Central bank season starts
- The Bank of Japan met, and did nothing that is worth mentioning. The Bank of Japan has had a lot of practice at doing nothing worth mentioning. The Bank of Japan is alone of the major central banks in keeping an easy policy. Whether removing liquidity supply when liquidity demand is falling is a tightening is debatable, but the Bank of Japan is not even contemplating that.
- Japanese industrial production fell (or as the government says, the trend is "picking up slowly"). This may reflect a refocus of China's economy onto domestic growth. Unemployment picked up but this is not an especially worrying signal.
- US personal income and spending data are due. Personal income is a better measure than average hourly earnings, as it captures the trend toward self-employment income. Spending is boosted by the tax cuts (partly directed to imports). The Trump consumer tax increases on trade take time to change prices, and should not yet affect spending.
- The Euro area offers inflation and unemployment data. We know what the ECB plans to do for the next year - there is no fun second guessing – and ECB President Draghi is likely to stick to that even if inflation exceeds target.