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Service sectors remain resilient in the face of manufacturing softness
- The US ISM non-manufacturing index rose 1.1 points to 55.0 in December, above the consensus estimate of 54.5. The Chinese Caixin private sector PMI fell slightly to a still-robust 52.5 in December. This underscores that the consumption environment in the services sector remains robust in defiance of the ongoing weakness in the manufacturing outlook (which was underscored by last week’s data releases).
- New passenger car registrations in Europe in December rose a healthy +15.5% across the five major economies (Germany, France, UK, Italy and Spain).
- November Spanish industrial production was notably stronger than expected, rising +1.0% MoM. In Italy, production only rose +0.1% MoM, marginally above consensus expectations. French IP expanded by a better-than-expected +0.3% MoM.
- US nonfarm payrolls came in a touch behind expectations at 145k but this was sufficient to keep the unemployment rate steady at 3.5%.
Markets shrug off geopolitical tensions to touch new heights
- Equities continue to rally to new highs, yet government bond yields are only modestly (5-10bp) higher.
- Brent briefly traded up to close to $72/bbl on Mideast geopolitical tensions before collapsing nearly 10% the same day into the mid-60s.
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