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Japan All Industry Activity Grows At Slower Pace

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Japan's all industry activity growth halved in December, the Ministry of Economy, Trade and Industry reported Wednesday.

The all industry activity index rose 0.5 percent month-on-month in December, following November's 1 percent increase. Nonetheless, this was the third consecutive increase in activity and bigger than the expected 0.4 percent rise.

Industrial production advanced 2.9 percent, while construction activity shrank 0.4 percent and tertiary industry activity contracted 0.2 percent in December.

On a yearly basis, all industry activity growth slowed to 1.8 percent in December from 2 percent a month ago.

In the fourth quarter, all industry activity rebounded 0.7 percent after declining 0.3 percent in the third quarter.

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ARGENTINA: Merval Rises As Fed Minutes Point To Gradual Increase In U.S. Rate

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Merval, the main index of the Buenos Aires Stock Exchange, rose 0.85%, closing at 33,108.16 points, in a volatile session, after the Federal Reserve meeting minutes showed that the U.S. central bank will move gradually towards higher interest rates.

"The main US stock indices increased following the minutes of the Federal Reserve. The local market was not kept aside," said Eduardo Fern?ndez, an analyst at Rava Burs?til.

Ternium Siderar shares rose 0.32% even after the company reported a consolidated net profit of result of 848.1 million pesos for the fourth quarter of 2017, 10.12% lower compared to the same period of the previous year.

The Argentinean state-owned oil company YPF also ended higher (+1.22%) after starting the sale of its stake in Metrogas, dedicated to the distribution of natural gas.

The oil company Vista Oil & Gas reported that it agreed to acquire an oil operating platform of Pampa Energ?a (+2.51%) and Pluspetrol Resources Corporation in Vaca Muerta.

The shares of Distribuidora de Gas Cuyana (-2.36%), TGS (-2.34%), San Miguel (-1.38%), and Tenaris (-,86%) fell the most, while Cresud (+5.16%), Holcim (+4.15%), and Autopistas del Sol (+3.68%) posted the strongest gains.

The locally traded U.S. dollar rose 0.37%, to 19.92 Argentinean pesos, due to lower interest rates from Lebacs, the country's central bank bonds.

"The drop in the interest rate set by the central bank to the Lebac left the greenback without a clear trend, with sudden ups and downs amid a sharp drop in the trading volume," said Fernando Izzo, an analyst at ABC Mercado de Cambios.

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Eurozone Business Growth Remains Firm in February

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Eurozone business growth remained strong in February, with companies at their most optimistic in over five years, a private-sector survey showed.

The eurozone was one of the best-performing major economies in 2017, and its businesses started 2018 by ramping up activity at the quickest rate in well over a decade.

However, February's preliminary Purchasing Managers' Index (PMI) indicated that the pace of growth set in January, the fastest in well over a decade, has lost a little momentum.

IHS Markit's composite flash PMI for the euro zone, seen as a good guide to economic health, dropped to 57.5 in February.

Nevertheless, this month's reading was still one of the most growth - or farthest above 50 - in more than 11 years. According to IHS Markit, the eurozone was on track for its best quarterly growth since the second quarter of 2016, with the PMI pointing to first-quarter growth of 0.9 percent.

Companies shared that optimism - an index measuring expected output in a year's time climbed to 68.3 from 68.0, its highest since IHS Markit started collecting the data in July 2012.

Consumer confidence in the bloc dropped more than expected this month, but that was from a 17-year high set in January, official data recently showed.

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Japan Overall Nationwide Inflation Advances 1.4% In January

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Overall nationwide consumer prices in Japan climbed 1.4 percent on year in January, the Ministry of Internal Affairs and Communications said on Friday.

That exceeded forecasts for 1.3 percent and was up from 1.0 percent in December.

Core CPI, which excludes food prices, advanced an annual 0.9 percent - above expectations for 0.8 percent and unchanged from the previous month.

