US

Clients are to continue to trade the US to the side of relative vigor; that is, any surprises are to be tagged to strength, not weakness.

We have set two anchors for the desk: job-related and consumer activity. Recent data have cooperated fairly well, including the last Payroll print, subsequent claims prints, and of course, consumer activity; witness the holiday brawl to acquire a $2 waffle maker: http://www.twitvid.com/QM7T7.

Friday will see the key Nov NFP report. Jobs activity has been stronger than expected - our prediction - but of course, not absolutely strong.  As we have explained before, an interventionist administration is the key to understanding this reality. The constant threat of regulatory change is the primary retardant to small-business job creation. Now researchers at the Cleveland Fed provide academic support to this otherwise common sense view. "While the downturn and weak recovery certainly had a large negative effect on small business hiring plans, policy uncertainty has exacerbated this effect," researchers Mark Schweitzer and Scott Shane said in their report.

Clients could work our insight in any number of ways; as an illustration, Oct/11 we  recommended owning (L - S) the US term structure, then (5-10, 101 / 2-10, 188 / 2-30, 276).  There was modest expansion early on, but most recent results have been impacted by the world’s flight to sanctuary. Nov/10, the spread at 114, 183, and 289. Last, 108, 176 and 273. Unless one expects a total E-Z meltdown, remain with this or related positions.

Robert Craven