The market reaction to this morning’s jobs numbers is actually more interesting than the numbers themselves. Unlike other days this week when good economic numbers have pushed stocks and bonds downward–because the good news raised fears that the Federal Reserve might decide to begin to taper off its $85 billion in month asset purchases early—today’s good news is being treated as good news for the financial markets.
Today’s release of revised third quarter GDP growth is frustratingly inconclusive—if you’re looking for, as the market is, a strong trend that might indicate which way the Fed will jump on the taper/no taper decision at its December 18 meeting
Today’s private company jobs survey from ADP, showing a gain of 215,000 jobs in November, has raised worries that the official U.S. government jobs numbers due on Friday will be stronger than expected and lead the Federal Reserve to begin tapering off its $85 billion a month in asset purchases at its December 18 meeting
The yen is taking a bit of a breather today after hitting a six-month low against the U.S. dollar yesterday. Today’s slight rise in the yen—0.57%–takes the yen to 102.37 to the dollar. Japan’s currency is down 14% for 2013 against the U.S. dollar.
The news on Iran has led to selling of Japanese yen, oil, and gold as investors and traders have decided that the world isn’t as risky a place as it was just a few days ago. The Japanese yen, the world’s favorite safe haven currency, fell 0.45% against the dollar to 101.71. West Texas Intermediate fell 0.89% to $94 a barrel and gold declined 0.17% to $1242 an ounce.
Headline inflation fell 0.1% in October and core CPI was lower than economists expected. In other words there’s nothing in even the core inflation numbers to push up the Fed’s schedule for beginning to taper off on its asset purchases.
This week is jammed with Fed news and speeches. We’ve got chairman Ben Bernanke speaking tonight at 7 p.m. Eastern at the National Economists Annual Dinner. And then three Fed governors talk by November 22. But the big event is tomorrow’s release of the minutes from the Federal Open Market Committee’s October meeting. Markets will be slicing and dicing those minutes for clues on the Fed’s thinking.
Remember when developing economy currencies and emerging market stocks fell as bets that the Federal Reserve would begin to taper off its $85 billion in purchases of Treasuries and mortgage-backed assets sooner rather than later caused the U.S. dollar to climb? Here we go again
