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– ECB’s Draghi: Central bank has plenty of tools, willingness and capacity to act on inflation. What’s more, Fed rate hike executed “flawlessly”. Mon Policy, fiscal stance, oil price drop supporting EZ recovery. Less optimistic on inflation on oil, EM slowdown.

– Global Bonds (10Y, Govt): Japan 0.221%; Germany 0.448%; France 0.773%; Canada 1.260%; UK 1.668%; US 2.036%; Australia 2.729%.

– 2015 Real GDP Forecasts (y/y): Australia 2.3%, Canada 1.2%, Euro zone 1.5%, Japan 0.6%, NZ 2.4%, Switzerland 0.8%, UK 2.2%, US 2.4%.

– Equities, Oil, Yen Crosses and CAD Rebound as Fear Cools.

– Japan’s Economy Minister Amari: Draghi’s comments may have led to stock gains, Stock fluctuations may have been due tp external factors.

– Asian markets surged Friday, with major indexes posting over 1 percent gains each, tracking the rally in European and U.S. equities overnight and getting a boost from a slight uptick in oil prices and comments from the European Central Bank (ECB). Aiding the overnight rally, ECB chief Mario Draghi hinted that new stimulus may be forthcoming at the central bank’s meeting in March. “Monetary easing speculation is providing a boost for Asian markets today. Draghi’s intimation that the ECB may be forced to ease further at their March meeting, as well as fomenting expectations that the Bank of Japan may ease further at their meeting next week, are all supporting the rally,” said Angus Nicholson, market analyst at spreadbetter IG, in a note Friday. “The bigger question everyone in the markets is asking is whether we have seen the bottom. In my opinion, the short answer is no.” The ECB can perhaps cut the deposit rate by another 10 or 20 basis points, according to Parpart, who added if the central bank chose to again talk about quantitative easing, without actually following through with actions, markets will not be impressed. “They will actually have to increase the amount of buying, which they did not do in December.” Despite the out-sized rally Friday, memories of the global rout that pushed several regional markets into bear territory this year have not entirely faded into a TGIF sentiment. “The rally in risk assets is a selling opportunity,” Tim Condon, head of research for Asia at ING Financial, said in a note Friday.

– Oil prices saw temporary respite during overnight trade, despite bearish data from Stateside showing further build up in oil inventories. The West Texas Intermediate (WTI) gained 4.16 percent and the international benchmark Brent increasing by 5.1 percent. But prices remain at lows not seen in more than a decade.

– With oil prices having already lost roughly 20% year to date, a Thursday rebound didn’t come as a surprise, but that doesn’t mean prices have bottomed out. “Prices will be low for some time due to supply overhang and [a] soft demand story,” said Rob Haworth, senior investment strategist for U.S. Bank Wealth Management. “The real low in prices seems more likely to occur with a ‘whimper’ than a ‘bang’.” Read: Why oil could plunge to $20 a barrel, but probably not $10 But realizing when that bottom comes is important. If a trader waits to hear long-term analysts declare that the oil bust is finally over before buying oil, “he has waited too long and may well miss the big growth in the market,” said Charles Perry, chief executive officer of energy-consulting firm Perry Management. History has shown us over and over that when everyone is swimming in the same direction, smart money always swim in the opposite way,” said Naeem Aslam, chief market analyst at AvaTrade. “If you look at the fundamentals or sentiment, both are extremely bearish for oil and this confirms that most of the juice has already been squeezed out.”

– Sticky Canada CPI to Fuel Larger USD/CAD Correction.

– With December’s seasonal shenanigans out of the way, and following 2 record-breaking weekly builds in gasoline stocks, with expectations of a 2.3mm barrel build API reported a large 4.5mm inventory build (double expectations) . Cushing inventories likely rose for the 12th week in a row. December is over…Following crude’s v-shaped recovery today, API’s huge build sent WTI back lower…

– I like to say, “Trading is a much more about observation”. When I last wrote about GBP/USD, it was testing a 30-year trend line into a turn window related to the 2014 – 2015 decline. The market ‘recovered’ from this time/price support for less than two days before turning down sharply again. A market that cannot catch a bid from a deeply oversold condition against important long-term support with positive timing is clearly trying to tell us something. In the case that the downtrend in Cable remains in full force. That take was further confirmed the next day as the exchange rate did not even stall out at a seemingly important Fibonacci convergence of the 78.6% retracement of the 2009 – 2014 advance and the 61.8% projection of the 2014 – 2015 decline around 1.4300. Spot has not surprisingly continued its descent since then to trade to its lowest level in almost seven years this morning. So what now? Currently GBP/USD is testing the bottom of the 1-year standard deviation channel. It can act as support, but it is usually more important when other things are converging with it and in this case, I am not seeing anything relevant. Below there is the 88.7% retracement of the 2009 – 2014 advance around 1.3930, but both are dubious at best. Just to be clear I think this trend needs to be respected and until proven otherwise there is little reason to try to fight it. However, I think we probably get a decent rebound because of the extreme negative sentiment profile sooner rather than later, but only over 1.4400 would signal to me that anything of consequence is setting up on the upside.