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One Minute Macro Update

Tyler Durden's picture




 

US:  Markets modestly positive in the early AM.  Yesterday’s claims numbers were roughly in line with expectations and expectations for today’s Payrolls data have been modestly upgraded from the pre-ADP expectations.  ISM showed progress as did Nonfarm Productivity, while Unit Labor Costs indicated the divergence between commodity price inflation and labor price inflation (or lack thereof).  Bernanke’s speech yesterday provided a few great tidbits, including the dovish outlook predicated on the Fed’s expectation of low inflation and high unemployment.  After emphasizing that expectation, the Chairman stated, “Under such conditions, the Federal Reserve would typically ease monetary policy,” via the Fed Funds rate.  Though the statement was seemingly later couched in the context of asset purchases, it does seem like strong language.  For the inflationary hawks – especially those abroad who are concerned with the US ‘exporting inflation’ – the Chairman offered that higher “visible” prices (notably for gas) were results of “very strong demand from fast-growing emerging market economies, coupled, in some cases, with constraints on supply.”  Inflation is apparently someone else’s problem.

Europe:  Today brings the unscheduled but widely anticipated talks on EFSF expansion into bond purchases as well as the “Pact for Competitiveness”.  Headlines are likely to be fast and furious following the scheduled energy summit, which contains only a commitment to find an agreement at next month’s summit.  Early press reports indicate that an expansion/enlargement is in the cards, but with no details on financing.  Yesterday’s commentary from Trichet was decidedly less hawkish/more dovish than expected.  UK Future Inflation December 103.9 v 103.3 prior, a five month high.  UK home prices (Halifax) +0.8% MoM v -0.3%E.  EU harmonized CPI -1.2% MoM v -1.3%E, 2.4% YoY v 2.2%E.

Asia:  RBA outlook very positive as the policymaker noted it would look past the flood impacts and concentrate on the medium term outlook for the economy.  Asia still shut for holiday calendar.

From Brian Yelvington of Knight Capital

 

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Fri, 02/04/2011 - 08:42 | 934171 Azannoth
Azannoth's picture

BB - Inflation ? What inflation ?

Fri, 02/04/2011 - 09:11 | 934191 More Critical T...
More Critical Thinking Wanted's picture

For the inflationary hawks – especially those abroad who are concerned with the US ‘exporting inflation’ – the Chairman offered that higher “visible” prices (notably for gas) were results of “very strong demand from fast-growing emerging market economies, coupled, in some cases, with constraints on supply.”  Inflation is apparently someone else’s problem.

Guys, you post this kind of innuendo (and outright accusations) with absolutely no proof offered that there's a link between QE2 and global (non-US) commodity price inflation.

Be a man and prove what you claim ... :-)

US demand is still on the low side and as described in this very article wages are not inflating up (wages are inflexible prices), so the US is probably a net inflation lowering force in the global supply & demand picture.

Countries driving up prices are those with high demand for sugar (India) high demand for iron ore or oil (China) and other commodities - and of course tight supplies due to bad weather and other supply side factors.

Check the WTI/Brent spread for heaven's sake - it's been featured on ZH prominently. Does 10 dollars cheaper US oil really tell you that "the US is driving up prices!"? :-)  Does it not tell you that Europe has stimulated its economy out of the recession more effectively than the US and has thus higher demand for North Sea oil? (coupled with the fact that Brent supplies are slowly but surely fading due to peak oil.)

So yes, this notion is ridiculous and unproven, and the facts are showing the opposite - so you are (probably unknowingly) playing the GOP's playbook to blame Obama and Bernanke for everything - but it gets repeated again and again by ZH which dilutes ZH's quality as a factual, fair source of useful information.

(And yes, I'm willing to check any actual hard data and theory that proves a causal link and I'm willing to change my opinion based on such data. All data is showing the opposite though - both current and historic data.)

It's fashionable here to bash Obama and Bernanke for absolutely everything, but could you please apply at least a little bit of critical thinking before you parrot yet another GOP talking point?

 

Fri, 02/04/2011 - 11:47 | 934855 Grand Supercycle
Grand Supercycle's picture

As mentioned numerous times, EURO downside and USD upside will keep recurring.

Please be careful as it should affect some commodity prices.

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