Or, as the old-timers used to say: "Buy on mystery, sell on history."
From Marc Chandler at Bannockburn Global Forex:
Overview: The focus is on the US employment report today to culminate the week that has seen a sharp backing up of interested rates, egged on by what were seen as hawkish FOMC minutes. US equities, especially the high-flying tech sector, slumped amid the rising interest rates. US shares pared losses late yesterday and those constructive impulses carried over into Asia Pacific trading today. Although Japan and Taiwan markets fell, Hong Kong, South Korea, and Australia's bourses advanced by more than 1%. India is the big winner of the week, with its leading indices up over 2%. Europe's Stoxx 600 is a little heavy today but is practically flat on the week. US futures are a little firmer. The US 10-year yield is around 1.72%, up about nine basis points this week. European yields are firmer, and core-peripheral spreads are widening. This week, the Italian yield is up around nine basis points, while the yield on the German bund has risen six. Gilts and Greek yields are up 18-19 bp this week. The dollar is softer against most of the major currencies today, but the Australian dollar and Japanese yen. On the week, the Antipodeans have borne the brunt of the greenback's gains, falling 1.1%-1.5%. Sterling is the only major currency to be eking out a small gain (~0.1%). Emerging market currencies have fared better than many would have expected given the rise in US yields. The JP Morgan Emerging Market Currency Index is edging higher for the second day and is paring its losses to about 0.1%. Gold is off 2% this week to end a three-week rally. It is near yesterday's lows around $1790. Oil is firm, with February WTI a little above $80, representing almost a 6.8% advance this week. In late October it peaked a little over $82. US natgas is firm and is up about 3.75% this week, the most since late November. Europe's natgas is giving back yesterday's 2% gain but is still up almost 45% this week. Iron ore was softer in China today and gained about 5.2% this week. Copper is heavier and is closing in on a 1.75% weekly loss, its first in five weeks.
Asia Pacific
Although the Japanese economic recovery is intact, today's November household spending and income data disappointed. Consider that economists (median in Bloomberg's survey) expected household spending to rise 1.2% in November after falling for the past three months on a year-over-year basis. Instead, it fell by 1.3%. This seemed before the surge in the Omicron virus, and perhaps one of the headwinds came from the fact the real labor earnings fell for the third consecutive month and the 1.6% was larger than any economist in the Bloomberg survey anticipated. It was the worst since December 2020. Separately, Tokyo reported December core CPI (excludes fresh food) rose by 0.5% in December, the highest since February 2020.Australia's largest state, New South Wales, which includes Sydney, is re-imposing social restrictions as Omicron surges. The social restrictions will run through at least January 27. Although Omicron is proving less fatal, the sheer number of infections is very disruptive, taxing health care systems where many care givers themselves are sick. Similarly, the disruption of airflights is similar. In this respect, it is different than a year ago. Learning to "live with Omicron" makes for a nice slogan, but the economic and social disruption is more than many expected....
....MUCH MORE
