Confidence returns as Russia stabilizes, German, UK data good

•     Confidence returns as Russia stabilizes, German, UK data good

–    RUB declines only slightly, Russian stocks +4.5%

–    Ifo index up for 2^nd consecutive month, UK retail sales rise fastest in over 10 years

–    Commodity currencies gain, safe havens (CHF & JPY) worst performers, EM mixed

•     US stocks have another best day of the year

–    Rise in stocks while rates are rising is sign of confidence in US; should support USD

–    Greek stocks also gain as SYRIZA head tones down his views on conflict with EU

•     Oil falls as Saudis refuse to cut output and lose market share

–    But very far out oil futures – e.g. 2020 – are rising as firms cut back exploration and development budgets. Could cause output shortage years from now

•     Bank of Japan keeps policy unchanged, as expected

–    With last move in October, no change expected for months. Focus is on structural reform, not BoJ. But reform remains unlikely, so eventually pressure will be on BOJ

•     Today:

–    Eurozone: German PPI to move deeper into deflation = possibly EUR-negative

–    Norway:  official unemployment rate for Dec expected to rise = NOK-negative

–    Canada: CPI for November

–    US: Fed Evans (dove) and Lacker (hawk) speak. Both are voters in 2015