Good morning. Here are Friday’s top stories:
Police Close In On Paris Terror Suspects. French authorities are closing in on two brothers who were allegedly involved in Wednesday’s terror attack on the satirical magazine Charlie Hebdo. Special forces have surrounding a building. At least one hostage has been taken. The story is developing.
The ECB Is Considering QE Options. “The European Central Bank is considering a dual approach to government bond purchases, which would involve both it buying debt and sharing the risk across the eurozone and, in a nod to German qualms, separate purchases by national central banks,” Reuters’ Eva Taylor and Paul Taylor reported. “Sources familiar with the discussions said such a bond-buying option, also known as quantitative easing (QE), is among the tools the ECB is preparing ahead of its Jan. 22 policy meeting should it decide to act to address falling consumer prices and a growing risk of deflation in the eurozone.”
The US Jobs Report Is Coming. At 8:30 a.m. ET, we’ll get a look at the latest nonfarm payroll figures, pay growth, and the official unemployment rate from the US. Economists estimate US companies added 240,000 nonfarm payrolls. The unemployment rate is forecast to fall to 5.7% from 5.8%. In November, the US economy added 321,000 jobs, blowing away expectations and marking the 10th straight month in which payrolls grew by more than 200,000, the longest such streak since 1995.
The Bull’s Take. Societe Generale’s Brian Jones has the highest forecast of 98 economists surveyed by Bloomberg. Jones expects to see 305,000 payrolls added, with the unemployment rate plunging to 5.6%. He points to depressed initial jobless claims, the notable breadth of jobs gains, above-average business activity, and favourable weather.
Markets Are In The Red. US futures are down, with Dow futures down 47 points and S&P futures down 5.4 points. European markets are also in the red, with Britain’s FTSE 100 down 0.5%, France’s CAC 40 down 0.6%, and Germany’s DAX down 0.6%. Japan’s Nikkei closed 0.18% higher.
China’s Producer Prices Are Falling Faster. The Chinese producer price index fell 3.3% in the year to December, a decline that is getting steeper. It’s the fifth month in which an increasing drop in prices has been recorded by producers. Consumer price inflation came in at 1.5%.
German Industrial Production Unexpectedly Fell. November’s figures are out, and production dropped 0.1%, in contrast to expectations for a 0.4% increase. However, October’s 0.2% increase was revised up to a 0.6% jump.
Kocherlakota Says The Oil-Price Drop Is A Good Thing For The US. The drop in oil prices is putting money in consumers’ pockets and is “a good thing, basically” for the US economy, Minneapolis Fed President Narayana Kocherlakota said at a town hall at his bank’s headquarters.
Sri Lanka’s President Is Out. Mahinda Rajapaksa, who was previously in power, conceded defeat to Maithripala Sirisena on Thursday night. Sirisena defected from the governing group just two months ago to be the opposition candidate, according to Bloomberg.
Tesco Got Cut To Junk. After its first really positive day in some time, in which a series of announced cuts seemed to buoy the share price, with investors and analysts largely approving, Moody’s cut its rating of the world’s second-biggest retailer to junk, according to the FT.