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Wall Street Futures Dollar Dip After Us Government Shutdown Asia Resilient

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TOKYO – Wall Street stock futures and the dollar pulled back slightly on Monday after the U.S. government was forced to shut down amid a dispute between President Donald Trump and Democrats over immigration.

But Asian shares remained resilient overall while U.S. bond yields continue to rise as investors saw limited economic fallout from the standoff in the U.S. capital.

European stock futures are mostly opening slightly higher, with Dax futures up 0.2 percent, and France’s Cac futures up 0.05 percent. Britain’s FTSE futures are down 0.1 percent.

“After all, people know this is just a political show. Neither Republicans nor Democrats can afford to keep dragging their feet for long ahead of mid-term elections this year,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

MSCI’s broadest index of Asia-Pacific shares outside Japan managed to erase slim losses earlier to eke out gains of 0.1 percent, hitting a record high for six days in a row. Japan’s Nikkei also ended up 0.03 point.

U.S. S&P500 mini futures dipped just 0.1 percent, still clinging near a record high hit on Friday.

A U.S. government shutdown will enter its third day on Monday as Senate negotiators failed to reach an agreement late on Sunday to restore federal spending authority and deal with demands from Democrats that young “Dreamers” be protected from deportation.

The Senate set a vote for 12 p.m. (1700 GMT) on Monday on advancing a measure to provide temporary government funding through Feb. 8, end the shutdown and allow hundreds of thousands of federal employees to return to work.

But it was unclear whether there would be enough Democratic votes on Monday to advance a temporary spending bill.

While many see minimal impact on the economy from a short-term government shutdown, analysts say a prolonged stalemate in Washington could dampen investors’ confidence in U.S. assets.

“The markets had not expected this shutdown. Given that U.S. share prices have rallied strongly since the beginning of the year, we have to see if this event is a trigger to change the market trend,” said Takafumi Yamawaki, head of Japan fixed income research at JPMorgan Securities.

Yamawaki noted that during previous government shutdowns – two in 1995 and one in 2013 – U.S. bond yields have tended to slip in the first few weeks after the closure.

But so far U.S. Treasuries yields have risen despite the government shutdown, extending their uptrend since September.

The benchmark 10-year yield rose to as high as 2.672 percent, its highest level in 3-1/2 years. A clear break above its double top marked in December last year and March could signal a further rise in the yield, analysts say.

In the foreign exchange market, the dollar’s index against a basket of major currencies dropped about 0.2 percent from late last week to 90.465, not far from three-year low of 90.104 touched on Wednesday, before edging back to 90.63.

The euro opened the day 0.4 percent higher at $1.2275, but it stopped short of testing Wednesday’s three-year peak of $1.2323 and pared back much of the gains to trade at $1.2225.

The common currency was also helped after Germany’s Social Democrats (SPD) voted on Sunday to begin formal coalition talks with Chancellor Angela Merkel’s conservatives, moving Europe’s economic powerhouse closer to a stable government after months of political deadlock.

The safe-haven Swiss franc gained 0.3 percent to 0.9619 franc per dollar. It hit a four-month high of 0.9536 to the dollar on Friday.

The Japanese yen was little changed at 110.83 yen to the dollar, not far from Wednesday’s four-month high of 110.19.

The South African rand was the biggest mover in Asian trade, rising almost 1 percent at one point to 2-1/2-year highs of 12.0825 per dollar.

Leaders of South Africa’s ruling African National Congress (ANC) met on Saturday to outline the party’s program for the coming year amid reports that its executive planned to force Jacob Zuma to quit as the country’s president.

Moving in the opposite direction, the Turkish lira eased 0.6 percent to 3.8280 after Turkey’s army and rebel allies battled U.S.-backed Kurdish militia in northern Syria, in a campaign that has opened a new front in Syria’s civil war.

Oil prices ticked up, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies in an effort to prop up the market would continue beyond 2018.

