In today’s briefing:
- The Drill – The China Meltdown Is Ruining the Upbeat Trends in Manufacturing
- A Hindenburg Omen in an Oversold Market
- CX Daily: Even More European Airlines Drop China Routes
- EA Inflation Less Excessive Near Peak
- Thailand: Policy Rate Held At 2.25% (Consensus 2.25%) in Dec-24
- Indonesia: Policy Rate Held At 6.0% (Consensus 6.0%) in Dec-24
- UK Inflation Extends Broad Rebound
The Drill – The China Meltdown Is Ruining the Upbeat Trends in Manufacturing
- Happy Tuesday, and welcome back to our weekly commodity editorial, where we keep you updated each and every week on what’s going on in the world of commodities, energy, and the like!
- It’s hard to talk about commodities without talking about China these days, as we have seen a complete reversal in the Chinese macro scene after we scouted last week for the best commodity plays should the Chinese stimulus come through.
- After all, they used the same wording as they did back in 2008, and it was wise of markets to “cry wolf,” as China would need to publish actual stimulus plans and their size before markets chased the story.
A Hindenburg Omen in an Oversold Market
- What happens when an ominously sounding Hindenburg Omen occurs when the market is oversold? The notoriously unreliable Omen is said to have called “ten of the last three market corrections”.
- The market’s reaction to the FOMC decision added to the risk-off market tone. The Fed marked down the number of 2025 quarter-point rate cuts from four to two.
- Four of the five components of our Bottom Spotting Model have flashed buy signals. Two or more simultaneous buy signals have been good long entry points for traders.
CX Daily: Even More European Airlines Drop China Routes
- Airlines / In Depth: Even more European airlines drop China routes
- Fraud /In Depth: China fleshes out telecom fraud rules to ensure punishments fit the crime
- Temu /: Temu suffers first big setback as Vietnam suspends its operations
EA Inflation Less Excessive Near Peak
- The final Euro area inflation print for November trimmed its rise by 4bps, rounding it down to 2.2% y-o-y. Revisions were broadly spread over the special aggregates.
- Median inflation remains close to annualising at 2%, although Germany is excessive like the UK. Our projections for underlying pressures softened slightly over the past month.
- In our view, EA inflation will still slow to the 2% target in a few months and stay near there through 2025. Forceful ECB easing could break that benign outlook.
Thailand: Policy Rate Held At 2.25% (Consensus 2.25%) in Dec-24
- The Bank of Thailand unanimously maintained the policy rate at 2.25%, aligning with consensus expectations, citing alignment with economic potential and inflation within target expectations.
- Economic growth projections for 2024–2025 remain steady, but uneven sectoral recovery, particularly in manufacturing and SMEs, presents ongoing risks to sustainable recovery.
- Global economic uncertainties, credit growth trends, and the efficacy of government debt-relief programmes in supporting domestic demand and financial stability will influence future policy decisions.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Indonesia: Policy Rate Held At 6.0% (Consensus 6.0%) in Dec-24
- Bank Indonesia held the BI-Rate at 6.00%, consistent with expectations, focusing on exchange rate stability and inflation control within the 2.5% ±1% target range amid heightened global uncertainty.
- Strengthened pro-market monetary operations and macroprudential measures aim to attract foreign capital inflows and support credit growth in priority sectors, sustaining financial stability and growth momentum.
- Future policy adjustments will depend on inflation dynamics, external shocks, and capital flow trends, as global risks, such as slower Fed rate cuts and rising US yields, constrain monetary policy flexibility.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
UK Inflation Extends Broad Rebound
- UK inflation matched expectations by increasing to its highest headline pace since March, although this doubled the BoE’s forecast error to 0.2pp (0.1pp in services).
- Only one division contributed much less to the monthly impulse than last year, with the median rate remaining excessive at 3% amid broadly high unit labour cost rises.
- An early December index date will likely be used, weighing on airfares in the short term. Our forecast still gaps higher than others in 2025 despite the consensus rising.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
