QE Talk From the ECB, Holiday Doldrums Begin in Asia

US GDP was revised lower but jobless claims were better than expected. Overall market moves were minimal with the Canadian dollar as the top performer and the yen lagging. The Asia-Pacific calendar is bare with Japan closed for the Emperor's Birthday.

Markets retained an overall positive tone on Thursday even with US Q3 GDP lowered to 1.8% from 2.0%. Improvements to trade and business investment were mitigated by slower consumer spending. The real personal consumption expenditure rose 1.7%, far short of the 2.3% expected. Latest on Premium Intermarket Insights.

Initial jobless claims fell to 364K from 368K, beating the 378K consensus. It was the third consecutive week of lower-than-expected claims. Housing continues to send mixed signals with the monthly house price index fall 0.2% in November compared to the +0.2% expected. Leading indicators rose 0.5% in Nov and U Mich consumer sentiment was revised up to 69.9 from 68.2.

In an exit interview, departing ECB member Bini-Smaghi hinted that bond buys may be necessary and urged leaders not to hide behind lawyers to avoid taking action. Italian PM Monti also survived a final confidence vote on the budget.

The euros performance on Thursday once again underscores our negative bias. The explosive rally to 1.3120 in early European trading was snuffed out in two hours and EUR/USD closed virtually unchanged on the day despite 1.0-1.4% gains in European stocks.

The S&P 500 rose 0.8% to 1253. Gold fell to $1604/oz.

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