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A data Pax Americana

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  • US employment data has, perhaps somewhat mistakenly, been looked to by markets as an indicator of the timing of the Fed's taper (liquidity and employment are not really directly associated). We see a somewhat stronger employment report today, with 190,000 payrolls and 7.0% unemployment.
  • US consumers fared better in the revisions to US GDP data yesterday, with positive revisions to real incomes for Q2 and Q3. This improvement is likely to favour the higher income groups in the US given recent history and the pattern of the labour market, reinforcing the theme of resilient plutocracy.
  • US Michigan consumer sentiment data is due, but as with other sentiment indicators of late has been prone to overreact to the underlying economy. Consumer credit is a little more interesting, perhaps, as credit growth has considerable relevance when considering quantitative policy.
  • There is little to distract in the Euro area in advance of the US data. Nowotny and Asmussen of the ECB are both speaking today, but these two are always speaking and it is very unlikely that they will add anything new to the markets' stock of knowledge.