Initial jobless claims fell 10k w/o/w to 258k which brings the 4 week average to 253k from 252k last week as a 254k print drops out of average. Continuing claims fell by 79k to just off the lowest since 2000. Bottom line, the story remains the same in that the pace of firing’s remains modest.
The ECB taper has begun, maybe, maybe not? They will extend QE until December, 3 months longer than anticipated but are reducing the monthly amount by 20b euros to 60b. The ECB will added 180b extra euros of purchases in those last 3 months of the year but buy 120b euros less than expected for those thinking we’d only see a 6 month extension. Will they even make it to December 2017? It will depend on the direction of inflation. Bottom line, the pace of buying slows but goes on for longer than expected.
The November Chinese trade data was better than expected. Exports in dollar terms rose .1% y/o/y which was well above the forecast of a 5% drop. Exports rose 6.9% to the US and 5.1% to the EU but were mixed in Asia. Imports grew by 6.7% y/o/y instead of falling by 1.9% as estimated. On a commodity volume basis, imports rose for coal, crude oil, refined products, iron ore, steel, soybeans and copper. Bottom line, I’m sure the weaker yuan helped to lift exports and many imports of parts are used in those exports. Also higher commodity prices on the increase in volume gave a boost to imports. Hopefully also we’ve seen the end to the slowdown in global trade but I do have to include this anecdotal story I got last night from a friend whose US company utilizes Chinese manufacturing. Please take this with a large grain of salt since I don’t have all the details. That Chinese company canceled all its orders with my friend’s company this week (long lead times needed) claiming uncertainty with potential US trade policy towards China. Maybe it was scrutiny over yuan outflows instead or something else but this is something I’ll be paying attention to.
What a difference a month and an election makes. One month ago today was election day and the CNN fear/greed monitor stood at 26. Today it is 84: