In December, the contraction in the U.S. manufacturing sector slightly eased, according to data from the Institute for Supply Management. The Purchasing Managers’ Index (PMI) increased from 46.7 in November to 47.4 in December, versus market expectations of 47.2. However, S&P Global data on Tuesday indicated that the U.S. manufacturing sector was still contracting in December, particularly due to a sharper decline in new orders, which fell from 49.4 to 47.9.
In December, Japan’s industrial activity contracted at the fastest pace in 10 months. The final au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) declined from 48.3 in November to 47.9 in December. This marked the weakest level since February and remained below the 50 threshold, indicating contraction, for the seventh consecutive month. Both production and new orders decreased at the fastest rate since February, influenced by market uncertainty both in Japan and internationally. Input prices increased at their fastest pace in three months due to higher raw material costs.
In December, China’s services sector expanded at the fastest pace in five months, driven by a significant increase in new business. The Caixin/S&P Global Services Purchasing Managers’ Index (PMI) rose to 52.9 in December, compared to 51.5 in November. Firms attributed the improvement to a rise in customer numbers and spending, fueled by robust growth in new business, reaching the fastest pace since May. Foreign demand for Chinese services also increased.
The 6M Euribor is unchanged at 3.86% compared to previous business day. The 10Y Swap decreased with 5 basis points to 2.47% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Construction spending in the United States increased in November, according to data released by the U.S. government on Tuesday. On a monthly basis, expenditures rose by 0.4%. Analysts had expected an increase of 0.6%. On an annual basis, construction spending in November increased by 6.2%.
In November, the money supply in the eurozone declined again, as indicated by data from the European Central Bank released on Tuesday. On a year-on-year basis, the broad money supply, known as M3, decreased by 0.9%, following a contraction of 1.0% in October. Credit provision to households increased by 0.5% in November, compared to a growth of 0.6% in October.
In December, the industry in the eurozone contracted again, albeit to a lesser extent than in previous months, as indicated by the final figures released by S&P Global on Tuesday. The Purchasing Managers’ Index reached 44.4, compared to 44.2 the previous month, marking the highest level in seven months. An index reading above 50 indicates growth, while a reading below 50 indicates contraction.The 6M Euribor decreased with 2 basis points to 3.86% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.52% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The United States was South Korea’s largest export market in December for the first time in two decades. This dethroned China as the most important market for the export of South Korean goods such as computer chips, electronics and cars.
Danish shipping group Maersk is pausing transit through the Red Sea for 48 hours after one of its ships was attacked by Houthi rebels. According to the shipping company, the ship, the Maersk Hangzhou, was attacked on Saturday evening and Sunday morning. The US Navy present in the area said it sank three of the four attacking boats.
On January 1st , the ‘Omgevingswet’ (new Dutch law) came into effect, consolidating various construction and environmental laws. However, the House of Representatives expresses concerns about the implementation, especially regarding potential complications in permit processes and errors in permit issuance. Additionally, the readiness of municipalities for the Environmental Law is being questioned. To prevent potential issues with the implementation of the law in municipalities, they are given the option to gradually introduce the law and temporarily maintain the old procedures.
The 6M Euribor decreased with 1 basis point to 3.88% compared to previous business day. The 10Y Swap increased with 7 basis points to 2.49% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The number of new unemployment benefit claims in the United States increased in the week of December 23, according to data released on Thursday by the U.S. Department of Labor. The number of new claims rose by 12,000 to 218,000, exceeding the expected 210,000.
The oil prices declined on Thursday evening, partly due to reduced concerns about disruptions to shipping in the Red Sea, despite ongoing tensions in the Middle East. A barrel of West Texas Intermediate closed at $71.77, reflecting a 3.2% decrease.
