US: Markets trading with a sour tone this morning, driven once again by macro headlines. Yesterday’s claims data resumed its dire tone as PPI reflected commodity inflation (the bad kind). Today will see a slew of data including CPI, retail sales, inventories, industrial production and capacity utilization – the sum of which should signal whether the 4Q10 upswing was inflation/inventory driven or the result of real demand.
Europe: The back and forth chatter on growing the EFSF continues, with the latest round of noise stating that the facility could be upsized to €1.5T. Reportedly the further backing for the “shock and awe” fund would feature guarantees, rather than cash assistance. This reminds us of the Thomas R. Callahan II quote on such features. Spanish bank ECB borrowings rise to €70B v €64.5B prior. Eurozone inflation indicating a surge in energy prices with December coming in at 2.2% YoY v 2.2%E. Core inflation printing at 1.1%, in line with purported low inflation. EURIBOR tops 100bp as EURIBOR-OIS falls to 31bp.
Asia: China hike on required reserve ratios spooks equities. This is the fourth hike in two months. Wheat production suffering per headlines out of China and Australia. JPY fiscal hawk Yosano appointed as economic minister, lessening the probability of fiscal stimulus for Japan
From Brian Yelvington of Knight Capital
Europe: The back and forth chatter on growing the EFSF continues, with the latest round of noise stating that the facility could be upsized to €1.5T. Reportedly the further backing for the “shock and awe” fund would feature guarantees, rather than cash assistance. This reminds us of the Thomas R. Callahan II quote on such features. Spanish bank ECB borrowings rise to €70B v €64.5B prior. Eurozone inflation indicating a surge in energy prices with December coming in at 2.2% YoY v 2.2%E. Core inflation printing at 1.1%, in line with purported low inflation. EURIBOR tops 100bp as EURIBOR-OIS falls to 31bp.
Asia: China hike on required reserve ratios spooks equities. This is the fourth hike in two months. Wheat production suffering per headlines out of China and Australia. JPY fiscal hawk Yosano appointed as economic minister, lessening the probability of fiscal stimulus for Japan
From Brian Yelvington of Knight Capital
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