In the euro zone, growth in the monetary aggregate M3 accelerates from 3.4% y/y to 3.8% y/y, more than expected in November.
Economy
The few statistics published in the United States have been rather satisfactory. The manufacturing ISM in particular rose more than expected (from 48.4 to 49.3 vs. 48.2 est.) in December, which compensates for the fall in the Chicago PMI in December (from 40.2 to 36.9) . In October, house prices increased by 0.4% m/m, in line with expectations. In the euro zone, growth in the monetary aggregate M3 accelerates from 3.4% y/y to 3.8% y/y, more than expected in November (3.5% est.) In China, confidence purchasing managers improved in December and pleasantly surprised in the services sector (the PMI rose from 50 to 52.2) while it stagnated in the manufacturing sector (50.1 vs. 50.3 in november).
Planetary boundaries
According to the International Energy Agency (IEA), electrification will accelerate in the coming years. While electricity demand grew 1.4x faster than overall energy demand over the period 2000-2010 and twice as fast over the period 2010-2023, the IEA estimates that electricity demand will grow six times faster than global energy demand over the period 2023-2035. Remember that the electrification of uses is one of the keys to decarbonizing the economy.
Obligations
In the US, the manufacturing ISM marked a rebound (+0.9 m/m) although it is still in contraction territory, while the employment component continues to deteriorate (-2.8 m/m). Rates contracted slightly (2Y -5bp/10Y -3bp) as a result, in a week marked by low liquidity, a few days before the change of government and after the Fed cut its key rate by 25bp as expected on the 18th. December. In Europe, due to persistent political uncertainties, 10Y rates continued to rise (Bund +3bp/OAT +8bp).
Trader sentiment
Bourse
After seesaw sessions last week, we are getting to the heart of the matter with the publications of the final PMI and employment statistics on both sides of the Atlantic. The CPI and the PPI will also be published in the euro zone while in the United States, we will have orders for durable goods and the ISM for services among others. The indices opened in the green without much conviction.
Devises
After hitting a low of €/$ 1.0226 at the end of last week, the euro is attempting to rebound to 1.0340. At the start of the year, we remain positive on the dollar. The first trends will be given this week by the inflation figures in Europe and US employment. Traders remain cautious while awaiting the first statements from D.Trump on January 20. The franc weakened slightly to €/CHF 0.9380. The JPY remains weak at $/JPY 157.75. Our ranges are: €/$ 1.0225-1.0390, €/CHF 0.9256-0.9435, £/$ 1.2332, XAU/$ 2,606-2,668.
Markets
The good surprise in the ISM manufacturing index helped limit the decline in US stocks to -0.4%, while they were up 0.2% in Europe. The decline in emerging markets (-0.9%) is partly explained by the strength of the dollar (dollar index: +0.9%) which does not prevent that of gold prices (+1%). . 10-year sovereign rates are rather stable in dollars and euros, but the Fra-All “spread” is widening (+5bp to 79bp). To follow this week: ISM of services, “minutes” of the Fed, report on employment and household confidence (Univ. of Michigan) in the United States; consumer price indices, unemployment rates, EC confidence indices (economy, industry and services) and retail sales in the euro area; consumer and producer price indices, foreign exchange reserves and trade balance in China.
Swiss market
To be monitored this week: Retail trade turnover November (OFS), services turnover October (OFS), inflation December and 2024 (OFS), 2024 results (provisional) and foreign currency reserves at the end of December (BNS) and unemployment December and 2024 (Seco). Sika will publish its 2024 turnover and VAT Group its provisional 2024 results.
Actions
BYD (Satellites) sold 4,272,145 cars in 2024 (+41% y/y, after +67% y/y in 2023) and is the leading manufacturer on the Chinese market and the leading manufacturer of “New Energy Vehicles”. – NEV” on the global market.
The president of MICROSOFT (Core Holdings), Brad Smith, announced last Friday that the group plans to allocate $80 billion in capital expenditures (Capex) for the 2025 fiscal year. More than 50% of these investments will be dedicated to construction and the optimization of data centers, in order to meet growing demand for capacity and support the deployment of new technologies. This decision comes particularly in a context where Microsoft has encountered capacity constraints, affecting Azure’s growth over the last two quarters. Note that this amount greatly exceeds consensus expectations, which amounted to $62.5 billion according to FactSet.
UBS (Satellites): According to the WSJ, a US Senate committee investigation found that Nazi-linked accounts discovered by the bank in the 1990s were not disclosed to investigators. UBS has committed to resolving this issue by rehiring Neil Barofsky, the independent mediator whom CS had fired. UBS’s cooperation has been welcomed by US authorities and we do not anticipate a disproportionate financial impact.
Chart of the day
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