Among the individual components, prices were higher annually for fuel, medical care, food, transportation and education, while they were down for furniture and housing.

On a monthly basis, overall inflation added 0.4 percent and core CPI gained 0.2 percent.

Among the individual components, prices were higher monthly for food, fuel and furniture, while they were down for clothing, recreation and medical care.

Also on Friday, the Bank of Japan said that producer prices in Japan were up 0.7 percent on year in January.

That was shy of expectations for a gain of 0.8 percent, which would have been unchanged from the previous month.

On a monthly basis, producer prices were down 0.6 percent after adding 0.2 percent in December.

Prices were down for leasing, transportation and financial services, while they were higher for advertising services.

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BOJ has no Plan Conduct Another Policy Review: Kuroda

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Bank of Japan Governor Haruhiko Kuroda said that conducting another comprehensive assessment of the central bank's monetary policy is currently not on the table.

Speaking to the parliament, the head of the Japanese central bank said that things are progressing smoothly, so there are no plans at this stage to hold another comprehensive review, citing the steady recovery in the economy.

The comments were made by Haruhiko when asked by a legislator whether BOJ would conduct an assessment of why its policy had failed to drive up inflation to its 2 percent target.

He reaffirmed the BOJ's resolve to retain its massive monetary stimulus with inflation far from its target.

The central bank overhauled its policy framework to one targeting interest rates from the rate of monetary printing in 2016, after three years of massive asset purchasing failed to accelerate prices pressures.

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Bank Of Korea Keeps Benchmark Interest Rate Unchanged At 1.50%

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The Bank of Korea's monetary policy board on Tuesday voted to hold the nation's benchmark interest rate steady at 1.50 percent, in line with expectations.

The decision was the first since the bank hiked rates by 25 basis points in November, marking the first change in the benchmark in 14 months. It also marked the bank's first rate hike since 2011.

The rate had been static since June of last year, when the bank trimmed the rate from 1.50 percent.

Persistently low inflation and touches of softness in the economy allowed the central bank to leave the monetary stimulus in place.

"The board considers that the acceleration in global economic growth has continued. Volatility in the global financial markets has increased substantially, with government bond yields rising and stock prices falling in line mainly with strengthening expectations of monetary policy normalizations in major countries," the bank said.

Consumer prices were up 0.9 percent on year in January - well shy of forecasts for 1.5 percent, which would have been unchanged from the December reading. On a monthly basis, inflation was up 0.5 percent, accelerating from 0.3 percent in the previous month.

Core CPI, which excludes food prices, gained 0.2 percent on month and 1.1 on year after rising 0.2 percent on month and 1.5 percent on year a month earlier.

Producer prices gained 1.2 percent on year in January, slowing from 2.2 percent in December. On month, producer prices gained 0.4 percent after remaining flat in December.

"Looking ahead it is forecast that consumer price inflation, after remaining in the low- to mid-1% range for some time, will pick up and gradually approach the target level from the second half of this year. Core inflation will also gradually rise," the bank said.

South Korea's gross domestic product contracted a seasonally adjusted 0.2 percent on quarter in the fourth quarter of 2017. That missed forecasts for an increase of 0.5 percent following the 1.5 percent jump in the three months prior.

On a yearly basis, GDP gained 3.0 percent - again missing expectations for 3.2 percent and down from 3.8 percent in the previous three months.

For all of 2017, South Korea's GDP was up 3.1 percent.

"The board expects domestic economic growth to be generally consistent with the path projected in January. It anticipates that investment will slow, but that the trend of steady increase in consumption will continue," the bank said.

South Korea's unemployment rate eased to 3.6 percent in January from 3.7 percent in December, which was revised up from 3.6 percent.

South Korea posted a merchandise trade surplus of $3.7 billion in January, marking the 72nd straight months in the black.

Exports jumped 22.2 percent on year to $49.21 billion in January - climbing in 15 straight months and up from $40.25 billion a year earlier.

