A few things of note, including the mood of small business

So JGB yields are responding lower to the story last yesterday (Japan time) that they won't be changing NIRP policy next week. The 10 yr yield is down by 4.4 bps to .72% and the 40 yr yield is giving back 3 bps to 1.97%. Yields are down across Asia, Europe and in the US too. The yen though, after yesterday's selloff, is rallying today and getting back much of what it lost as maybe due to the realization that NIRP is on its last legs regardless if a move is made next week or not. 

Japan also reported its November PPI which was up .3% y/o/y, two tenths more than expected and while still little changed, it was higher by 10% in November 2022 y/o/y on top of 9.1% y/o/y in November 2021. The rate of change slowdown is all well and good but there has been a notable rise in costs over the past few years with a new base level. 

I went through the Oracle earnings transcript but couldn't find much in macro commentary with regards to enterprise spend. Between Safra Catz and Larry Ellison there was a lot of exuberant commentary on their cloud infrastructure (they are building out a lot of capacity) and generative AI business, which demand was referred to as "increasing at an astronomical rate," though revenue growth in total for the company was up just 5% y/o/y in the quarter. 

When I saw the story late yesterday that Ford is cutting production of its EV powered F-150 truck by half in 2024 all I could think of was the massive amount of government incentivized construction spend on everything renewable, including multiple battery plants, that is being constructed not because the demand is there but only because of the tax/grant incentives to do so. Thus if correct, after this spending binge we could then have huge over capacity and a lot of wasted, misallocated capital. I certainly won't be surprised.