Metrics: European And Canadian

Let's start with Europe, shall we? We've got economic data flowing in from Switzerland, Germany, France, and the EU as a whole.

In Switzerland, seasonally adjusted unemployment remains flat at 3.6% (missing expectations by 10 bps), while non-seasonally adjusted unemployment rises 20 bps to a level of 3.8% (also missing expectations by 10 bps).

Germany's got a ton of data coming out, and it's all bad. First off, their merchandise trade[1] surplus dropped E2.4 billion (brutally missing expectations, which anticipated an increase in the trade surplus to E15.0 billion) to a level of E11.8 billion in November. Imports jumped 380 bps for the month to a level of 4.1%, while exports rose 160 bps to a level of 0.5%. Retails sales fell 250 bps in November, dropping from a revised 0.1% (revised downward from the original 2.3% reported for October[2]) increase to decline 2.4% (also brutally missing expectations, which anticipated a decline to an increase of only 1.0%). Finally, to round out this trifecta of misery, industrial production fell 370 bps in November from a revised 3.0% increase to a 0.7% decline (missing expectations by 40 bps).

France is not experiencing much joy either. Their merchandise trade figures for November can be read in one of two ways: either as a E7.3 billion shift from a E3.43 billion trade surplus in October to a E3.87 billion trade deficit in November, or (using the revised October figures) as E0.16 billion shift from a E3.71 billion trade deficit to a E3.87 billion trade deficit. The first is an almost inexplicable single-month face-heel turn, and the second smacks of sheer incompetence amongst the offices of the French equivalent of the Department of Labor[3].

Do things get any better for the European Union as a whole? Well, their Q3 final revision for GDP cuts the quarter over quarter growth to 0.3% (down from the previous revision of 0.4%, and missing expectations that the final figure would remain 0.4%). Year over year GDP remains unchanged at 1.9%. the EU's unemployment rate remains unchanged at 10.1% in November, exactly meeting expectations.

On to Canada, where the Labor Force Survey shows things improving by at least a small amount. Employment rose 22,000 in December (up 6800) beating expectations by a small margin (analysts were expecting to see 20,300 new jobs). As a result, the unemployment rate for the year comes in at 7.6%, beating expectations by 10 bps.

Coming up next, we'll be looking at the US Employment Situation!

[1] Merchandise trade is imports and exports of tangible goods and services.

[2] There's no real explanation about how 0.1% was mistaken for 2.3% in the original data.

[3] I mean, really. How else do you look at the trade figures one month and say "Aha! We exported 3.43 billion more Euros worth of goods than we imported! Viva la France!" and then the next month say "Our bad. We made a 7.3 billion Euro mistake in our calculations"? Were they holding the balance sheet upside down?

Europe Is Happy, And Jobless Claims Are Better Than Expected

In Europe, Swiss CPI fell 20 bps to a level of 0.0% for December - good news, but still missing expectations by 20 bps (and bringing the annual CPI increase to a 0.5%, which also misses expectations by 20 bps). German Manufacturer's Orders climbed 360 bps in November to finish at a 5.2% increase for the month.

The European Union released a couple of average figures as well. Across the member states, retail sales fell 130 bps to a level of -0.8% for November (missing expectations by 90 bps). Economic sentiment is positive though, improving 110 bps in December to a level of 106.2, with industrial sentiment up 310 bps to 4, but consumer sentiment falling 160 bps to -11. Obviously, European manufacturers and retailers are more positive than consumers at this moment.

And is Europe up on this overall good news? Let's see... As of 8:36 AM, the FTSE 100 is up 0.59%, the DAX is up 1.26%, and the CAC 40 is up 0.86%. So yes, yes they are.

Leaving Europe behind, we travel north and then south to the United States, where First Time Jobless Claims are due out any moment now. If you remember from last week, we had unexpectedly good news with only 388k new claims. For the week ending January 1, analysts are expecting to see that climb back up (possibly on seasonal employment coming to an end) to 412k new claims. The actual figures - 409,000 new claims - are mildly better than expected. Six states (Florida, Texas, Georgia, Oklahoma, Illinois, and Arizona) saw their first time jobless claims improve, but seventeen states saw things get worse (with California almost single-handedly counteracting the improvement in the six positive states)[1]

Later today, we get the US Chain Stores Sales report[2], the EIA Natural Gas Report (at 10:30 AM EST), and the Fed Balance Sheet and the Money Supply Report (both at 4:30 PM EST).

[1] If that's not clear, try this: Combined, Florida, Texas, Georgia, Oklahoma, Illinois, and Arizona saw jobless claims decline by 17,209. California saw it's first time jobless claims increase by 15,972.

[2] Target, Wal-Mart, K-Mart, and so on and so forth. This is not a huge market mover, but these chain stores do represent about 10% of domestic retail sales. So they are considered to indicate the direction of general retail sales and of consumer spending trends. It comes out when it comes out.

German CPI, Rare Earth Excitement, and Man v. Internet

There's just not a lot of market data due out today. Germany has reported its Consumer Price Index for the month of December, and the news is brutal. In November, consumer prices rose 0.1%. For December, they rose 90 bps to 1.0%. But the German economy can take comfort in the fact that the entire jump was driven by the almost irrelevant forces of home energy, motor fuel, and food. If you strip all of that out and look solely at core CPI, prices haven't changed at all![1]

The Swiss KoF Leading Indicators[2] dropped 2 bps to a 2.10%; not great news, but it still points to a reasonable amount of growth in the Swiss economy.

Everybody in the world that is not China[3] is now complaining about China's move yesterday to cut exports of rare earth minerals. The US Trade Representative's office is "very concerned" about the quota reductions. The EU is demanding that China "respect its recent assurance of a guarantee of rare earth supplies to Europe". On the other hand, everyone in the world that isn't China that has the ability to mine these rare earth minerals is ecstatic. Demand for these rare earths is set to increase by more than 125% in the next 5 years, so that's money in the bank for anyone that can supply them.

Speaking of money in the bank, Paul Allen[4] is suing the entire internet for patent infringement. His suit claims that Interval Research holds patents on how data is related to information being browsed, the way information is relayed to a computer screen in an unobtrusive manner, and the way web browsers are alerted to new items of interest based on the activity of other users. AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo! and YouTube are the major companies named in the suit, which asks for damages and a ban on products that use the disputed patents[5].

Apple is also getting sued, in what the law firm bringing the suit hopes will become a class action lawsuit, over privacy issues. It is alleged that Apple apps "leak" personally identifiable data, despite Apple's policy that only allows data sharing if an app requires the information to keep running. Google may also face a similar lawsuit.

The SEC is also getting involved in the internet, by looking into trading in privately-held internet companies (such as Facebook and Twitter). It appears that there are some online trading services that allow trading of unlisted Internet firms, and the SEC would like some information about how the shares are being valued, and whether or not this trading violates SEC rules[6]. So far, the probe is in the early stages.

[1] Yay?

[2] A composite of business surveys from the industrial, retail, and wholesale sectors, used to try to project GDP growth about 8 months into the future.

[3] Still not wanting to replace the US as the world's sole economic and military superpower.

[4] Co-founder of Microsoft and founder of Interval Research Corporation, a company you probably have not heard of.

[5] This would include Google's search engine, iTunes, AOL Instant Messenger, Apple's Dashboard, Google Talk, Google's Gmail Notifier, and Google's Android phone system, just to name a few things.

[6] Specifically, private companies must either have fewer than 500 shareholders or else publically disclose significant financial information.