“Nothing is perfect. Life is messy. Relationships are complex. Outcomes are uncertain. People are irrational.” – Hugh Mackay

1. Senate confirms Yellen to lead the Federal Reserve — the Senate approved the nomination of Janet Yellen to become the first woman to head the Federal Reserve. The chamber voted 56-26 in favor.
2. Another train carrying oil derails and catches fire in New Brunswick, Canada — A Canadian National Railway train carrying propane and crude oil derailed and caught fire in northwest New Brunswick, Canada in the latest in a string of train accidents that have put the surging crude-by-rail business under heavy scrutiny. A series of disastrous derailments has reignited the push for tougher regulation.
3. Chinese CPI drops more than expected — China’s inflation fell to 2.5% on year in December from 3% in November and came in below forecasts of 2.7%. The PPI dropped for the 22nd month in a row – the longest streak since the 1990s – with a decline of 1.4%.
4. FOMC minutes – QE benefit declining over time — according the latest minutes from the Federal Reserve, the majority of Fed policy makers argued that the marginal efficacy of QE was declining over time at the FOMC’s last meeting in December. Few members want a larger-than-announced taper.
5. China ‘overtakes’ US as world’s largest goods trader — BBC, China appears to have become the world’s largest trading country last year after the value of its imports and exports increased 7.6% to $4.16T. The U.S., which has held the crown until now, hasn’t released its 2013 figures yet, but its trade in January-November totaled $3.5T. In December, China’s export growth slowed to 4.3% from 12.7%; However, there have been concerns in recent months over the speculation that some Chinese exporters may be overstating their shipments in an attempt to bypass restrictions on bringing funds into the country.

The week ahead — Economic data from Econoday.com: