One Minute Macro Update

US:  Futures mixed in the early going as yesterday's Fed left little doubt that QE2 will remain firmly in place.  With no dissenters to the policy and the only nod to inflation a note that "commodity prices have risen" the Fed seems entrenched in their game of chicken between commodity price inflation and labor market inflation. 

Europe:  Eurozone Jan Business Climate 1.58 v 1.34E, Consumer Confidence -11.2 v -11.2E.  El Pais report on mortgage foreclosure claim that could have far reaching impacts.  The court ruled that proceeds from a sale are sufficient to erase the debt owed on a mortgage and that no further claim can be made by the bank.  ECB making hawkish comments on "imported inflation" as S&P states they see the peripherals trapped in recession.  Late day yesterday Trichet commented on the possibility that the EFSF could purchase bonds (if so allowed by various participating governments).  With elections coming up in Germany and Ireland, such talk might be dealt a degree of doubt.      

Asia:  Japan cut to AA- (stable) by S&P as the agency notes that the country lacks a sufficient plan to address the massive debt load of the country, which exceeds 225% debt/GDP.  Japan has historically been able to finance its debt internally, but the demographic shift in its population will likely force Japan into the global markets in the years to come.  China 7D repo rate +53bp to 8.53% as funding continues to be pressured for the New Year.  AUD PM Gillard stating that flooding could shave 0.5% off of GDP.  RBNZ left rates unchanged. 

From Brian Yelvington of Knight Capital

Comments

[99er]

Dow Futures

Wolfe Wave in the works?

Daily    http://99ercharts.blogspot.com/2011/01/ym_27.html

Hourly  http://99ercharts.blogspot.com/2011/01/ym_168.html

http://www.zerohedge.com/forum/99er-charts-0

[6 String]

Asia is the real macro story for the day. Japan will go down before the U.S., putting a bid on the U.S. fiat system....one last time. Gold and Silver are down on the Japanese news, USD is showing strength.

Which, ironically, makes no sense over the intermediate time frame. Japanase prisoners of the Yen, blinded by fear and stupidity, should be running to precious metals today. But this is what Faber was warning about over the next few months, short-term oversold U.S. paper, reflation trades in the short-term ahead of themselves, and all goes bananas for awhile.

[Cdad]

6 String,

Hey, you and I agree on something.  The totally depraved USD stud man is going to burst out of L. Blankfein's office and have his way with everything alive.  Considering how poorly the stud is being treated by L Blankfein and Ben Bernanke, it is ILLOGICAL that it would rise...BUT it is a perfectly logical catalyst to kick of the much overdue correction in equities.

It is going to happen.