Breaking

Very disappointing CPI / PPI numbers from China. Some are arguing that reflation is about to occur, but however you look at it, the view that the economy had bottomed 6 months ago is clearly not correct. With deflation now a problem, the authorities still trying to support a dying real estate market, and a leadership now cosying up to the West (or rather the tech companies in the US),  there looks to be further downside both economically and politically.

Moody’s Cuts China Credit Outlook to Negative on Rising Debt [Bloomberg]

Chinese borrowers default in record numbers as economic crisis deepens [FT]

Japan

Nikkei slides as BOJ talks pivot

‘Too Tricky to Trade’: Yen Watchers Brace for Even Wilder Swings [Bloomberg]

The world's third biggest economy seems to have lurched to a halt. Six months ago we were looking at inflation high enough to come off the easy money policy but now inflation is easing and GDP collapsing. At debt of well over 200% of GDP and GDP declining and a population aging, it's hard to see a way forward.

United States Bond Auctions

Markets are more sensitive to US Govt debt at the moment than anything else. That includes positives as well as negatives.

What to look for this week ?

10 and 30 year bonds. Remember the paused auctions when UST 10  year hit 5%. They're back

Term and Type of Security
29-Year 11-Month 4-3/4% Bond (Reopening)
Offering Amount $21,000,000,000

Term and Type of Security
9-Year 11-Month 4-1/2% Note (Reopening)
Offering Amount $37,000,000,000

Check out the schedule at TreasuryDirect [US Govt]

In The Background

Americans broke a record for spending on Black Friday, but it's just hiding a bigger problem for the economy [Business Insider]

US job openings drop to lowest level in more than 2 years [FT]

Headline said better (stronger) than expected but breakdowns said neutral. Unemployment rate at 3.7% will make it difficult to see imminent rate cuts.

Dutch election: Anti-Islam populist Geert Wilders wins dramatic victory[BBC]

In Case You Missed It

More pain for European retailers.

The powerhouse of Europe runs out of steam

Recession now imminent for all of Europe

And German CPI is coming down but it's still way too high.

Australia

RBA holds rates. Despite Bullock's hawkish rhetoric, cash rate stayed at 4.35%. 

Rather than the very polarised view of the US economy, high GDP and slowing inflation, and the growing worries about China and Japan, here in Australia everything is muddled.

With no political leaders anywhere in sight, we'll just live in the sun and continue being unproductive.

The currency has appreciated recently as the USD dropped and the market has cut some of it's short positions.

This Week's Important Economic Indicators [London time]