It is a modest dollar negative; the trade data combined with the claims data, but the focus this morning is very much on digesting the BOJ and on payrolls tomorrow.
It's always been very important to listen to CEOs. When you've got guys that run companies nervous about demand, they put off investing.
For the past year and a half, the consumer has defied a recession and Sept. 11 and kept spending at a healthy pace.
For the Fed, productivity is the antidote to inflation, and that's still very strong. It's inconceivable that the Fed would tighten in four out of its next five meetings.
You can really think of productivity as magic fairy dust to sprinkle over growth to allow growth without inflation. That's really the way the Fed sees it.
The manufacturing sector has been so battered that it's too early to say the troubles are over in that sector. But we're seeing the economy making some kind of a bounce after contracting in April. We have to see now whether or not that continues.
The manufacturing data certainly are positive, but the employment data specifically reinforce the notion that domestic growth is not going be enough to create many jobs.
Most people at the Fed seem to feel that the national economy is strong enough to absorb the effects of Katrina. That to me seems that you will not see the Fed rate hike derailed.
Almost always the knee-jerk reaction in the markets to positive news on reforms is yen positive. People look at reform as being a positive thing for Japan, one day, hopefully.
They have clearly started to apply more pressure. They have singled out China and the rest of the emerging market economies.
