New look euro

No surprise
In the country that boasts one mass shooting every day a new television channel debuts next month: Gun TV. Think QVC for survivalists. Americans will be able to buy a sniper rifle in the comfort and privacy of their own home. Nobody seems surprised at this latest development.

Nor was anybody surprised at the latest development in US employment. Figures released on Friday showed nonfarm payrolls increasing by 211k in November, 11k more than forecast. A further 35k jobs were added by upward revisions to previous months' data, putting the total 46k above what investors had been expecting. The dollar's supporters, who have become accustomed to good employment figures, were pleased rather than overjoyed.

The US dollar was relatively volatile around the time of the announcement, eventually cementing daily gains of a quarter of a cent against sterling and three quarters of a cent against the euro. That was nowhere near enough to offset the losses it had suffered the previous day as a result of an uncharacteristically timid easing of monetary policy by the European Central Bank. On the week it is still sitting of losses of two thirds of a cent to sterling and two and three quarter cents to the euro.

The Draghi defence
Investors were taken aback by Thursday's announcement that the ECB would cut its deposit rate from -0.2% to -0.3% and extend the asset-purchase programme for a further six months. They had expected much more, not least because Mario Draghi, the bank's president, had led them to do so. On Friday Sig. Draghi attempted to defend himself.

He said in New York that the extra €360bn does not necessarily represent the ECB's final shots in its quantitative easing programme. He said the ECB's commitment to lifting inflation is "unlimited". Nevertheless, the measures announced last week appeared to fall short of "whatever it takes". And Germany and four others thought even that was too much.

So although, on Friday, the euro had to hand back some of Thursday's extraordinary gains, it clung onto most of them because ECB monetary policy is on a tighter path than investors had thought it would be. The big bazooka has been replaced by a box of Molotov cocktails.

Now relax
In comparison with Thursday's ECB bombshell and Friday's US jobs data, the events on today's schedule will be something of a damp squib. The most important data are for German industrial production, which is already out, and Japanese gross domestic product, which does not appear until tonight.

The 0.2% monthly increase in German industrial production was smaller than forecast. The second revision to third quarter Japanese GDP is expected to confirm zero growth. Other figures cover Euroland investor confidence and Norwegian manufacturing output.

Bank of England governor Mark Carney will attend the ECON meeting in Brussels this afternoon only in his capacity as First Vice Chair of the European Systemic Risk Board. Don't look for any steer on UK interest rates.