T.G.I.F.
December 12, 2025
As 2025 sprints to the finish line, the weeks have gotten exhausting and confusing. Just under three full weeks remain, and the last two will be distorted by the holidays.
Overnight changes in the dollar have not been significant, but that doesn’t change the softening trend of the dollar since just before Thanksgiving. The DXY weighted dollar index has dropped 1.7% since November 21, while the historic anti-paper currency that is gold got as high as $4,371 per ounce overnight, returning to within $30 of its all-time peak of $4398 touched back in October. By contrast, crypto has sputtered late in what otherwise was a stellar year, dipping 0.2% overnight and trading currently a tad over 25% below its peak back in October.
In stock market action overnight, share prices fell 1.2% in Hong Kong but advanced by 1.5% in Singapore and India, 1.4% in South Korea, 0.4% in China and 0.2% in Japan. In Europe, equities are doing better in France, Italy and Spain than in the U.K. or Germany. The DOW and Russell 2000 indices have responded quite favorably to the Fed show in spite of profit-taking in the AI and other tech sector.
Ten-year sovereign debt yields rose so far today by four basis points in the United States, three bps in Germany, Italy, France and the U.K., and two bps in Japan and Spain.
Many central banks including the Federal Reserve conducted their last monetary stance reviews this week but thankfully not today. Attention next week will turn to the Bank of Japan, where a possible interest rate increase may be in play.
British October industrial production, construction output, trade and GDP data were reported today. GDP (-0.1%) failed to rise for a fourth straight month, posting a 0.1% average drop in the latest three months versus the previous 3-month period. On-year GDP growth of 1.1% matched September’s result and is down from 1.6% at mid-year. Construction activity declined 0.6% in October and posted a smaller 0.9% increase compared to the year-earlier month. October also saw the U.K. experience its largest goods-only trade deficit, GBP 22.54 billion in size, over the past 45 months. The broader goods and services deficit of GBP 4.82 billion constituted an 8-month high and easily exceeded deficits of 1.09 billion pounds in September and GBP 2.86 billion a year earlier. A 1.1% advance in industrial production during October beat expectations but followed a 2.0% slump in September.
Revised German consumer price data from November confirmed that inflation held steady at 2.3% overall and marking the fourth straight reading in a narrow 2.2-2.4% corridor. Unrevised French consumer price inflation of 0.9% last month likewise had that result for the third time in four months, and Spanish inflation settled back to September’s 3.0% from October’s 16-month high of 3.1%. Portuguese CPI inflation in November of 2.2% was at a 7-month low.
Romanian inflation has also plateaued lately, holding at October’s 9.8% in November and not far from September’s 27-month high of 9.9%. Serbian CPI inflation matched October’s 54-month low of 2.8%.
Indian consumer price inflation of 0.7% last month was below 1.0% for a third straight month and down from 5.5% in November 2024.
China’s struggles to sustain 5% economic growth were mirrored in bank lending and money stock expansion that stayed low in November by the standard of recent years. CNY 390 million of new yuan loans in November undershot expectations, while on-year growth in the M2 stock of money fell to 8.0% from 8.2% in October, 8.4% in September and 8.% in August.
The monthly rise in Japanese industrial production during October was revised 0.1 percentage point higher to 1.5%. A 1.6% year-on-year increase bettered the average 0.9% increase over the prior nine months of 2025 and the 2.4% drop in 2024.
Other countries reporting October industrial production today included Malaysia (+0.6% versus September and 6.0% year-0n-year), Mexico (+0.y% on month but down 0.4% on year) and Hungary (+0.5% on month but -2.7% on year).
Germany’s current account surplus in October totaled EUR 14.8 billion or about 4.5% of GDP. That’s down slightly more than a percentage point from last year’s mean but still quite solid.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: British trade and industrial production, German current account, Indian consumer prices, U.S. dollar
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