One Minute Macro Update

US:  Following yesterday's mixed to slightly positive action, futures appear poised for a modest rise in the early AM.  Money supply via M2 is beginning to show growth since June after a year's worth of stagnation, fueling some of the inflation and growth expectations that appear to be driving markets on the fixed income and equity sides of the equation.  Yesterday featured slightly more positive weekly jobs data, but investors have learned not to be fooled in the short run as the labor pool is likely to continue to grow faster than jobs growth can absorb it.  Today features potential market moving data in the Trade Balance, Import Price Indices, and Monthly Budget Statement reports.

Europe:  Italy's debt auction of 12M bills cleared +23bp wider than the prior auction with bid/cover at 2.0x (v 2.1x prior).  Italy previously put bond auctions on hold until year end.  Spain and Italy seem weakest in a widening European CDS market this AM.  Germany, the Netherlands, France, Spain, Belgium, Malta and Portugal all have issuance scheduled for next week.

Asia:  China once again hiked the required reserve ratio to a new level of 18.5%, while leaving the policy rate unchanged.  The reserve ratio appears well on its way to 20% in 2011 as China seeks to control inflation with reserves while avoiding policy rate hikes which have a larger impact on its construction/lending boom.  AUD employment numbers continue to show strength, further fueling rate hike chatter.

via Brian Yelvington at Knight Capital

Comments

[TradingJoe]

Something's gotta give in the Land Of OZ!

[youngman]

The Euro zone has been quiet this week.....put to bed...NOT.....with all the bond sales next week I bet they are front and center again next week...We will have a little China excitement on Monday with their interest rate up or no...then off to Europe for the rest of the weeks news...IMHO

[eigenvalue]

China has already raised the reserve rate. Do you think China will imply another tightening measure within 48 hours? I believe not...

[hugovanderbubble]

Monday beautiful day to get short this eternal pump

[hugovanderbubble]

Portugal is in default and need new IMF aid.

Banco Comercial Portugués will be nationalized.

Portugal 2yrs Bonds must hit 12%-15%

[primefool]

All the hedge funds, hedge fund wannbe's, goldbugs, even mom-pop  types who loaded up on gold over the past few months because it looked so easy, so obvious, way to double, nay, quintuple your money.

One question - how many trading days left in the year? Next question - do ya feel lucky?

[Josephine29]

Hi Guys

Just to add some news based on what is happening in the UK. There has been a fair bit of discussing on ZH about inflation performance and issues with the numbers in the United States. Well today the UK Office of National Statistics has had a problem. According to notayesmanseconomics.

This is at best very embarrassing for the Office of National Statistics. It was only last month we found it making methodological changes to its calculations of these numbers and now suddenly it has such problems it cannot publish part of them..........Having looked back at them my estimate of output producer price inflation for November on the old basis is 4.5% or some 0.6% higher than the new measure.

Does manipulating inflation numbers with new systems sound familiar to anyone?

http://notayesmanseconomics.wordpress.com

[Teddy Turner]

Anyone check out Ace Greenberg on CNBC?  What a piece of shit.

[primefool]

Couple of hundred point decline in gold will put it back to where it was in Septmber - of this year. You think that would be outrageous? Out of the question? BTW I dont subscribe to no newsletters - I travel alone - wid ma backpack, ma dawg an ma shot gun.

[unum mountaineer]

wtf? how are my comments no good td?