Oil remains the centre of attention though the further dip not of the same cathartic proportions as the night before but enough it seems to continue to dog equity market sentiment, US energy stocks down another 1.2% with WTI and Brent down 0.4% and 0.8% respectively. The UAE’s Oil Minister said current oil prices were unjustified but there is little that could be done to defend it. Indeed, the UAE intends to increase oil production from the current 3mln barrels per day to 3.5mln despite calls from some OPEC oil producers for cuts.

Currency-wise, the rouble looks to have been the main casualty, though the NOK is down 0.25%. On the flip side, USD/JPY has been testing lower, now trading this morning below 118, the strongest level for the yen since mid-December.

Perhaps telling the USD could not make further gains overnight despite two pieces of much stronger-than-expected reports on the economy. The data were also reflective of FOMC-sensitive labour market/ wage compensation strength. The Bloomberg spot big dollar index sits 0.1% higher this morning. Tonight’s retail sales report could also be instructive.

The US NFIB Small Business Index at 100.4 is now back to pre-recession 2006 levels, indicative of full small business participation in the expansion. Only one of the ten NFIB components fell. Notably, the proportion of businesses reporting rising net compensation (and plans to pay more) increased further. That’s at odds with soggy payrolls average hourly earnings growth but entirely consistent with nearly everything else seen from US labour market data, including last night’s job openings data, now the highest in 14 years.

UK headline inflation surprised on the low side with annual inflation in December of just 0.5%, the lowest since 2000, prompting only a short period of selling, core inflation right on expectations at 1.3%. Low inflation will prompt now a “please explain” letter from the BoE to the Chancellor for why inflation is not sufficiently close to target, but this on the low side.

The AUD had something of a small song and dance after better than expected growth in Chinese exports and strong implied import volumes. The Aussie though relented, back in the mid-0.81s this morning. Iron ore fell 2.22% yesterday, copper was down 2.6% and the VIX popped higher, all fair value headwinds.

Coming up today/tonight

NZ has its credit card spending data this morning at 8.45 AEDT, this report for Dec. That’s followed by QVNZ House price data for Dec at 10.00. Between those two non-sensitive market releases, Minneapolis Fed President Kocherlakota, arch-dove and non-FOMC voter this year speaks in New York on the economic outlook at 9.00 AEDT.

Still light for local data with the ABS quarterly measure of Job Vacancies for November, this measure to date having been rather tepid in momentum. Japan has machine tool orders for Dec at 17.00, followed by Indian wholesale inflation at 17.30.

Initial focus on the Euro tonight with France’s December CPI that’s expected to reveal zero price change for last year. That’s followed by the EU’s top court providing non-binding advice on the ECB’s OMT Mechanism, playing into the ECB QE “will they/won’t they/ can they” debate. The EC releases industrial production data for November and is expected to be flat for the month but down 0.7% for the 12 months. Philly Fed President Charles Plosser, uber-hawk (not a FOMC voter this year) speaks on the economy. That’s scheduled to be 30 mins before the December retail sales report is released, helping to further firm up Q4 consumption and GDP estimates. Business inventories for November are also released, followed tomorrow morning by the Fed’s Beige Book, its regional economic review ahead of the Jan 27-28 FOMC meeting.

Overnight

Oil lower still: Eurostoxx 600 +1.4%, Dax +1.6%, CAC +1.5%, FTSE +0.6%. Dow -111 points to 17,530, -0.6%, S&P 500 -0.6%, Nasdaq -0.8%, VIX 21.33 +8.8%. Shanghai +0.2%, Mumbai +0.2%, Nikkei 225 -0.6% and ASX 200 -0.6%; ASX SPI futures this morning -0.6%. US bond yields: 2s at 0.52% (-2), 10s at 1.88% (-2). WTI oil at $45.94 (-0.3%), Brent at $46.57 (-1.8%), Malaysian Tapis (yesterday) $47.70 (-5.2%). Gold at $1231.50/oz (-0.1%). Base metals: LME copper -2.6%, nickel -3.0%, aluminium -1.0%. Iron ore $68.7/t -2.2% Chinese steel rebar futures +0.2%. Soft commodities spot futures: wheat -1.4%, sugar +0.7%, cotton +0.7%, coffee 0.1%. Euro Dec 14 CO2 emissions at €7.38/t (8.5%).

UK CPI (Dec) 0.0%/0.5% (L: -0.3%/1.0%; E: 0.1%/0.7%); core CPI 1.3% (L: 1.2%; E: 1.3%)

US NFIB Small Business Optimism (Dec) 100.4 (L: 98.1; E: 98.5); JOLTs Job Openings (Nov) 4972 (L: 4834; E: 4850)

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