Europe European markets traded flat for most of the day, than rallied into the finish along with their US counterparts. This week, indices have gone down like an escalator then up like an elevator, suggesting that today’s action may be more of a bear market rally than renewed enthusiasm. With the Bank of England shifting toward a more hawkish stance and the ECB continuing to run its stealth tapering program, indices remain vulnerable. Next week’s data from Germany (representing the core of the Eurozone) and Greece (representing the margins) may give a better indication of how much pressure the ECB is under to bring in additional stimulus measures beyond last month’s interest rate cut. US US indices spiked up on the open today but then have leveled off as the US nonfarm payrolls report sparked a round of short-covering ahead of the weekend. Trading action suggests that the declines of recent days had already priced in a strong report and perhaps even higher expectations. 200K jobs and the unemployment rate falling to 7% while positive, may not be enough to increase tapering speculation beyond what it is currently. Speculation about what the Fed may do at its meeting that ends on Dec 18th may continue to influence trading over the next ten days. FX After a brief downdraft, EUR resumed its primary uptrend on Friday. While the US talks and talks about tapering, the ECB has been walking the walk with European banks set to repay another €7 billion in LTRO loans this week. Meanwhile new large scale QE or LTRO type programs have been essentially ruled out unless another major crisis flares up by yesterday’s comments from ECB President Draghi about needing to show the money will help the economy not subsidize the banks. CHF and GBP have also been climbing against the greenback today. This week’s positive economic numbers have improved the outlook for commodities into 2014 which continues to boost resource currencies. Today NZD and AUD have been rebounding while CAD has been flat after Canadian job growth turned out to be driven more by the part time side. Defensive havens continue to lose popularity with JPY resuming its downward course while gold and silver have been flat on the day. Commodities The influence of weather and economic growth on demand continues to drive action in commodities. The top performers today have been natural gas which has attracted interest with another big storm rolling through the US heralding an early arrival for winter this year. Dr. Copper, meanwhile, continues to rally as the prospects for the global economy and resource demand continue to improve. Crude oil and gasoline also continue to climb but at a slower pace.

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