The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Australia announced a much better than expected jobs report and triggered a rally in Asian stocks. They added 35.2k jobs in Dec vs expectations of 10k. Adjusting for population size, it would be the equivalent of the US adding almost 500k jobs. “We will do whatever it takes” said the Greek PM ahead of the announcement of their deficit cutting plans to the EC tomorrow. The Greek bond market has no faith though as yields in their 10 yr are rising another 9 bps to 5.96%, a 10 month high and their 5 yr CDS is rising to a record high at 328 bps, up almost 50 bps over the past 2 days. In trying to glean evidence from Fed members about what they will do with their MBS purchase plan, Fed Pres Dudley last night said an end will have “a relatively small effect on the level of mortgage rates, something on the order of .5 to .25%.” We all know if that estimate proves too low, the Fed will be back. Dec Retail Sales are key today.