The Reserve Bank of India held rates steady. Japan’s Q3 GDP was revised even lower than originally reported, to -0.7%. Asian markets were mixed. The Nikkei 225 fell another -1.68% but the Shanghai Composite moved up +0.11%. European markets strengthened. The DAX Index rallied +0.78%. 10-year bunds yield 2.279%. November Nonfarm Payrolls rose a solid +199K compared to +183K expected (thanks in large part to the return of formerly striking auto/movie workers), the Unemployment Rate moved down to 3.7% vs. 3.9% expected, Average Hourly Earnings rose a robust +0.4%, and the Workforce Participation Rate edged up to 62.8%. Preliminary December Consumer Sentiment from the UMich printed at 69.4, well beyond 61.9 expected, and the year-ahead inflation expectations print was 3.1% vs. 4.2% expected. 10-Year Notes yield 4.233%. The December US$ Index added +0.44% to 103.960. January Crude Oil jumped +2.7% (U.S. wants to buy 3M bbls for SPR) to $71.23. February Gold lost -1.50% to $2,015.80. The ES opened slightly lower but quickly found support. It briefly went negative then soon recovered to start an upwards march, hitting an intraday high and closing firmly higher.

China’s November trade surplus widened as exports rose and imports fell. The BoJ is suggesting their negative rate policy could be over, with markets pricing in 50% odds of a December hike. Asian markets were lower. The Nikkei 225 slumped -1.76% and the Shanghai Composite edged down -0.09%. European markets slipped. The DAX Index dipped -0.16%. 10-year bunds yield 2.197%. For 12/02 Initial Claims (seasonally adjusted) ticked up from 219K to 220K, vs. an expected print of 222K, but non-seasonally adjusted claims spiked upwards to 293.5K. October Consumer Credit printed at $5.2B vs. $9B exp. and preliminary Wholesale Inventories fell by -0.4% vs. -0.2% estimated. November Challenger Job Cuts moved up from 36,836 to 44,510. 10-Year Notes yields 4.145%. The December US$ Index sank by -0.49% to 103.595. January Crude Oil ticked -0.1% down to $69.34. February Gold was quietly lower by -0.1% at $2,045.60. Hawkish sentiment re a Japanese rate hike (although much skepticism exists) on Dec 19 sent JGB yields spiking 12 bps and their stocks lower. US markets opened stronger, rallied, came back to the open pricing, then rallied again to close firm.

Japan’s December Reuters Tankan survey of large business sentiment improved for the second month in a row. The Nikkei 225 bounced back +2.04%, the Shanghai Composite slipped -0.11%. European markets gained. The DAX Index hit a 4-mo high, up +0.75%. 10-year bunds are 2.201%. For 12/02 the MBA Mortgage Applications Index rose +2.8% on strong refinancings spurred by lower rates and EIA Crude Inventories fell -4.6M bbls, from +1.6Mbbls prior. Q3 Nonfarm Productivity was revised up to +5.2% (highest since Q3 2020) vs. +4.8% exp., and Unit Labor Costs were revised down to -1.2%. The October Intl Trade in Goods and Services deficit widened to $-64.3B. November ADP Employment rose a modest +103K, disappointing vs. +123K exp. (and Oct was revised lower). For the first time in three years hospitality jobs contracted. 10-Year Notes yields 4.117%. The December US$ Index inched up +0.15% to 104.150. January Crude Oil sank -4.1% to a 5-mo low of $69.38. February Gold added +0.39% at $2,044.30. The Bank of Canada kept rates at 5% as expected, but kept door open to tightening. The ES opened stronger but persistently gave up gains to end negative, nearly 40 pts off the day’s high.