by Calculated Risk on 2/05/2014 09:17:00 PM

From Tim Duy: No End To Tapering Yet. Excerpt:

I don't think the Fed believes that the end of asset purchases is impacting global markets because they are convinced that tapering is not tightening. If it is tightening, then why should global markets react? And even if it was tightening, the Fed wouldn't see it as their problem in the first place. ...

Bottom Line: The Fed isn't ready to change course. Recent turbulence is enough to peak their curiosity, not enough to suggest that tapering was premature.

We have seen a few weak economic reports recently such as the December employment report, auto sales in January, and the ISM manufacturing survey for January. But I don't think the recent weakness is a significant concern for the Fed - unless the weakness continues.

Thursday:
• Early: the Trulia Price Rent Monitors for January. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 337 thousand from 348 thousand.

• Also at 8:30 AM, the Trade Balance report for December from the Census Bureau. The consensus is for the U.S. trade deficit to increase to $36.0 billion in December from $34.3 billion in November.