Brent crude futures were at $68.75, up 0.2 percent, from their last close. Brent on Jan. 15 hit its highest since December, 2014, at $70.37 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $63.53 a barrel, up 0.3 percent from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Jan. 16.

Entertainment & Art

Rarest White Diamond Ever To Be Sold In London

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LONDON – A flawless diamond, the size of a large strawberry, is expected to fetch a world record price when it comes to market at Sotheby’s in London this month.

Weighing just over 102 carats, the round, brilliant white stone is smaller than a 118-carat oval diamond sold in Hong Kong in 2013, which currently holds the record price per carat.

But Sotheby‘s, which also handled that Hong Kong sale, expects the smaller stone’s rarity and high quality will see it attract an even higher price.

Slideshow (5 Images)

“That (stone sold in Hong Kong) fetched $260,000 a carat, currently the world record for any colorless diamond. This one being a round brilliant cut – the asking price will be north of that,” Patti Wong, chairman of Sotheby’s Diamonds told Reuters.

The diamond is the only stone over 100 carats to have been given the highest grades in every criteria by the Gemological Institute of America, which judges a precious stone’s quality, Sotheby’s said.

It has not disclosed the asking price for the stone, which will be sold in a private sale.

(This story corrects weight of other diamond to 118, not 163, carats in second paragraph and specifies throughout this is private sale, not auction.)

Writing by Mark Hanrahan in London;

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Rarest White Diamond Ever To Be Auctioned In London

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LONDON – A flawless diamond, the size of a large strawberry, is expected to fetch a world record price when it goes on sale at Sotheby’s in London this month.

Weighing just over 102 carats, the round, brilliant white stone is smaller than a 163-carat oval diamond sold in Hong Kong in 2013, which currently holds the record price per carat.

But Sotheby‘s, which also handled that Hong Kong sale, expects the smaller stone’s rarity and high quality will see it attract an even higher price.

Slideshow (5 Images)

“That (stone sold in Hong Kong) fetched $260,000 a carat, currently the world record for any colorless diamond. This one being a round brilliant cut – the asking price will be north of that,” Patti Wong, chairman of Sotheby’s Diamonds told Reuters.

The diamond is the only stone over 100 carats to have been given the highest grades in every criteria by the Gemological Institute of America, which judges a precious stone’s quality, Sotheby’s said.

It has not disclosed the asking price for the stone, which will be sold in a private sale.

Writing by Mark Hanrahan in London;

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Israeli Archaeologists Unearth 1800-year-old Mosaic

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CAESAREA, Israel – A 1,800-year-old mosaic of toga-clad men dating back to the Roman era has been unearthed in Israel, archaeologists said on Thursday.

The mosaic was discovered during the excavation of a building from the Byzantine period – some 300 years younger than the mosaic it was on top of – in the coastal city of Caesarea.

“The surprise was actually that we found two beautiful monuments from the glorious days of Caesarea,” Peter Gendelman, co-director of excavation for the Israel Antiquities Authority, told Reuters of the building and mosaic.

Caesarea was a vibrant Roman metropolis built in honor of Emperor Augustus Caesar by King Herod, who ruled Judea from 37 BC until his death in 4 BC.

Slideshow (5 Images)

The excavated portion of the mosaic, which the antiquities authority said was 3.5 meters by 8 meters in size, depicts three toga-clad men, as well as geometric patterns and an inscription in Greek, which is damaged.

If the mosaic came from a mansion, the figures could have been the owners, or if it was a public building, they may have been the mosaic’s donors or members of the city council, Gendelman said.

The mosaic was of a high artistic standard, with about 12,000 stones per square meter, the antiquities authority said.

Israel is undertaking the largest conservation and reconstruction project in the country in the Caesarea National Park, the antiquities team said. The project aims to reconstruct a Crusaders-era bridge.

Reporting by Rami Amichai; Writing by Mark Hanrahan in London;

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