In response to the recent water issues, the Union of Water Authorities emphasizes the need for significantly more financial resources to protect the country from water overflow. The latest cost estimates for the High Water Protection Program until 2050 reveal a notable shift. While initially €12.6 billion was estimated as the required amount to get the primary water defenses in order, it is now indicated that a sum of €24 billion is required.
The 6M Euribor decreased with 1 basis point to 3.89% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.42% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
In November, industrial profits in China saw double-digit growth due to an improvement in the manufacturing sector. Despite this growth, weak demand continues to constrain expectations for business growth, prompting calls for more macroeconomic policy support. The 29.5% profit increase follows a 2.7% rise in October, but there is still an overall decline of 4.4% for the year so far compared to the same period last year. The growth is attributed to pro-growth measures, a low statistical base from last year, and seasonal factors.
Starting January 2024, the dividend tax rate for directors and major shareholders rises to 33%, contributing to increased dividend payouts in 2023 alongside other tax changes. To pre-empt the higher tax from January 1, DGA’s are paying themselves more dividends early. These advance payouts might generate temporarily higher tax revenue for the treasury than anticipated.
In November, economic activity accelerated in the United States, according to the Federal Reserve Bank of Chicago. The Chicago Fed National Activity Index rose to 0.03 from -0.66 in October, indicating above-average growth. All four broad indicators, including industrial production and employment, showed improvements. This fosters optimism about an economy that may be able to avoid a recession.
The 6M Euribor is unchanged at 3.90% compared to previous business day. The 10Y Swap decreased with 7 basis points to 2.38% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The British economy slightly contracted in Q3 according to new data from the ONS, the UK’s statistical agency. It shrank by 0.1%, contrary to earlier expectations of stability. Q2 of 2023 also showed zero growth, previously reported as a 0.2% increase.
In November, existing home prices in the Netherlands fell by 0.9% annually, a milder drop compared to the previous month’s 2.3% decline. Monthly, prices rose by 0.5% in November, less than the 0.7% increase in October. Since the low point in June 2013, housing prices rose, peaked in August 2022, then declined until June 2023 before rising again. In November, prices were nearly 93% higher compared to the June 2013 low. The Kadaster recorded nearly 1% more home transactions in November compared to the previous year, yet over the first eleven months of 2023, sales were over 5% lower than the same period in 2022.
In November, the US core inflation experienced a more significant annual decline than expected, dropping from 3.4% to 3.2%. Monthly, core prices increased by 0.1%. Regular inflation measured by the PCE decreased from 2.9% to 2.6%. US incomes grew by 0.4% monthly, meeting expectations, while consumer spending increased by 0.2%, lower than the predicted 0.3%.
The 6M Euribor decreased with 2 basis points to 3.90% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.45% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
According to The Wall Street Journal, the U.S. government is considering an increase in import tariffs on Chinese electric cars. This measure is being contemplated to safeguard the domestic production and sales of American cars. It appears that the Chinese auto industry continues to be capable of producing cars at lower costs than American automakers. In response, the Biden administration has already imposed a 25% import tariff on a Chinese automaker like BYD. There is now also the possibility that this tariff may be further raised.
On Thursday, final figures released by the U.S. Department of Commerce revealed that the growth of the U.S. economy in the third quarter was lower than initially reported. The economy showed a growth of 4.9% in the third quarter, as opposed to the previously reported 2.1% in the second quarter.
Recent government statistics indicate that the annual increase in consumer prices in Japan was lower in November compared to the previous month. The inflation rate, including the impact of fresh food and energy, now stands at 2.8%, as opposed to 3.3% one month earlier. Inflation has been above the Bank of Japan’s targeted level of 2% for nineteen consecutive months.
The 6M Euribor is unchanged at 3.92% compared to previous business day. The 10Y Swap is unchanged at 2.44% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
In November, consumer prices in the United Kingdom rose less sharply than in the previous month, according to data from the Office for National Statistics (ONS). On a yearly basis, the increase was 4.2 percent, while economists had expected a rise of 4.4 percent. In the previous month, the price level had risen by 4.7 percent. On a monthly basis, prices decreased by 0.1 percent, following a 0.4 percent increase in October. Producer prices fell by 2.6 percent on a yearly basis in November, which was also the case in October.
