Daily macro update

US: CPI (Dec.): 0.4% m/m as expected (prior: 0.3%)

• Core inflation remained moderate up by 0.2% m/m after 0.3% m/m prior month.
• Prices of energy were up by 2.6% m/m (0.2% m/m prior month) due to fuel oil and gas services prices.
• Core goods prices were up by 0.1% m/m (0.3% m/m prior month), but prices of used cars remained sustained (1.2% m/m after 2.0% m/m prior month).
• Services were up by 0.3% m/m (0.3% m/m prior month); prices have declined for lodging away and moderated for medical care and recreation services, but transport remained sustained (0.5% m/m). Shelter remained on a stable 0.3% m/m trend.
• Yearly trend has increased from 2.7% y/y to 2.9% y/y and core inflation declined marginally from 3.3% y/y prior month to 3.2% y/y. Disinflation has made very little progress on core inflation, but sub-components of services remained highly volatile.

US: Empire manufacturing (Jan.): -12.6 vs 3 expected (prior: 2.1 revised from 0.2)

• Business sentiment has sharply decreased from the prior month on weaker new orders and shipments, while prices (paid and received) have increased.
• The 6-month index has regained from the prior month on higher orders but also higher prices.

UK: CPI (Dec.): 0.3% m/m vs 0.4% expected (prior: 0.1%)

• Inflation remained moderate over the month, below consensus expectations. The yearly trend has declined from 2.6% y/y the prior month to 2.5% and from 3.5% to 3.2% y/y on core inflation. This improvement seemed mainly due to base effects and some moderation in services (hotels, package holidays).
• Details by sector offered a mixed picture: food prices were up by 0.5 % m/m (0.4% m/m prior month), energy up by 0.6% m/m (0.3% m/m prior month) and industrial goods up by 0.2% m/m (0.1% m/m).
• Services were up by 0.3% m/m (-0.1% m/m) with still volatile sub-sectors: travel (1.7% mm/ after -2.2% m/m), transport (4.2% m/m after -5.4% m/m) and package holidays (-0.6% m/m after -0.2% m/m); the yearly trend in services has declined from 5% y/y prior month to 4.4% y/y.
• These data reflect modest progress on disinflation but revealed still highly volatile inflation in sub-sectors, notably in services; the BoE may ease key rates in its next Feb. meeting, but a cautious stance will remain in place.

Eurozone: Industrial production (Nov.): 0.2% m/m as expected (prior: 0.2% revised from 0%)

• Activity remained positive thanks to a rebound in energy (1.1% m/m after -1.3% m/m prior month), and in durable consumer goods (1.5% m/m after -1.6% m/m prior month).
• By country, production was positive in France, Germany, and Italy over the month, but contracted in Spain; in other countries, production remained highly volatile on a monthly basis, pointing to ongoing weakness and fragilities.

France: CPI (Dec.): 0.2% m/m as expected (prior: -0.1%)

• Picture was mixed at sector level: food prices down by 0.1% m/m (flat prior month) and manufactured good prices down by 0.5% m/m (flat prior month); energy was up by 0.7% m/m and services up by 0.5% m/m (due to transport prices up by 6.8% m/m).
• Yearly trend has increased from 1.7% y/y prior month to 1.8% y/y.

UK: PPI Input prices (Dec.): 0.1% m/m vs 0.2% expected (prior: 0%)

• Fuel prices were up by 0.8% m/m after -0.6% m/m the prior month; yearly trend has reaccelerated from -2.1% y/y the prior month to -1.5% y/y.

UK: PPI Output prices (Dec.): 0.1% m/m as expected (prior: 0.4% revised from 0.3%)

• Price of coke and oil were up by 0.5% m/m after 3.8% m/m the prior month.
• Yearly trend has increased from -0.5% y/y the prior month to 0.5% y/y.

Germany: Wholesale price (Dec.): 0.1% m/m (prior: 0%)

• Yearly trend has regained from -0.6% y/y the prior month to 0.1% y/y.

Spain: CPI (Dec.): 0.4% m/m as expected (prior: 0%)

• Prices of clothes were down by 1.3% m/m (flat prior month) while recreation-culture prices were up by 4.3 % m/m ( -1.8% m/m prior month).
• Yearly trend has accelerated from 2.4% to 2.8% y/y for headline data and from 2.4% to 2.6% y/y for core inflation.

Sweden: CPI (Dec.): 0.3% m/m as expected (prior: 0.5%)

• Prices of transport and clothes remained sustained over the month.
• Yearly trend has declined for headline inflation from 1.8% y/y prior month to 1.5% y/y, and for core inflation from 2.4% to 2.0% y/y.

