We live in very strange times, in many different ways…

a man in a suit and tie is holding a wind turbine with the words heute show on the bottom right ALT: a man in a suit and tie is holding a wind turbine with the words heute show on the bottom right

Bah

This is one of those trick questions! “What makes you think they are surprised?” Or “how could they possibly be surprised by that?” Either way, the front page of the FT says Europe has been ‘left reeling’ by Trump over the peace talks. 🤓

A ‘bad’ 0.1% rise in GDP is better than a 0.1% fall but the only way this helps in the medium term is if it’s indication that Christmas came to the UK late, rather than not at all. Making a note to pay attention to Jan retail sales, 7am, next Friday.

Correlated wiggles yes, choreographed wiggles, definitely not!

Our lessons in the art of the deal continue, but for the first time ever the UK’s dire balance of payments have allowed me to sell sterling at an improved rate. Small mercies but still…

Happy National Hedgehog Day! Here’s a list of meanings of words for a hedgehog in eight languages...

Shrinking pig (Afrikaans)
Furry pig (Hungarian)
Thorned animal (Punjabi)
Cow sucker (Luxembourgish)
Adder eater (Polish)
Ouch mouse (Bahasa Adama)
Needle rat (Japanese)
Horrible little thing (Irish)

Can someone get Brad ‘“If Donald Trump doesn’t slow down, he may succeed at triggering a recession” Setser on here, please?

The twin brother of the ‘death of the gilt market’ fears in the 1990s…I have no idea why the DMO doesn’t focus more on the short end of the curve, but even if DT sends yields higher everywhere, that’ll just create an even bigger buying opportunity here.

Duncan’s and the dollar debate. Economic exceptionalism took it to the moon, tariff terror took it to heights last seen nearly 40 years ago, until Reagan/Baker intervened. The difference this year may be that while it will fall back eventually, it won’t fall very far until/unless share prices do.

May need a new dot on it this morning after…

UK ‘stagflation’ bingo lasted less than a minute, as it appeared in the first newswire comment after this morning’s awful retail sales data (down 0.6% in Dec ex fuel) with food and online the weakest bits. Rate cuts are coming and some journo will write a “Rachel ruined Christmas” piece, no doubt.

Once the banks bought the gemms it was never going to the serious sober place it was when Pongo, Bonzo, Rodders and the Adder were keeping it in order…

I can understand London and Palermo but the Royal Spanish Mail was slacking on this basis…

‘It's a jam-packed day in markets, with earnings season kicking off in earnest and the consumer-price index due. Will either event be able to kick stocks out of their latest slump?’ journo email this morning. SPX has trebled in the last decade but a 4% fall from the peak qualifies as a ‘slump’.

UK inflation edged down to 2.5%, core to 3.2%. Gilt relief, pound a little firmer, even if softness in alcohol, tobacco, clothing, restaurants and hotels points to a low-key, not-so-joyous Christmas mood.

“When bond markets get sticky, it is unhelpful to be the ugliest horse in the glue factory” wrote someone… trouble is, bonds might get stickier. Next stop, US CPI on Wednesday. Hibernation appeals more and more.

Are you wearing running shoes or ice skates?

In that context, Helmut Schlesinger’s obituary is worth reading… the Bundesbank was overruled on the terms of reunification, and the UK was booted out of the ERM. Cursing Schlesinger didn’t prevent Major and Lamont getting the blame…

There aren’t many reasons to be grateful for 7 am meetings but they do remove such temptations…

So who is Donald Trump’s James Baker (without whom the dollar is going to go on overshooting until we’re way past silly)? This from the NYT

Jimmy Carter signing the Humphrey Hawkins act into law in 1978….

Mythos Ragnarok

When/if they next turn up, take them to Ragnarok… mythosragnarok.co.uk#:~:text=Myth....

Arsenal or Eddie?

The Canadian dollar has been plunging! Full Stop

No-one pays attention to US PMI data; they’re only publishing them to show off, at this stage.

A new take on the merits of the four day working week. Henry Ford was widely criticised for introducing a 5-day back in the day, but it boosted productivity…

UK economy unexpectedly contracts 0.1% in October Monthly figure marks blow to Labour government’s economic agenda

UK economy unexpectedly contracts 0.1% in October

www.ft.com/content/b1177705-1be7-45...

Seems politicians get the blame for inflation, regardless of where it comes from. But people still vote for candidates whose policy plans are likely to be inflationary…