Outlook:

Amid the lists of “10 best” this and “5 worst” that, we discovered the FT’s 10 most viewed charts. It’s an amazing blend of the useful (EMU PMI’s, UK real wages, US unemployment, Japanese CPI, London house prices) and the stupid (bitcoin price, Twitter stock price, mobile manufacturers’ market share), with a few oddballs thrown in (banks’ LIBOR fines, Indian rupee).

The US taper caper had an especially bad effect on the “fragile 5” emerging market currencies, with the Indonesian rupiah and S. African rand down over 20% (against the dollar), the Turkish lira down 18%, the Indian rupee down 12% and the Brazilian real down 15%. We are perfectly willing to acknowledge that these currencies were mostly affected by the giant shift in the global interest rate outlook, but relative rates are not the only factor in currencies. The fragile 5 have re-structuring needs that they failed to address while the hot money was flowing in. In the meanwhile, European non-euro fringe country currencies did okay.

We do have a calendar today, even if everyone will have cleared out by 1 pm. It includes two versions of retail sales, including Redbook, Case-Shiller home prices, the Chicago PMI and consumer confidence.

Market News notes that the Cleveland Fed “stress index was -1.985615407 last Friday, or a “low stress” period (the dividing line is -0.623). This was “the lowest level of stress seen in the history of the CFSI (tracked since Sept. 25, 1991). This contrasts the “normal stress” levels of -0.354477278 seen Oct. 8, at the height of jitters about the government shutdown and debt ceiling.” Two things: the Cleveland Fed is not very bright to publish an index that goes out so many decimal places. It can’t catch on, however useful it may be.

Life is too short to deal with so many decimal places. And secondly, how could stress have been “normal” in early October when the government was shut down? This implies either that the government doesn’t count—from a data perspective, not true—or the Cleveland Fed is not measuring something correctly.

Well, never mind. Nobody has his shorts in a twist over much of anything. Even the worries—Chinese hard landing, European bank capital adequacy and stress tests—are only dimly glimpsed off in the future. And that leaves the Fed’s tapering as the single biggest factor on the table today. The big picture is divergence between the US and Europe on economic growth and monetary policy. It doesn’t get any bigger than that.

Europe is going to have a negative 0.4% GDP in 2013, according to the ECB itself and while the US won’t sustain Q3’s 4.1%, it won’t be a contraction. And yes, crummy data can still get the Fed to pause or even reverse tapering, but the Plan is to taper every month until extraordinary accommodation is gone before year-end. We don’t need the ECB to cut again for the spread to widen. It now looks like the BBK is adamantly opposed to any sign of dovishness on Mr. Draghi’s part, but you never know and everyone will be watching the inflation/deflation data like a hawk. BBK opposition or not, if deflation persists, the expectation will grow of a showdown between Draghi and Weidmann. Our money is on Draghi.

The outlook for the euro is, therefore, for a crash-and-burn. We don’t know the extent of euro repatriation by banks or whether the calendar year-end brings an abrupt halt (probably not), but at some point divergence will count. Watch that resistance line around 1.3890. You will not be alone. Everyone can see the line.

Happy new year to all!

Note to Readers: No reports tomorrow. Markets are closed. Don’t laugh—every year we get at least one email on Christmas and New Year’s Day asking where is the morning report.