The bond market welcomed the US jobs data released last week which showed a gain of 214,000 non-farm payrolls for October. A surge of 638,000 in the alternative household survey measure of employment also helped push the unemployment rate down to 5.8% in October for the US.
This is very close to the US Federal Reserve's long-run equilibrium rate of between 5.2% and 5.5%.   It is closer still to the Congressional Budget Office's prevailing "natural" level of unemployment of 5.7%.
The data still suggests that the first rate hike in the US is likely sometime before June 2015. Which is what makes the response from the US treasury market to the employment data surprising – with 10-year bond yields edging back down from 2.4% towards 2.3%.
The positive momentum in the US has helped Canada as well.  Canada posted a surprising gain of 43,000 in long term employment in October, following an impressive jump of 74,000 in September. We now need to see the Asian economies that are also geared to US growth begin to accelerate.
This week's Q3 GDP data for the euro-zone, due out Friday, should further underline the need for ECB President Mario Draghi to stop dragging his feet and get on with quantitative easing. The pressure is also mounting now that Japan has embarked on further QE and weakened its currency.
The three major currencies the US Dollar, Japanese Yen and the Euro – continue to jostle.  The Bank of Japan’s decision to increase its QE program appears to be a currency driven decision with an immediate fall in the YEN against both the USD and Euro.
This weakness in the YEN has also caused a selloff in the Australian Dollar against the USD.  Although not so much on a trade weighted basis of currencies.
The renewed slide in the price of oil has unsettled global equity markets but it’s a new norm they’ll need to learn to love. As Brent Crude slipped to $82 this week, we think the days of $100 a barrel are over for at least the next 12 months.
Whilst some believe this is a strategic move by Saudi Arabia to squeeze other suppliers, it may simply be a response to weaker US demand due to the surge in domestic shale output.
Sharp declines in oil prices make stock markets nervous for three reasons:

1. Lower oil prices may impact the earnings of energy producers, which make up a large part of leading equity indices.
2. A slump in oil prices can be an early indicator of weakness in the global economy however this seems unlikely given there is nothing to suggest the world economy as a whole is collapsing.
3. Lower oil prices reduce the pressure on inflation and increase fears of deflation, which is a major issue for Europe.