US: NFIB Small Business optimism (Dec.): 105.1 vs 102.1 expected (prior: 101.7)

• Sentiment in small and medium-sized firms has continued to rebound after the elections; views have improved on future economic situation and sales while perceived uncertainties have decreased.

US: PPI (Dec.): 0.2% m/m vs 0.4% expected (prior: 0.4%)

• Prices have moderated and came below expectations over the month.
• Producer prices were flat for services (0% m/m after 0.3% m/m prior month; only a strong rise in warehouses costs); prices of goods were up by 0.6% m/m (0.7% m/m prior month) and energy prices were up by 3.5% m/m (flat the prior month). Core inflation was up by 0.1% m/m as the prior month.
• Yearly trend has accelerated from 3% prior month to 3.3% y/y, but core PPI declined from 3.5% to 3.3% y/y.
• These data could limit worries on the bond market regarding inflation but were not a major change for the Fed.

Italy: Industrial production (Nov.): 0.3% m/m vs 0.1% expected (prior: 0.1% revised from 0%)

• Production was strong mining-refinery (10% m/m, electricity-gas (2% m/m) but was quite flat in the manufacturing sector (0.1% m/m).
• In manufacturing, production of consumer goods was up by 0.9% m/m while it has decreased by 0.6% m/m in capital goods.

Switzerland: Seco Consumer confidence (Dec.): -30.3 vs -37.8 expected (prior: -37.2)

• Consumer confidence has improved over the period. Nevertheless, the index remained close to its lowest levels.

Turkey: Current account (Nov.): -2.87bn USD vs -3.35bn expected (prior: 1.84bn revised from 1.88bn)

• Trade on goods turned under deficit not balanced by surplus in services.
• Official reserves were up by USD 1.37 bn after USD 4.86 bn the prior month.

US: Non-farm payrolls (Dec): 256k vs 165k expected (prior: 212k revised from 227k)

• The US economy added the most jobs since March, with the unemployment rate unexpectedly dropping from 4.2% to 4.1% while the labor participation rate remained steady. This strong performance supports the case for pausing interest rate cuts by the Federal Reserve.
• Job growth was driven primarily by the Education and Health Services sector (+80K), retail trade (+49K), and leisure and hospitality (+43K). However, manufacturing continued to struggle, losing 13K jobs for the fourth time in five months, totaling 87K job losses in 2024.
• Wage growth slowed from 0.4% to 0.3% in December, easing inflationary pressures. Following the report, Treasury yields and the dollar surged, while S&P 500 futures fell as traders adjusted their expectations for a potential rate cut later in the year.

US: Consumer confidence (Michigan) (Jan P): 73.2 vs 74.0 expected (prior: 74.0)

• Consumer sentiment was essentially unchanged in January, inching down less than one index point from December, well within the margin of error.
• The expectations subindex dropped to 70.2 from 73.3, while the current conditions measure rose slightly to 73.2 from 74. This divergence highlights a shift in perceptions: while concerns over the current cost of living eased, worries about future inflation intensified, likely linked to upcoming reflation policies of Trump.
• Year-ahead inflation expectations surged to 3.3%, the highest level in eight months, up from 2.8% in December. Long-term inflation expectations also increased, rising to 3.3% from 3%.

Switzerland: Unemployment rate (sa) (Dec): 2.6% vs 2.7% expected (prior: 2.6%)

• In 2024, the Swiss labor market experienced a downturn, with industrial production slowing due to a significant drop in demand. Conversely, labor shortages became less of a production hurdle as the need for skilled workers diminished.
• The seasonally adjusted unemployment rate rose slightly from a low of 2.2% at the beginning of the year to 2.6% in December. Over the year, the average unemployment rate was 2.4%, well below the long-term average.

France: Industrial production (Nov): 0.2% m/m vs -0.1% expected (prior: -0.3% revised from -0.1%)

• In November, industrial production rebounded slightly. The uptick was driven by a recovery in manufacturing output (0.2% vs. -0.1% in October), led by a sharp rebound in the manufacture of transport equipment (3.8% vs. -2.6%).
• On an annual basis, industrial production fell by 1.1%, following a 0.9% decline in the previous month.

France: Consumer spending (Nov): 0.3% m/m vs 0.2% expected (prior: -0.3% revised from -0.4%)

• Household consumption rebounded in November after a slight contraction the previous month. This increase was primarily fueled by a 0.9% rise in manufactured goods purchases, along with a modest 0.3% uptick in food consumption. However, looking at the bigger picture, overall consumption remains subdued and continues to trail below the 2015-2019 trend.