Draghi sure took some pressure off the Fed, didn't he? No big change to QE after all and the euro surges to $1.094 from $1.055 - a 3.8% strengthening that makes the RMB move back in August look like kid stuff, even if it was in the other direction. The see-saws continue and this one is a tip of the hat in the Fed's direction, allowing it to hike this month with a tad less worry that it won't have to chase a weak euro into the Netherlands. US exports already look bad and inflation is going nowhere - a euro below par would only add more anxiety to the Fed's normalization plans. Yes, 1.09 is a nice break. 

Today's nonfarm payrolls won't factor into the Fed's lift-off deliberations. Officials have made their bed; now they have to sleep in it. For the record, markets expect 200k payrolls were added in November, 190k of which will come from the private sector. That's a bit below the (absolutely unchanged) trend of the past four years but would still be another small step in the right direction. The labor force is growing at around 110k per month, so a net 90k/100k would be mopped up from the ranks of the unemployed, pushing the economy, if ever so slowly, towards the day when inflation starts to move towards the Fed's 2% target rather than away from it. It's only a matter of time. 

The trouble is, we've been hearing that 'just a matter of time' mantra for the past three years. And still no one knows how slack remains in the economy and when that day will come. Yellen thinks 2% inflation will be achieved sometime in the next 2-3 years. That's reasonable but it's awfully vague and awfully far away. If your target is 2-3 years away the biggest and loudest thing is says is you don't really know when it will come. 

Which of course means that raising rates today is risky. There's no way around it. If you want to hike rates slowly, like the Fed does, you have to start before you're sure it's time. Which is why the Fed will be tiptoeing through the tulips in 2016. It will hike in December. If nothing falls apart, it will hike again by March. If things still look okay, another hike will follow by June, and so on through the year. It's risky business to be sure. We're in charted territory. Nice that Draghi drew a couple of lines on the Fed's map yesterday.