Nikkei and Yen Extend Their Impressive Post-Election Gains
The book of AI moves to a new chapter: a debt boom
Key Takeaways
Crucial Data Releases This Week: As we head into tomorrow’s crucial nonfarm payroll report for January, perhaps some commentary on the state of the U.S. labor market would be useful. The consensus is around +70k, but there is one forecaster calling for -10k — which is likely what it would take to reignite a rally in the bond market. What could well be at play behind a weaker-than-expected number is the revamping of the BLS Birth-Death model. Today’s retail sales data for December are key, and there is upside risk to this number from the credit card binge — but the incoming data show an early-year hangover in January.
Consumer Sentiment Remains Extremely Depressed: To put the 57.3 preliminary headline UMich consumer sentiment index for February into its proper context, the long-run average of this series is 84.7. We are still around -27 points below that norm. Not only that, but 57.3 is actually at, or even below, the levels that defined each of the past eleven recessions going back to 1953, with only two “head fakes” along the way. Nothing here to cause us to change our macro view.
Japanese Equities Continue Their Winning Streak: Not much action in the U.S. equity futures pits or the European market, either, but the savory lingering aftertaste from the impressive Takaichi electoral victory sent the Nikkei 225 up by a further +2.3% today, and it is now up nearly +15% for the year. Sector-wise, Japanese banks, retailing stocks, and defense contractors stand to benefit the most.
