There has been a lot of action overnight as traders digest the ramifications of the monetary decisions made by five central banks this week. First of all, emerging market action overnight reminds us of what monetary policy moves mean for confidence. TRY has continued to retreat overnight as the massive interest rate hike by Turkey’s central bank has increasingly been seen as a panic move that could do more damage to the country’s economy. On the other hand, Brazil’s central bank has done nothing this week and BRL has soared after the country reported a better than expected unemployment rate, pulling other Latin American currencies like MXN and CLP along for the ride. This action shows that part of the job of a central bank is to build and maintain which is why the unfolding problem in emerging markets made it more important for the Fed to keep tapering this week, not less. Remember that normally tightening interest rates is seen as a sign of strength and emergency easing moves as a sign of weakness. Turkey’s rate hike was unusual in that it was currency driven, which the street clearly has seen through with TRY continuing to weaken. The other big move in forex overnight has been a big selloff in NZD. The RBNZ has been one of the most openly hawkish central banks of late but held off in raising interest rates last night, indicating it plans to start raising rates soon. This caused traders who had been speculating on a more hawkish RBNZ to scramble to get back on side sending the Kiwi to the bottom of the pack. Asia Pacific stocks sold off overnight heading into Chinese New Year holidays for some markets following yesterday’s US selloff. Confirmation of a contraction in Chinese PMI didn’t help matters and dragged copper down again. In Europe indices have been mixed with better than expected German employment data offset by soft inflation suggesting the ECB may remain on hold for some time. EUR has also weakened moderately today. Yesterday’s FOMC decision to taper for the second meeting in a row indicated to the street that it likely intends to pursue a consistent program of regular cutbacks to QE this year unless something really major happens to derail it. Today’s US in-line GDP and slightly worse than expected jobless claims have done nothing to change that. Anticipation of ongoing tapering has boosted USD to the top of the charts with AUD, CAD and GBP the only currencies to somewhat hold their own against the rally. Defensive plays like gold, CHF and JPY, meanwhile, have been getting slammed due to the combination of USD strength and reduced emerging market fears provided by the Brazilian jobs data. US indices have rebounded a bit to start the day but so far this appears to be a normal technical rebound on short covering. Having soared over 10% to a new high yesterday, natural gas could be particularly active surrounding today’s storage report. Later today the monthly basket of Japanese indicators are due which could impact trading heading into the weekend. Corporate News Potash $0.26 vs street $0.33, guidance $0.30-$0.35 vs street $0.45, 2014 full year guidance $1.40-$1.80 vs street $1.95. Facebook $0.31 vs street $0.27, mobile advertising $1.24 beats street and reaches 52% of total advertising revenue Symantec $0.51 vs street $0.43 Qualcomm $1.26 vs street $1.18, guidance $1.15-$1.25 vs street $1.27 Citrix Systems $1.04 vs street $0.98, guidance $0.57-$0.60 vs street $0.69 Lam Research $1.10 vs street $1.03, guidance $1.10-$1.20 vs street $1.10 ExxonMobil $1.91 vs stret $1.91 ConocoPhillips $1.40 vs street $1.30 Occidental Petroleum $1.72 vs street $1.68 Visa $2.20 vs street $2.16 PulteGroup $0.57 vs street $0.45 Whirlpool $2.97 vs street $3.02 Economic News Significant economic announcements released yesterday afternoon and overnight include: US Q4 GDP 3.2% as expected vs previous 4.1% US Q4 PCE inflation 1.1% as expected vs previous 1.4% Brazil unemployment rate 4.3% vs street 4.4% vs previous 4.6% Spain GDP (0.1%) as expected vs previous (1.1%) Germany unemployment chnge (28K) vs street (5K) Germany unemployment rate 6.8% vs street 6.9% Germany consumer prices 1.3% vs street 1.5% UK mortgage approvals 71K vs street 72K New Zealand interest rate decision 2.50% no change expected Japan retail sales (1.1%) vs street 3.9% China HSBC manuf PMI 49.5 vs street 49.6 vs previous 50.5 Economic reports due later today include: 10:00 am EST US pending home sales street (0.3%) 10:30 am EST US natural gas storage street (233 BCF)

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