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Euro Zone Bonds Stronger on ECB Purchase Hopes

ADP Report Show Improvement: 93,000 New Private Sector Jobs (CNBC) According to new employment numbers released by ADP at 8:15 this morning: "The economy created 93,000 private sector jobs in November, pointing to the first signs of a turnaround in the labor market, according to the latest report from ADP and Macroeconomic Advisors.

Job creation came primarily from the service sector, which rose by 79,000, gaining for the 10th month in a row. Goods producers added 14,000, while manufacturing lost 16,000."

Euro Zone Bonds Stronger on ECB Purchase Hopes (Financial Times) "On Tuesday, Portuguese bonds rallied strongly as traders said the eurozone central bank was an active buyer. Sovereign bonds of peripheral eurozone nations continued climbing on Wednesday in response with yields on 10-year Spanish debt falling 13 basis points to 5.30 per cent and 10-year Portuguese yields down 11bp at 6.57 percent." There was also a lessening of fear in credit default swaps: "Five year CDS spreads fell 49bp to 495bp on Portugal and were 20bp lower on Spain trading at 345bp."

"Mortgage Tax Break in Crosshairs" (Wall Street Journal) "The co-chairmen of the White House's bipartisan deficit-reduction commission said Tuesday they would propose a significant paring of popular middle-class tax breaks, including the mortgage-interest deduction…" You have to wonder two things: 1) How popular will deficit reduction become on Main Street — if the proposed austerity package includes significantly reducing the ability of Americans to deduct the interest component of their mortgage payments? and 2) What impact would such a reduction have on home sales? To the latter point: "Joe Stanton, chief lobbyist for the National Association of Home Builders, said his organization would use 'the full weight of our grass roots' to prevent any reduction of the mortgage-deduction tax break. 'You are already talking about an industry that is completely battered, and this will kill us,' he said."

More Nuanced Net Neutrality in the Works? (Washington Post) "The chairman of the Federal Communications Commission plans to announce Wednesday a controversial proposal that would prohibit Internet providers from favoring or discriminating against any traffic that goes over their networks. FCC Chairman Julius Genachowski would do so, however, without resorting to a more drastic step of changing the way the FCC regulates broadband providers that would have more clearly asserted the government’s authority over Internet access."

Markets Rise on Strong Numbers from China (Yahoo Finance via Reuters) "Better-than-expected Chinese factory data in November, with the official Chinese purchasing managers' index (PMI) rising to a seven-month high of 55.2, showed health in one of the world's largest economic engine, lifting sentiment. European shares rose nearly 1 percent and Japan was half a percent higher." However: "But serious concerns remained about the pressure on euro zone debt and the methods by which it might be eased." One wonders which of the twin concerns is more serious: The downward pressure on debt exerted by markets – or "the methods by which it might be eased."

"What Brings Parties Together? Doubts over Bipartisanship" (Politico) In what may be a fair index of the state of politics in Washington today: "President Barack Obama achieved bipartisan consensus on at least one issue Tuesday: Democrats and Republicans were united in their skepticism of his latest effort to bridge the partisan divide. "

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