SUNDAY 12/14/14; Japan Snap Elections

The PBOC is lowering China’s growth target to +7.1% according to the latest reports. The Beijing communist leaders targeted +7.5% for this year and the numbers are slowly slipping away currently at +7.3% year over year. There are rosy prognostications that retail sales will grow as well as import and export activity, however, exports will only grow if the global economy recovers and imports and retail sales will only increase if the domestic recovery picks up. It would be surprising to see China’s growth rate remain above +7% in 2015 although the data is routinely fudged.

The near misses in Sweden’s air space are becoming more alarming. Russian military jets are increasingly flying over European air space and are 











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 millions flocking to the polls. PM Shinzo Abe is hoping for positive support for Abenomics, the obscene Keynesian program that is trying to jump start Japan out of deflation by creating mountains of debt. Despite the unprecedented BOJ actions, Japan is mired in recession. 475 government seats are on the line. The Japan elections will set the tone for global trading for the week ahead.

The Japan elections are in Abe’s favor as expected. Voter turnout is a record low with only one in four voters venturing to the polls as snow falls. Abe receives a new majority in the ruling body and four more years in power. The results are baked in to markets as the dollar/yen trails lower and the stronger yen creates weakness in the Nikkei futures. Dollar/yen 118.38. Euro 1.2471. Pound 1.5726. The Aussie dollar trails lower at 0.8245.