waze installed, you can choose to use one of those applications by making a change in ETA’s settings. No matter which map app you use, the maps app opens up with the route already plotted.

Since you can save your regularly visited destinations in ETA, it’s actually faster to use it over a traditional maps app like Google’s, where you have to first search for the destination, find the right one by swiping through the results, tap the directions button, tap how you’re traveling (walking, transit, biking, driving, etc.), select which route option you want from a list of choices, then tap to start the navigation.

With saved destinations, ETA boils this process down to a couple of taps – once to expand the destination, and again to launch the maps app which is poised to begin navigation.

The app was created by Melbourne-based Eastwood, a two-person company run by Anthony Harrison and Justin Almering, both who have technical and agency backgrounds. The two first met at a local studio back in 2008, when Almering was working as a Flash developer. He later transitioned to iOS development, which he’s been focused on for the past four years.

Now at Eastwood, where Harrison handles more of the business side of things, the two generate income for client work which they used to build ETA. The plan is to shift away from outside projects this year, in order to build their own products full-time.

Harrison explains that the idea for ETA came from his and Almering’s motivation to provide a “no fuss” experience where you could see travel times all on one screen. “Our inspiration came from ‘World Clock’ available inside Apple’s ‘Clock’ app. It clearly presents the current time at all your favorite cities around the world,” he says. “Our hope is that we accomplished this same clear presentation with ETA.”

To some extent, ETA competes with Google Now, which proactively alerts you about travel times, traffic, and distances to your next destination. But Harrison notes that ETA works even when you’re not organized enough to have meeting entries and addresses saved in your calendar, plus it could make sense for travelers who want to pre-load their day’s sightseeing destinations in a single interface before heading out.

Source: TechCrunch

Google Now Launcher Comes To Play Store, With Always-On ‘Ok Google’ And Swipe For Now

Source: TechCrunch

Google reconfigured the Android home screen launcher somewhat with the Nexus 5, but that redesign didn’t make its way out to other Nexus or Google Play Edition hardware when they received the Android 4.4 KitKat update. Today, Google has released the new “Google Now Launcher” as a standalone app in the Play Store (via Android Police) to bring that modified home screen goodness to a wider audience.

Note that I didn’t say “to everyone”; Google has made this available only to other Nexus devices and Google Play Edition handset owners for now, limiting access to people with Android hardware that’s essentially running the stock version of its mobile OS. It’s perhaps a little sad for users outside the “stock” experience pool, but the good news is that there’s not too much changed.

You’ll see a different dock, without any line separating it from the rest of the home screen, as well as other slight visual tweaks. But there are some significant changes in the way the OS works, as well. For instance, saying “Ok Google” at any point with the phone unlocked and on the home screen will initiate a Google search, just like how that works on the Nexus 5. Also, swiping left from your ‘main’ home screen (the one which used to be your central one) will now open up Google Now, instead of exposing yet another home screen panel.

Nexus and Play Edition device owners running KitKat can download this now and replace their default launcher with the app. Hopefully, Google sees fit to expand this to other Android handsets in the future, too, if only because the “Ok Google” always on voice commands are genuinely pretty useful.

Alarm in Ukraine as Putin puts Russian troops on alert. Yes, Mr Putin says it has nothing to do with events in Ukraine!!!

President Vladimir Putin put 150,000 Russian combat troops on high alert for war games near Ukraine on Wednesday, the Kremlin's boldest gesture yet after days of sabre rattling since its ally Viktor Yanukovich was toppled as president in Kiev.

Moscow denied that the previously unannounced drill in the western military district near Ukraine was linked to events in its neighbour but it came amid a series of increasingly strident statements about the fate of Russian citizens and interests.

With the political turmoil hammering Ukraine's economy, the central bank said it would no longer intervene to shield the hryvnia currency, which tumbled 4 percent on Wednesday and is now down a fifth since January 1. Wednesday's abrupt abandonment of Ukraine's currency peg sent ripples to Russia where the rouble fell to five-year lows and bank shares fell.

Thousands of ethnic Russians, who form the majority in Ukraine's Crimea region, demonstrated for independence. They scuffled with rival demonstrators supporting the new Kiev authorities. The Crimea is home to part of Russia's Black Sea Fleet, which Moscow said it was taking steps to secure.

One person died in the Crimea protest, apparently of a heart attack during a crush of the crowd, Interfax news agency reported. A Reuters correspondent on the scene reported surging crowds and scuffles but no major violence.

NATO defence ministers, meeting in Brussels, issued a statement supporting "Ukrainian sovereignty and independence, territorial integrity, democratic development, and the principle of inviolability of frontiers". Their statement made no direct mention of the Russian war games.

U.S. Secretary of State John Kerry said Russia should respect the territorial integrity of Ukraine and be "very careful" in its judgments toward its neighbour.

"What we need now to do is not get into an old, Cold War confrontation," he said on MSNBC television.

Russia's foreign ministry said Ukrainian extremists were

"imposing their will", and a Ukrainian church affiliated with the Moscow-based Russian Orthodox Church had faced threats.

