The contrast between US economic strength and Europe’s deflationary headache got even stronger this week. On Thursday, ECB President Draghi outlined his asset purchase plan but left investors with the impression that the program would be too little to beat deflation. Draghi said the ECB’s balance sheet would grow back toward €3 trillion compared to near €2 trillion today, suggesting that the potential universe of covered bond and ABS purchases is up to €1 trillion. Meanwhile, the September non-farm payrolls was +248K complemented by a combined 69K in upward revisions to July and August data. The unemployment rate declined from 6.1% in August to 5.9%, the lowest level since July 2008. The only sour notes were that wage growth was still pretty weak and labor force participation slipped lower. In China, the Occupy Central protest movement took over downtown Hong Kong, driving big sequential declines on the Hang Seng early in the week. The bourse closed for two days of holidays, fell 2% in early trading on Friday and then closed higher. There are real fears that Beijing will not tolerate much more unrest in the city. For the week, the DJIA slipped 0.6%, the S&P500 lost 0.8% and the Nasdaq fell 0.8%.

On Thursday, European stocks suffered their steepest one-day decline in more than a year after the ECB delivered mixed messages on its plans for asset purchases. The central bank indicated that the ABS and covered bond purchase program could rise to as much as one trillion euros over two years, but failed to detail how much it might start with. President Draghi said that the bank would make provisions in the ABS program to include some bonds from Cyprus and Greece that are below investment grade and monitor the impact of the ABS and TLTRO programs on inflation expectations in the “coming months, not coming years”. The statements suggest that possibility of sovereign bonds purchases – the ECB’s big, controversial policy bazooka – are off the table for quite some time. After the policy decision, reports indicated significant opposition to the ABS program (much less full blown QE). Hans Werner Sinn, head of Germany’s hawkish IFO Institute, said asset purchase program was outside the ECB’s mandate and called on the German government to counter the move. Reports suggest at least three ECB governors oppose parts or all of the ABS program: Germany’s Schaeuble is long on the record opposing any form of ECB asset purchases, Austria’s Nowotny is said to also oppose the program, while France’s Noyer opposes the use of external brokers to buy securities. In the wake of the ECB statement, the stocks in Italy plummeted 3.9%, Spain declined 3.1%, France dropped 2.8%, Germany fell 2.0%, and the Euro Stoxx dropped 2.4%.

In an echo of protest movement seen over recent years in Egypt, Ukraine, Iran and elsewhere, students and citizens in Hong Kong occupied public space last weekend and began agitating for free elections after Beijing demanded that it be able to vet candidates for local office. The protests drew a heavy-handed initial response from the police, who pepper sprayed crowds on Sunday. Students refused to leave parts of downtown and demanded that Hong Kong Chief Leung Chun-ying resign by Thursday. Leung refused, although he permitted negotiations between the students and the police. Beijing has been largely silent on the protests, however there were vague reports of troop movements near the city and a thinly sourced report that it had given Hong Kong leaders notice to resolve the problem quickly or have the Chinese military do it for them. There was another round of violence between the students and locals opposed to the protests (or paid thugs, alternatively) on Friday, but as of writing neither side seemed to have the upper hand.

Front-month WTI crude has moved lower all summer, declining from the ISIS/Ukraine highs above $104/barrel in June to just shy of 2014 lows around $88 on Thursday. The rise of the dollar is the prime candidate behind crude weakness, however other news out this week also contributed to the move below $90. There were reports Saudi Aramco lowered crude prices for November delivery by $1/barrel, and also cut prices for certain natural gas deliveries. This followed reports earlier in September that Saudi Arabia trimmed production levels in the past month. There has been talk among analysts that OPEC members are gearing up for a price war. OPEC has declined to call an extraordinary meeting to discuss the situation, and its next meeting is scheduled for November 27th. Brent crude slid to $92/barrel, more than 20% below its June peak.

Ebola arrived in the United States this week. The CDC confirmed the first case of Ebola was diagnosed Texas, where a traveler from Liberia has been hospitalized after spending time in his home country aiding Ebola victims. On Friday, Texas health officials said they were monitoring 50 people that the man had come in contact with and that 10 of them might be at high risk for contracting Ebola. Airline, cruise ship and hotel shares have been under pressure this week on the news.

Chrysler and GM reported September vehicle sales up 18.8% y/y and 19.4% y/y, respectively. Meanwhile Ford said its sales fell 2.7% y/y due to lower fleet sales and a planned pull-back on sales of its 2014 F-150 pickup as it prepares to introduce the 2015 all-aluminum F-150. The industry’s SAAR annualized sales rate cooled off to 16.43 million from the torrid 17.53 million pace in August.

Salix Pharmaceuticals called off a merger deal with Italy’s Cosmo Pharmaceuticals that was structured as a tax inversion. This comes just a week after the US Treasury took a series of steps to curb such deals and prevent companies from avoiding taxes. Since the Treasury announcement, the company faced pressure from top shareholders to cancel the deal and sell itself, possibly to Allergan or Actavis. Tibco Software agreed to sell itself to Vista Equity Partners for $4.3 billion, or $24/share. The sale comes after a difficult year for Tibco, which has faced declining profits and pressure from an activist investor to sell.

The rise of the dollar continued unabated this week, to the detriment of nearly every other global currency. Between disappointment with Draghi’s ABS plan and the very strong September US jobs report, nothing appears able to stop the greenback, and many analysts have started discussing a secular reversal in the 30-year downtrend in the dollar. EUR/USD tried to retake its 200-day moving average on Monday around 1.2710, and then broke to 1.2570 after the advance September Eurozone CPI reading slid to 0.3% v 0.3%e and the core reading came in lower than expected, 0.7% v 0.9%e. USD/JPY rose to 110.10 as of Tuesday, prompting a pullback to 108 later in the week. The pair retested 109.90 on Friday in the wake of the September US jobs report.

China mainland markets were on holiday for much of the week, however the Stats Bureau still put out the official PMI figures for September. The manufacturing sector reading remained just above the threshold of expansion at 51.1, a decimal better than consensus and unchanged from the prior month. New orders and Employment components marked notable declines, prompting government economists to assess the overall business sentiment as weak. Non-manufacturing PMI was also somewhat of a disappointment, falling to an 8-month low of 54.0 from 54.4 on marked deceleration in Services, Input Prices, and Inventories components. The Shanghai Composite returns for trading on Wednesday as Beijing prepares for the start of the party Plenum on October 20th that will hopefully yield a verdict on the future of PBoC Gov Zhou.