Global equities ended a quiet week relatively flat. US economic data were mixed. The November Leading Economic Index (LEI) was unchanged as expected, with gains from a steepening yield curve mitigated by slower building permits. Volatile Durable Goods Orders fell 4.6% m/m in November—less than the expected 4.8% decline—as new nondefense capital goods orders offset transportation weakness. November personal spending expanded 0.2% y/y, slightly missing estimates. The final third-quarter GDP revision was 3.5% annualized—better-than-expected and driven by firmer consumer spending and business investment.
Underappreciated expansions in the UK and eurozone remained intact. UK Q3 GDP was revised higher to 2.2% y/y as resilient consumer spending and broad economic growth continued to defy Brexit concerns.
Germany’s November producer prices rose 0.1% y/y, beating the expected 0.2% decline, as higher energy prices drove the first increase in more than three years.
France’s November producer prices rose 0.8% m/m, while November consumer spending of 3.3% y/y handily beat estimates.
Japanese November trade data were positive. Export volumes rose sharply to 7.4% y/y, bolstered by a weaker yen and accelerating demand for autos and auto parts in China, Europe and the US. The Bank of Japan left its annual asset purchase targets and yield curve control policy unchanged, but upgraded its economic assessment for the first time in 18 months on improved industrial production and exports.
In the week ahead, the US releases November pending home sales, wholesale and retail inventories and Case-Shiller housing prices are released. The UK posts December house prices. Japan reports November industrial output, retail sales and inflation while China releases its December manufacturing and non-manufacturing purchasing manager indexes (PMIs).