In December, the confidence of American consumers in the economy rose more than expected, according to data from The Conference Board. The Consumer Confidence Index increased from 101.0 in November to 110.7 in December, while economists had expected an increase to 104.5. The November figure was slightly revised downward from a previously reported 102.0. The sub-index for economic expectations for the next six months rose to 85.6, compared to 77.4 in November. An expectations index of less than 80 is considered a signal of a potential recession within a year, according to The Conference Board. The sub-index for the current situation also showed a strong increase, from 136.5 to 148.5.
In November, unemployment in the Netherlands continued to decline, according to figures from Statistics Netherlands. The unemployment rate decreased from 3.6 percent in October to 3.5 percent in November, after reaching 3.7 percent in September. The average number of unemployed individuals decreased by 2,000 per month over the past three months, reaching 357,000 in November. At the same time, an average of 15,000 people per month found paid employment. In November, there were 3.6 million individuals aged 15 to 75 without paid work.
The 6M Euribor increased with 2 basis points to 3.92% compared to previous business day. The 10Y Swap decreased with 5 basis points to 2.44% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
On Tuesday, eurozone bond yields declined, reversing the previous day’s increase, as investors anticipated the possibility of significant interest rate cuts by the European Central Bank next year. Germany’s 10-year yield was last down by 7 basis points (bps) at 2.01%. This was just above the nine-month low reached the day before, before ultimately rising by 6 bps.
In November, inflation in the eurozone further decreased, as indicated by a preliminary estimate in the definitive figures released by Eurostat on Tuesday. Consumer prices rose by 2.4% last month, as previously reported. In October, this figure stood at 2.9%. The core inflation rate, a crucial gauge for the European Central Bank (ECB), was 3.6% on a yearly basis in November, compared to 4.2% a month earlier. This measure excludes the volatile prices of energy, food, alcohol, and tobacco. On a monthly basis, consumer prices in the eurozone declined by 0.6% in November, slightly more than the expected decrease of 0.5%.
The European Union announced on Tuesday morning that it will not impose import duties on the import of American steel and aluminum until March 31, 2025. This decision was made public by the European Commission. The previously imposed import duties by the EU during Donald Trump’s presidency were in response to the tariffs imposed by Washington on European steel and aluminum. In 2022, Brussels suspended these duties until the end of 2023, and it has now been decided to extend this suspension until March 31, 2025. In exchange, Washington is waiving certain quotas on steel and aluminum from Europe. The 6M Euribor decreased with 1 basis point to 3.90% compared to previous business day. The 10Y Swap decreased with 6 basis points to 2.49% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Low economic growth
The Dutch central bank (DNB) has lowered its economic forecast, predicting minimal growth for the Netherlands in the coming years due to global economic challenges, including a slowdown in world trade. GDP is expected to rise by only 0.3% next year. DNB attributes the sluggish performance to a weakened world economy, citing factors such as increased interest rates affecting spending and investments, particularly in China.
Nippon Steel Acquisition of US Steel
The Japanese steel giant Nippon Steel made a bid of $55 per share for US Steel on Monday, a significant premium of approximately 40 percent over Friday’s closing price and a premium of more than 55 percent compared to the initial offer from the American Cleveland Cliffs. The transaction has been approved by both boards of directors.
Japanese Interest Rate remains Negative
The Bank of Japan kept the main interest rate unchanged during the monetary meeting on Tuesday, as indicated by the decision of the Japanese central bank. This means that the short-term interest rate remains at minus 0.1 percent. The decision was unanimous.
The 6M Euribor decreased with 3 basis points to 3.91% compared to previous business day. The 10Y Swap increased with 6 basis points to 2.55% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