Imports spiked an annual 20.9 percent to $45.48 billion.

"Looking ahead, the board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation can be stabilized at the target level over a medium-term horizon, while paying attention to financial stability," the bank said.

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Qualcomm to Consider Broadcom Takeover Bid on Higher Price Tag

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Qualcomm had a change of heart regarding an acquisition offer by its rival Broadcom, stating it is open to considering the bid if it is raised to $160 billion including $25 billion in assumed debt, according to sources cited by Financial Times.

The change in the company's stance marks a big change for Qualcomm executives, who have been opposing the deal on antitrust grounds. Sources close to Qualcomm said that Broadcom has recently made sufficient progress in tackling the competition issues in order to make way for talks to reach a phase where the two parties can reach an agreed price.

Qualcomm is seeking that Broadcom sweetens its offer by at least 15 percent to above $90 per share, up from its present $79 per share offer, to achieve what would be the biggest tech deal ever brokered, according to people knowledgeable of the proceedings. The total $160 billion price tag would include Broadcom taking on $25 billion in Qualcomm debt.

Several sources close to Qualcomm's senior management said the firm is now open to sealing the deal, but the takeover depends on Hock Tan, Broadcom's CEO, who can decide whether to change course and increase his offer price.

Qualcomm has sent a letter to Tan, expressing the team's interest in pursuing a non-disclosure deal that would enable the two parties to begin due diligence. Qualcomm chairman Paul Jacobs also called for the two chipmakers to set a meeting to negotiate a price as soon as possible. The proposals were dismissed by Broadcom, but said that it was ready to discuss terms that were 'realistic' for both companies.

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Japan Industrial Output Falls 6.6% In January

Industrial production in Japan contracted a seasonally adjusted 6.6 percent on month in January, the Ministry of Economy, Trade and Industry said in Wednesday's preliminary reading.

That missed forecasts for a decline of 4.0 percent following the 2.9 percent gain in December.

On a yearly basis, industrial production added 2.7 percent - again missing forecasts for 5.3 percent and down from 4.4 percent in the previous month.

Upon the release of the data, the METI maintained its assessment of industrial production saying that it is picking up slowly.

Industries that weakened in January included transport equipment, business-oriented machinery and electronic parts and devices.

Shipments were down 5.6 percent on month and up 4201percent on year.

Industries that were down included transport equipment, business oriented machinery and electronic parts - while communications electronics equipment was up.

Inventories shed 0.6 percent on month and climbed 1.4 percent on year. Industries in contraction included business oriented machinery, transport equipment and iron and steel.

Industries that were up included ceramics, non-ferrous metals and chemicals.

According to the survey of production forecast, industrial output is expected rise 9.0 percent in February and fall 2.7 percent in March.

Industries that are expected to contribute to the increase in February include business oriented machinery, transport equipment and electronic parts.

Industries expected to contribute to the decline in March include electronic devices, electrical machinery and transport equipment.

Also on Wednesday, the METI said that retail sales in Japan were down a seasonally adjusted 1.8 percent on month in January.

That missed forecasts for a decline of 0.6 percent following the 0.9 percent gain in December.

On a yearly basis, retail sales advanced 1.6 percent - again missing expectations for a gain of 2.4 percent and slowing from 3.6 percent in the previous month.

Sales from large retailers advanced an annual 0.5 percent - exceeding forecasts for 0.4 percent and slowing from 1.1 percent a month earlier.


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Fed’s Powell Sees Strong Economy, Strikes Hawkish Tone for Policy

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In his first public appearance as the head of the U.S. central bank, Federal Reserve Chairman Jerome Powell pledged to prevent the economy from overheating while staying on course of a path of gradually hiking interest rates.

In his testimony before the U.S. House of Representatives' Financial Services Committee, Powell gave a nod to the economy's recent show of strength, a comment that investors perceived as hawkish and increased bets on four rate increases in 2018.

The central bank's last wave of economic projections in December indicated three rate hikes this year.

