January 8. NFP today.
* BoC’s Poloz: we’re expecting the world economy to continue to gather strength
http://www.reuters.com/article/idUSS0N14P00120160107
Yeah…like a hurricane. At least Canada’s central banker has his finger on the pulse of the global economy.
–Here’s another headline, from BBG: CHINA LOCAL GOVTS MAY SELL 1T Yuan NEW DEBT THIS YEAR: INFO DAILY.
To who?
–Previously I thought yuan devaluation would export deflation to the rest of the world. But its bigger than that, it’s exporting financial instability. All of the Fed’s and ECB’s (and BoC’s) communication efforts fall short in the face of such turmoil. CB’s can only respond to incoming data. Which will be further muddled by increased prospects of military conflict. Global trade has been declining, and with that goes global cooperation.
–Since the end year, EDH17 has rallied 19 bps and EDH18 24.5 bps. Essentially lopping off one 25 bp rate move. All of the near euro$ calendar spreads notched new lows yesterday, with EDH6/EDM6 for example, at just 12 bps. The peak one year spread, EDM16/M17 is barely holding above 1/2% at 53 bps, down 3 yesterday. I don’t care how many times analysts say the Fed is hiking 3-4 times this year. The market isn’t having it.
–Employment day with NFP expected 200k and Avg Hourly Earnings +0.2%.