Earlier Moscow denounced the rise of "nationalist and neo-fascist sentiment" in Ukraine's mainly Ukrainian-speaking west and said Russian speakers were being deprived of rights.

It has repeatedly expressed concern for the safety of Russian citizens in Ukraine, using language similar to statements that preceded its invasion of Georgia in 2008.

"In accordance with an order from the president of the Russian Federation, forces of the Western Military District were put on alert at 1400 (1000 GMT) today," Interfax news agency quoted Russian Defence Minister Sergei Shoigu as saying.

Shoigu also said Russia was also "carefully watching what is happening in Crimea" and taking "measures to guarantee the safety of facilities, infrastructure and arsenals of the Black Sea Fleet," in remarks reported by state news agency RIA.

Since Yanukovich's downfall on Friday, all eyes have been on Putin, who ordered the invasion of neighbouring Georgia in 2008 to protect two self-declared independent regions with many ethnic Russians and others holding Russian passports, and then recognised the regions as independent states.

Any military action in Ukraine, a country of 46 million people that has close ties with European powers and the United States, would be far more serious - the closest the West and Russia have come to outright confrontation since the Cold War.

Despite the alarm raised by the sabre-rattling, many analysts expect Putin will pull back before taking armed action.

The war games would cause tension in Ukraine and Europe but were probably for show, said Moscow-based military analyst Alexander Golts: "Any rational analysis says that Russia would get nothing out of military intervention - it would become an international outcast."

Ukraine's new authorities say they are worried about separatism in Crimea, the only part of Ukraine where the majority is ethnic Russian, although many ethnic Ukrainians in other eastern areas speak Russian as a first language.

The Crimea, a Black Sea peninsula administered as part of Russia until the Soviet authorities transferred it to Ukraine in 1954, has frequently seen separatist tension at times of mistrust between Moscow and Kiev.

Demonstrators poured into the regional capital Simferopol, where the provincial parliament was debating the crisis.

Pro-Russian crowds, some cossacks in silk and lambswool hats, shouted "Crimea is Russian!". More were bussed in, swelling the crowd. Police denied a report by a Russian news agency that there had been an explosion.

Rival demonstrators backing the new authorities - mainly ethnic Tatars repressed under soviet rule - rallied under a pale blue flag, shouting "Ukraine! Ukraine!" 
Ukraine's new leadership plans to name its new cabinet late on Wednesday, paving the way for urgent IMF talks to stave off financial meltdown now that Russia is all but certain to cut off a $15 billion lifeline it offered Yanukovich as the prize for turning his back on ties with the EU in November.

The International Monetary Fund has said it is prepared to send a team of negotiators to Kiev, but a government must first be formed there and request the aid. U.S. Deputy Secretary of State William Burns, visiting Kiev, said American financial experts were already in the country looking for ways to help.

Yanukovich fled Kiev on Friday night after days of violence in which scores of his countrymen were killed, including demonstrators shot dead by police snipers from rooftops.

His whereabouts are not known, although the government says it believes he is hiding in Crimea. It wants him tried at the International Criminal Court in the Hague.
The new authorities must salvage the economy of a country near bankruptcy and heavily dependent on Russian gas. Traders in Kiev said the central bank was absent from the hryvnia market, allowing the currency to fall below 10 to the dollar, a record.

Central bank governor Stepan Kubiv said the bank would not intervene to prop up the currency in coming days. Sergiy Kruglyk, the bank's international relations director, said Kiev had "transferred from a fixed, so-called managed exchange rate to the flexible exchange rate".

Acting prosecutor Oleh Makhnytsky announced he had ordered police and intelligence agencies to draw up a list of foreign accounts held by Yanukovich's aides and their connections to search for "not millions, but billions" in stolen assets.

Every economic deal concluded in the four years of Yanukovich’s presidency would be carefully re-examined for possible corruption, Makhnytsky said.

Abandoning the currency peg will halt the rapid erosion of Ukraine's foreign reserves spent under Yanukovich to prop it up, but the further the hryvnia falls, the harder it will become for Kiev to repay its dollar debt. The cost of a contract to insure Ukraine's debt rose to levels that signal investors believe a default within five years is likelier than not.

London Metal Exchange prices for February 26, 2014

Source   BBC

U.S. New-home sales rise 9.6% in January

Sales of new single-family homes started 2014 with surprising strength, rising 9.6% in January to a seasonally adjusted annual rate of 468,000, the fastest pace in more than five years, according to government data released Wednesday. Economists polled by MarketWatch had expected a January sales rate of 405,000, compared with an originally estimated pace of 414,000 in December. On Wednesday, the government upwardly revised December's pace to 427,000. Home sales in January were up 2.2% from the year-earlier period. The show of resiliency is in the face of home prices and mortgage rates that have trended higher over the past year. Economists had also expected unusually cold winter weather to hit recent sales of new homes. The median sales price of new homes fell 2.2% in January to $260,100, but was up 3.4% from the year-earlier period. The supply of new homes on the U.S. market fell to 4.7 months in January at the current sales pace from 5.2 months in December.

Source MARKETWATCH

Asia-Pacific Equity Indexes for FEBRUARY 26TH 2014

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