But Powell's overall tone was that of continuity, as he told legislators that the Fed would balance the need to prevent excessive inflation with the benefits of allowing the economy to take advantage of the benefits of the tax cuts and solid global growth.

He said that the Fed was currently assessing how low employment could fall before inflation began to bite. The U.S. jobless rate is at a 17-year low of 4.1 percent.

Powell added that some of the challenges the economy faced in prior years have become tailwinds, noting the recent change in fiscal policy and a global economic recovery. But he also noted that inflation continues to be below the 2 percent target. In the FOMC's perspective, he said that further gradual rate hikes in the federal funds rate will best help them reach both objectives.

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COLOMBIA: Bogot? Asks Caracas To Open Humanitarian Channel

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The President of Colombia Juan Manuel Santos asked the Venezuelan government to allow at least one humanitarian channel to alleviate the situation of the country's population.

According to him, Venezuela's trouble is "an issue that greatly concerns us." He added that both Colombia and Peru are receiving significant inflows of Venezuelan migrants.

Santos said that both countries are concerned "not only with the social situation that the Venezuelan people are experiencing, and the crisis that the country is experiencing and the repercussions on the population," but also with what he called as "the destruction of democracy, disrespect, and violation of all the fundamental rights of Venezuelan citizens and the overflow of democratic institutions."

Santos also stressed that Colombia and Peru would continue to insist "until we see Venezuela with a functioning democracy again."

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Eurozone Inflation Drops in February, Highlights ECB Caution

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Eurozone inflation fell to a 14-month low in February, which highlights the European Central Bank's caution in removing stimulus despite growth surpassing expectations and the bloc's economy appearing to be on its best shape in a decade.

Official figures from the EU's statistics agency Eurostat showed the headline year on year inflation rate dropped from 1.3 percent to 1.2 percent in February, its weakest level since December 2016.

A closely watched measure of underlying inflation which excludes volatile energy and unprocessed food prices remained steady at 1.2 percent.

Inflation in services and non-energy industrial goods actually rose over the period, and Pantheon Macroeconomics' Claus Vistesen suggested “only unfavourable rounding kept the core rate from nudging higher to 1.1 percent”.

Energy prices in particular have been driving a decline in headline inflation rate for several months, while February's figure was also affected by a sharp pull-back in food price inflation

Hoping to raise inflation back to target after years of misses, the ECB has purchased more than 2 trillion euros ($2.45 trillion) worth of bonds in the past three years to boost investment and consumption.

Policymakers have warned that a stronger euro could threaten the ECB's medium-term goal of keeping inflation below, but close to, 2 percent, but despite the currency's impressive recent gains against the dollar, it has remained fairly stable on a trade-weighted basis over the last six months.

The data had little immediate impact on the euro, which was down around 0.15 percent against the dollar at publication time.

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Treasury Yields Slide as Trump Slaps Tariffs on Steel, Aluminum Imports

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Prices of U.S. government bonds edged up, driving down yields, as investors hurried to secure safe-haven government paper after the Trump administration announced its decision to impose global tariffs on steel and aluminum imports that triggered a stock-market selloff.

In his second testimony to the Congress, Federal Reserve Jerome Powell said he saw no indications of solid wage pressure, language that some market participants aw as an effort to backtraw his hawkish comments earlier in the week. The 10-year Treasury note yield declined 6.7 basis points to 2.802 percent, denoting the biggest one-day decline since September 5, according to WSJ Market Data Group.

The two-year note yield, the most affected by the monetary policy outlook, edged down 5.6 basis points to 2.206 percent, marking the biggest one-day decline in three weeks. The 30-year bond yield fell 4.6 basis points to 3.084 percent.

The last two days of trading has helped to counter some of the selloff in February when a revival of inflation worries weakened the appetite for bonds.

Treasury yields climbed after President Donald Trump announced levies on steel and aluminum imports, causing stocks to slide. Jittery investors flocked to government paper to secure safe-haven assets to protect themselves against market volatility.

