We begin with the UK where the Bank of England struck a decisively dovish tone.

Source: WSJ

The Federal Reserve now stands alone among the major developed economies in its quixotic quest to "normalize" monetary policy. More on this shortly. The British pound got hammered on this dovish news from the Bank of England.

Source: barchart

Carney wants to see inflation continue to stabilize (chart below) and a weaker pound should help offset the effects of falling oil prices.

Source: Investing.com

UK house price appreciation has accelerated recently and in a more "normal" environment the BoE would be paying attention. However, given the disinflationary pressures elsewhere, this now looks inconsequential for the BOE's policy decision.

Source: Investing.com

Continuing with Europe, the latest ZEW report shows softer economic sentiment in Germany and the Eurozone as a whole.

Source: ZEW

The ZEW index for the Eurozone in particular was materially below consensus, suggesting the region's growth is facing new headwinds.

Source: ZEW, Investing.com

The Swiss National Bank has been quite busy this year as risk aversion increased demand for Swiss francs. The central bank had to intervene again to keep the Swiss currency from appreciating too much. That probably mans its balance sheet continues to expand - with the largest asset being the euro.

Source: @MatsGlettenberg, JPMorgan

Now let's look at China again.

1. Forecasting China's GDP growth has become quite easy as growth volatility has been "smoothed" out. 

Source: @JohnKicklighter

2. Barclays China GDP tracker has the Q4 growth rate at 5.6% vs. 6.8% reported. While diverging materially from the official figures, it does not indicate a "hard landing".

Source: Barclays Research

3. China's steel production posted its first year-over-year decline in 25 years.

Source: @JavierBlas2

4. As discussed yesterday, steel prices in China remain stable, helped by fiscal stimulus, reduced production.

Source: barchart

5. Here is an estimate of how global economic growth will be impacted by a 10% depreciation in the yuan.

Source: @PatrickMcGee_ 

The Hong Kong dollar has been under pressure lately as outflows hit the greater China.

Source: barchart

Now we also have what looks like sheer panic in Hong Kong's stock market ...

The Taiwan dollar is weakening as well as increased tensions with the mainland (after Taiwan's election) make investors uneasy. Weaker growth isn't helping either.

Source: barchart

Turning to India, the rupee blasted past 68 to the dollar as outflows accelerated. Rumors are circulating that the RBI is intervening at this level.

Source: barchart

The Mexican peso hit another record low (chart shows USD at record high vs. MXN). The EM currency selloff has been relentless.

Source: barchart

Related to the above, the trade weighted US dollar index continues to rally. This remains the biggest threat to US and global growth. Once again, is the FOMC looking back at the December policy decision with regret?

The market is certainly telling the Fed that raising rates in this environment is a policy blunder. Inflation expectations are falling across the board. Swap-based forward inflation expectations are at record lows. Here are the TIPS-based expectations: 5y5y forward and the 10y breakeven - both at post-recession lows.

Turning to the energy markets, the March NYMEX crude futures (the most active contract) is now firmly below $29/bbl. 

Source: barchart

The longer-dated crude oil contracts (Dec 2021 shown below) got hammered this year as the concept of "lower for longer" becomes widely accepted. Some producers have been locking longer-dated prices against crude in the ground - as they give up hopes for a major crude oil recovery.

Source: barchart

The Baltic Dry shipping index takes another leg down as global trade remains weak and overcapacity is catching up with the industry. Now there will also be quite a bit of scrap metal for sale.

Source: Stockcharts.com

Here we go - the 10y treasury yield is now below 2% as the risk-off sentiment intensifies. The Fed is expected to roll its maturing treasuries, putting further downward pressure on longer-dated yields. 

Source:  ‏@paul_dobson, @business 

Let's look at a couple of developments in US equity markets:

1. The great biotech outperformance is being reversed.

Source:  ‏Ycharts.com

2. Poor market sentiment in the past has meant better 1-year returns.

Source: @jpmorgan, @ReformedBroker, h/t Josh

Finally, the shift toward index investing is now taking place in fixed income as well.

Source: @MktOutperform

Turning to Food for Thought, we have 5 items this morning:

1. The amount of truth in statements made by various politicians.

Source: @elenaholodny 

2. US savers are yet to feel the impact of the Fed's rate hike in December as banks keep CD and money market rates at all-time lows. 

Source: Bankrate.com

3. According to Moody's, diamond prices are down nearly 30% over the past 18 months. 

Source:@MatthewPhillips, Moody's

4. Birds and airplanes ... since 2000.  

Source: @VoxDotCom

5. The SEC is increasingly using its in-house judges/proceedings to try new cases. What happened to "right to jury trial"? Is this even constitutional?

Source: @BloombergBriefs, h/t Josh