Markets started 2024 as wildly optimistic --and wildly wrong-- about rates as they did 2023: is there something structurally wrong with economics, or just them? After all, yesterday's US retail sales were much stronger than expected, industrial production better than consensus, and while the Fed's Beige Book said the labor market was cooling, with increased consumer "price sensitivity", businesses expectations were positive and/or improved. In other words, doing nothing is a realistic option for the Fed. Moreover, UK inflation was stronger than expected, as Canadian core CPI had been earlier this week, and Australia's Melbourne Institute survey today was an unchanged 4.5% y-o-y. On top, we got more central-bank speech saying "We aren't cutting rates anytime soon." And they aren't. That said, Australia's jobs data today collapsed -65.1K, having been +72.6K last month, with full-time jobs -106.6K, yet unemployment staying at 3.9% due to a plunging participation rate. The AUD didn't like that much, and neither will the RBA. However, both this and last month's job figures are mad in a population of 25m.

On economics, markets, and being structurally wrong, Davos just saw "anarcho-capitalist" Argentinian President Milei lambast its attendees for abandoning the "values of the West" - to warm applause. Moreover, JP Morgan CEO Dimon said, "I think this negative talk about MAGA is going to hurt Biden's electoral campaign," adding Trump, "was kinda right about NATO. Kinda right about immigration. He grew the economy quite well. Tax reform worked. ... I don't like how he said things about Mexico, but he wasn't wrong about some of these critical issues, and that's why they're voting for him." Both comments are worth noting regardless of whether one agrees or not.