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Gold Prices Rise Amid Concerns Over Trade War, Italy Elections

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Gold prices increased on Monday as the dollar remained subdued on concerns over a potential global trade war, as well as amid uncertainty surrounding the outcome of elections in Italy, providing support to the precious metal.

Spot gold gained 0.3 percent at $1,326.41 per ounce. Earlier in the session, it notched $1,327.03, their highest since Feb. 27.

U.S. gold futures rose 0.3 percent to $1,327.70 per ounce.

The dollar index, which measures the U.S. currency against a basket of major peers, was mostly unchanged at 89.971, after falling against most currencies on Friday.

The greenback fell from its six-week high that it hit on March 1, after U.S. President Donald Trump announced plans to levy hefty tariffs on aluminium and steel imports fueling fears of retaliation from its trade partners triggering a trade war.

Italian voters delivered a hung parliament on Sunday and if early projections are confirmed, none of Italy's three main groups will be able to rule alone and there is little prospect of a return to mainstream, moderate government, giving the European Union a new predicament to deal with.

Spot gold could increase to $1,332 per ounce, as it has pierced above a resistance at $1,325, according to Reuters technical analyst Wang Tao.

In other precious metals, silver climbed 0.6 percent to $16.58 per ounce. Platinum rose 0.6 percent to $965.49 per ounce, while palladium added 0.3 percent at $994.50.
 
Australia Keeps Rates On Hold

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Australia's central bank decided to leave its key interest rate unchanged at a record low, as widely expected, on Tuesday.

The board of the Reserve Bank of Australia, governed by Philip Lowe, maintained the cash rate at 1.50 percent.

The bank noted that the low level of interest rates is continuing to support the Australian economy.

The Bank's central forecast is for the Australian economy to grow faster in 2018 than it did in 2017.

The central forecast is for CPI inflation to be a bit above 2 percent in 2018.

Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

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Australia GDP Expands 0.4% In Q4

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Australia's gross domestic product advanced a seasonally adjusted 0.4 percent on quarter in the fourth quarter of 2017, the Australian Bureau of Statistics said on Wednesday.

That was shy of expectations for 0.5 percent and down from 0.6 percent in the three months prior. On a yearly basis, GDP gained 2.4 percent - again missing forecasts for 2.5 percent and down from 2.8 percent in Q3.

"Growth this quarter was driven by the household sector, with continued strength in household income matched by growth in household consumption," ABS Chief Economist Bruce Hockman said.

Household final consumption expenditure increased 1.0 percent for the quarter.

Exports of goods and services detracted 0.4 percentage points from GDP growth.

Final consumption expenditure picked up 1.1 percent on quarter and 3.3 percent on year, while gross fixed capital formation shed 1.2 percent on quarter and climbed 2.5 percent on year.

The terms of trade added 0.1 percent on quarter and fell 1.0 percent on year, while real disposable income was flat on quarter and gained 1.5 percent on year.

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Treasury Yields Slide amid Tariff Uncertainty, CVS Bond Sale

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U.S. government bonds slightly retreated on Tuesday, paring early gains, after traders position amid a massive corporate bond offering by CVS Health and as uncertainty regarding global tariffs on aluminum and steel imports weighed on markets.

The 10-year Treasury note yield was mostly unchanged at 2.877 percent. Yield on the two-year note yield was mostly flat at 2.246 percent. The long bond or the 30-year bond rate edged down by 1.6 basis points to 3.135 percent.

According to traders, the bond market steadied as CVS Health Corp. acquired around $50 billion dollar worth of debt on Tuesday. Firms looking to issue bonds depend on dealers to unload the massive stockpiles and the said dealers will most likely hedge a sudden jump in interest rates by letting go of their Treasury holdings.

