Recap 12-12-13


2014 Trade ideas will be published separately.


  • Stanley Fischer may be named Deputy Fed Chairman. This quote of his is getting a lot of attention: "You can’t expect the Fed to spell out what it’s going to do. Why? Because it doesn’t know. We don’t know what we’ll be doing a year from now. It’s a mistake to try and get too precise.”
  • US Retail Sales rose 0.7% MoM in Nov vs 0.6% exp. The control group was also string, rising 0.5% vs 0.3% exp
  • US Jobless Claims rose to 368k vs 320k exp and 298k prev. Seasonality effects around Thanksgiving likely had an impact again
  • US Import Prices declined -1.5% YoY. Imports have been deflationary for about a year and a half now, the longest stretch since 2001-2002.
  • Australia Employment rose to 21k in Nov vs 10k exp and 1.1k prev. The Unemployment Rate ticked higher to 5.8% as exp vs 5.7% prev, with the participation rate stable.
  • RBA governor Stevens said that he wants AUDUSD to be closer to 0.85. He also indicated the central bank is having an internal debate about whether to follow New Zealand and Canada into adopting so-called macro-prudential tools. But Mr Stevens pointed to ­problems with such regulatory inter­ventions, downplaying the idea that they could be on the Reserve Bank’s agenda for 2014 to help revive the soft economy. While he indicated he remains comfortable with recent gains in house prices – rejecting arguments they point to the start of a leverage-fuelled asset bubble – Mr Stevens acknowledged the surge of investment buying in Sydney’s property market was something “we need to think about.” “To the extent that we get some more easing in financial conditions, at this point it’s probably more preferable for that to be via a lower currency at the margin than lower interest rates,” he said –AFR
  • The ECB may impose higher capital charges on sovereign bond holdings. Praet said the move would make banks “less likely to use central bank liquidity to buy yet more government debt.” The ECB wants to ensure its liquidity is being used for lending into the “real economy” as mentioned by Draghi last week: “if we are to do an operation similar to the LTRO, we will want to make sure that this is being used for the economy. And we will want to make sure that this operation is not going to be used for subsidizing capital formation by the banking system under these carry trade operations.”

Upcoming Data:

  • Fri: US PPI,
  • Mon: Japan Tankan, China Flash Mfg PMI, EU PMI, US Empire Mfg, Prelim PMI
  • Tue: UK PMI, GermanyZew, US CPI, NAHB Housing Index, Japan Trade Balance
  • Wed: German IFO, MPC Minutes, UK Jobless Claims, US Housing Starts, FOMC, RBA FX Transactions
  • Thu: UK Retail Sales, US Philly Fed, Existing Home Sales, GfK Consumer Confidence