A false inversion.

"Wall Street's main indexes all gained more than 2% on Friday (yesterday) after December payrolls expanded more than expected even as wage increases slowed and services activity contracted, easing worries about the Federal Reserve's rate hiking path." Reuters. US non-farm payrolls rose by 223,000 jobs in December while average earnings rose by 0.3%, less than 0.4% of the previous month, and services activity declined for the first time in 2-1/2 years. "European markets climbed on Friday," as the euro zone "Headline inflation, which includes food and energy costs, came in at 9.2% year-on-year in December" from "November's headline inflation rate of 10.1%". CNBC. "While there are good reasons to be dour about the prospects for the global economy, 2023 doesn't have to be a write-off," wrote Daniel Moss. "One of the most telling decisions of the past few weeks came from Jayanth Rama Varma, a longtime hawk on the RBI policy committee, who has become skeptical. Varma dissented against the bank's December hike." Economist Campbell Harvey has shown that "US recessions have been preceded by an inverted yield curve - when short term rates exceed those of longer tenors - since the late 1960s." ET. Which is what has happened already. "Yields on longer-term US Treasurys have fallen further below those on short-term bonds than at any time in decades," and "A scenario in which short-term yields exceed long-term yields in known on Wall Street as an inverted yield curve and is often seen as a red flag that a recession is looming." WSJ. "Last week, the yield on the 10-year US Treasury note dropped to 0.78 percentage point below that of the two-year yield, the largest negative gap since 1981." This time, Harvey, now a professor at Duke University's Fuqua School of Business, said in an interview, "I have reasons to believe, however, that it is flashing a false signal." Prospects for China are more uncertain. "Now, faced with an unpredictable - and uncontrolled - epidemic and financial uncertainty, people and companies are spending cautiously, suggesting that the road to recovery will be uneven and painful." ET. And, "As European and American shoppers tighten their budgets, China increasingly faces a double blow of slumping demand both home and abroad." "The teeming warehouses carved into the desert surrounding Laredo attest to an explosion of trade between the United States and Mexico." ET "American companies sobered by the supply chain upheavals of the pandemic and alarmed by the animosity between United States and China are reducing their dependence on factories across the Pacific by shifting production to Mexico." Where the US leads, Europe follows. "While European investment in China hasn't dried up in recent years, analysts say that the political dynamics have fundamentally shifted." DW. The US going up, China going down. Does it mean trouble on India's borders? Maybe the China virus will infect the Chinese army. After all it's their own pet.