U.S. government paper experienced brief selling earlier in the session after House Majority Leader Paul Ryan, along with other congressional Republicans, appear to step up pressure on President Donald Trump to ease up on his protectionist stance. On the other hand, Treasury Secretary Steven Mnuchin stated Mexico and Canada will be excluded from the tariffs if NAFTA is successfully renegotiated. The lack of certainty on the trade front has weakened the demand for stocks, while increasing the demand for bonds.

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Australia January Trade Surplus A$1.055

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Australia posted a merchandise trade surplus of A$1.055 billion in January, the Australian Bureau of Statistics said on Thursday.

That blew away forecasts for a surplus of A$200 million following the upwardly revised A$1.146 billion deficit in December (originally A$1.358 billion).

Exports gained A$1.394 billion or 4.0 percent on month to $33.924 billion.

Non-rural goods added A$869 million (4 percent) and non-monetary gold gained A$770 million (54 percent).

Rural goods fell A$312 million (8 percent) and net exports of goods under merchanting tumbled A$9 million (17 percent). Services credits added A$77 million (1 percent).

Imports sank A$807 million or 2.0 percent to AA$32.869 billion.

Consumption goods lost A$586 million (7 percent), non-monetary gold dropped A$95 million (19 percent) and capital goods fell A$90 million (1 percent).

Intermediate and other merchandise goods lost A$68 million (1 percent), while services debits picked up A$31 million

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China CPI Jumps To 2.9% In February

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Consumer prices in China were up 2.9 percent on year in February, the National Bureau of Statistics said on Friday.

That exceeded forecasts for 2.4 percent and was up sharply from 1.5 percent in January.

On a monthly basis, consumer prices jumped 1.2 percent following the 0.6 percent gain in January.

The bureau also said that producer prices advanced an annual 3.7 percent versus expectations for 3.8 percent and down from 4.3 percent in the previous month.

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COLOMBIA: Colcap Raises Slightly On Ecopetrol, Caution With Elections

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Colcap, the main index of the Colombian Stock Exchange, added 0.41% to 1,480.56 points near Friday's closing, due to the rise of Ecopetrol's shares (+1.01%) in a session marked by a substantial business volume ahead.

The increase in Ecopetrol's stocks tracked the rebound in oil prices abroad.

Analysts at Davivienda Corredores noted that despite the slight rise, the Colombian index remains lagging behind the performance of other Latin American stock exchanges mainly because of the uncertainty for the legislative elections results.

On the business side, Avianca's shares rose by 1.13% despite reports that its subsidiary companies mobilized 2,320,638 passengers in February, 0.3% less than the passengers transported in the same month last year.

The locally traded U.S. dollar closed at 2,868.80 Colombian pesos, marking a 0.25% fall, due to the rebound in oil prices abroad.

"As long as oil prices remain close to US$ 60, the valuations will be limited. There was also a natural reaction before Sunday's legislative elections," said Wilson Tovar, an analyst at Acciones & Valores.

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Australian Exports to Grow after Securing U.S. Tariff Exemptions - Industry

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Australian steel and aluminum manufacturers recently said exports to the United States will grow after securing exemptions from tariffs signed into law by U.S. President Donald Trump.

Trump on Friday said Australia would become the third country to be free from a 25 percent tariff on steel imports and 10 percent for aluminum.

Exporting just more that A$400 million ($314.32 million) last year, Australia is a relatively small supplier of steel and aluminum to the United States.

“This is a great outcome for us and... (for) jobs in North America,” according to Mark Vassella Managing Director and CEO of BlueScope Steel, which is Australia's largest exporter.

Shares in BlueScope gained over three percent on Monday, outperforming the broader market, which marked modest gains.

While it was good news for Australian exporters, producers fear the U.S. tariffs could hit them indirectly, as exporters that are subject to the tariffs try to find other markets for their steel and aluminum.

Rejecting calls for additional laws to prevent potential dumping, Australian Prime Minister Malcolm Turnbull said existing measures were sufficient. Turnbull also said Australia would not join an international protest against the U.S. tariffs.

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