Business

Not since December 2013 have Canadian Consumer Prices dropped by such a large amount. November CPI dropped 0.3% MoM, dramatically worse than expected to the largest drop since Dec 2013. The largest YoY drop in Canadian CPI, amid a surge in inventories relative to a collapsee in wholesale sales sent the loonie crashing above 1.4000 for the first time since August 2003.

Candian CPI tumbles and Wholesale Sales plunges...

Which send USDCAD to 12 year lows...

Charts: Bloomberg

For a brief few minutes, overnight saw exactly the reaction that central planners had hoped for when The Bank Of Japan announced it would buy 'moar' stock ETFs and extend bond duration buying ad nauseum. However, within just 15 minutes something happened that we haven't seen since the world embarked on this experimental nightmare. Despite the front-ran promises to buy Japanese stocks "whatever it takes" traders sold... and sold large.

One week ago, and again last night, we previewed today's main event: an immensely important quad-witching expiration, the year's last, one which as JPM's head quant calculated will be the "largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050."

• Oil heads for third straight weekly loss as supply weighs (Reuters)
• BOJ's $2.5 Billion ETF Boost Seen Having Little Impact on Stocks (BBG)
• Japan core CPI seen flat in November, household spending down (Reuters)
• Dollar gets altitude sickness as BOJ disappoints (Reuters)
• Fed Hikes, but Some Rates Veer Lower (WSJ)
• White House calls for 'common sense steps' to help Puerto Rico (Reuters)
• Martin Shkreli, Pharma Executive, Arrested on Fraud Charges (WSJ)

Arguably the biggest event overnight was yesterday's BOJ announcement which was widely expected to be non-event, yet ended up being anything but, when, as expected, the Bank of Japan did announce it would keep overall JPY80 trillion monthly QE unchanged, as forecast by 41 of 42 economists, however it also announced it would extend the average maturity of JGB holdings to 7-12 yrs, would establish a new program for ETF purchases targeting the stocks issued by companies "proactively making investment in physical and human capital", and lastly