- US Retail Sales rose 1.2% MoM in Oct vs 0.7% expected and 0.6% previously. The Core measure printed 0.4% vs 0.2% expected and 0.4% previously.
- Empire Manufacturing was pretty ugly, dropping to -11.14 in Nov vs +14 expected and +15.7 previously.
- Irish Officials insisted on Sunday that they did not need fiscal assistance from the EU, even as pressure mounted on Dublin from other EU members and the ECB to accept aid and present plans to restructure its banking system – FT.
- There are strong suggestions that the Irish Budget for 2011 might also be brought forward a week earlier from December 7 to calm the markets, the Irish Independent reports.
- Debt-ridden Greece expects "substantial pressure" from the European Union and the International Monetary Fund this week to adopt further austerity measures, amid expectations that the country will miss its deficit targets – WSJ. Greek PM Papandreou said, for the first time, that repayment of EU financial support may take longer than hitherto expected, Der Spiegel writes, referring to an interview Mr. Papandreou made with the newspaper To Proto Thema.
- Japanese Nominal GDP grew 0.7% QoQ in 3Q vs 0.5% expected an -0.6% previously
- I fiddled around with some USDJPY data today. Based on daily data from the past 10 years, a linear regression with USDJPY as the dependent variable, and the US and Japanese 2 and 10 yr swap rates (so 4 variables in all) had an R squared of over 95% over the past 4 years. The variable with the strongest T-statistic was the US 2yr swap rate. Interestingly, the Yen 2yr swap rate had a positive coefficient with a very statistically significant T-stat of 13.5. This supports the idea that Japanese monetary policy has basically just been a derivative of the Fed’s policies over this time period.
This regression suggests that a USDJPY rally through 87 is likely.