5 things to start your day

Investors await inflation data, Evergrande defaults, and Bitcoin is back to full power. What next?Investors are bracing for tomorrow’s U.S. [View in browser]( [Bloomberg]( Investors await inflation data, Evergrande defaults, and Bitcoin is back to full power. What next? Investors are bracing for tomorrow’s [U.S. inflation number](. Upcoming [central bank decisions]( next week are also in focus, with the Federal Reserve expected to announce a faster pace of tapering while the European Central Bank may give guidance on plans for the [end of its pandemic asset-purchase program](. While investor concerns over the [severity of the omicron]( variant [have largely eased](, governments continue to take measures to stop the spread of the virus. Bloomberg Economics estimate that new [work-from-home guidance]( in the U.K. could cost the country’s economy £2 billion ($2.6 billion) a month. Default Fitch Ratings [cut China Evergrande Group to restricted default]( over its failure to meet bond interest payments after a grace period expired on Monday. The downgrade may trigger cross defaults on the developer’s $19.2 billion of dollar debt. Fitch also cut Kaisa Group Holdings Ltd. to restricted default, citing [failure to pay]( a $400 million dollar bond that matured Tuesday. It seems clear that there will be [no bailout for struggling developers]( from Beijing with People’s Bank of China Governor Yi Gang saying that the inability to meet obligations is a market event and will be dealt with in a market-orientated way. Hash rate When China announced a [crackdown on the cryptocurrency industry]( earlier this year, the computing power being put towards mining Bitcoin plunged by more than half to 86 million terahashes per second. That rate was [back at 176 million this week](, according to data from Blockchain.com. Mining activity has moved to North America with [Canada seeing a surge in rigs](, while Texas [welcomes the industry]( despite the state’s shaky power infrastructure. Kazakhstan, one of the early winners from the Chinese crackdown, is now seen as having “[zero potential](” for the industry amid power shortages. Meanwhile, Bitcoin continues to [fluctuate around the $50,000 mark](. Markets mixed Investors remain in wait-and-see mode and global equity gauges are reflecting that in this session’s moves so far. Overnight the MSCI Asia Pacific Index added 0.4% while Japan’s Topix index closed 0.6% lower. In Europe the Stoxx 600 Index was unchanged at 5:50 a.m. Eastern Time with energy and retail shares the worst performers. S&P 500 futures [pointed to a drop at the open](, the 10-year Treasury yield was at 1.502%, oil was at [$72.30 a barrel]( and gold was flat. Coming up... Initial jobless claims at 8:30 a.m. are expected to hold close to last week’s 222,000 level. U.S. wholesale inventories data for October is at 10:00 a.m. and the December WASDE crop report is at 12:00 p.m. The U.S. sells $22 billion of 30-year bonds at 1:00 p.m. This morning President Joe Biden delivers opening remarks at the virtual [Summit for Democracy](. Oracle Corp., Broadcom Inc. and Lululemon Athletica Inc. are among the companies reporting results today. What we've been reading Here's what caught our eye over the last 24 hours. - Odd Lots: This is why the nation is facing a [school bus driver shortage](. - The hunt for [a single shot]( to defeat omicron and all coronaviruses. - What the heck is a “reverse repo note” and [what happened all of Tether’s](? - Deutsche Bank told by DOJ it may have breached criminal deal. - Wall Street strategist forecasts for 2022 differ by [second-most in a decade](. - [Fiscal cliff]( nears for U.S. families as pandemic benefits fade. - DARPA-funded researchers accidentally discover the [world’s first warp bubble](. And finally, here’s what Joe’s interested in this morning Tomorrow is CPI day, and tbh, because of the salience of inflation right now, it's really the new Jobs Day. There was a reason that Jobs Day was always the top-shelf data release of the month. For years, the public perception of the job market was the determining factor in how they viewed the economy. So therefore it mattered a lot to politicians. Plus we had a slow labor market recovery, with lots of ambiguity about how low the unemployment rate would get, so each report contained a lot of information that was highly useful to economists and the Fed. Now that's flipped of course. Perceptions of the job market are great, but that doesn't matter to how people view the economy overall, as those numbers have tanked. [I posted this chart to the blog last week](, showing the gap between views of the job market and economy overall. So because the labor market doesn't matter as much to the public as it used to, it doesn't matter as much to politicians. Everyone's talking about inflation. And from the Fed's perspective at this point, inflation is more likely to determine the rate trajectory, than the labor market. In addition to the nominally low unemployment rate, other measures have shown incredible comebacks. Here's a great chart from [Skanda Amarnath]( at [Employ America]( showing the incredible comeback of the prime-age employment rate relative to the last three recessions. Although there's clearly still work to be done, you can see why the Fed is more anxious about the inflation side of the mandate than the employment side at this point -- at least based on their existing general framework. So tomorrow will be a big day and everyone will be breaking it down. Headline YOY CPI is expected to accelerate from 6.2% YOY to 6.8% YOY. Core is expected to hit 4.9%. Everyone's going to be looking at the data on used cars. How many categories are rising. How many categories are rising over 2% and every other way you slice it -- just like we did for the last decade with Non-Farm Payrolls. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](