FRANCE DATA: Consumer Spending Sees Energy-Driven Pullback In November
France real consumer spending saw a sizeable decline in November at -0.3% M/M (-0.1% cons), after an upward revised 0.5% in Oct (+0.1pp) and what had been a third consecutive increase. It was driven by a large drop in energy consumption alongside a more muted reversal lower in food consumption, which were only partially offset by increased spending on manufactured goods.
- On the whole, a pullback isn't concerning given recent strength, though the longer-term trend remains tepid at best.
- The headline Y/Y rate fell back to flat after just one positive reading since June, but this was October's notable 0.6% Y/Y (revised up 0.2ppt).
- Looking at monthly drivers, household spending on energy fell a sharp 2.0% M/M in November (vs +1.5% Oct) - driven by "both a decrease in gas and electricity consumption and a decrease in spending on petroleum products".
- Food consumption declined 0.2% (vs +0.3% Oct), in which an increase in consumption of agricultural (unprocessed food) products was offset by lower consumption of processed food products.
- Spending on manufactured products rose 0.4% M/M (vs 0.1% Oct), driven by further strength in spending on durable goods (0.5% M/M after 0.3% Oct).
- While the revisions added further strength to October's data, this does make the November numbers look weaker. INSEE notes some new data having been incorporated, and the seasonal and working day adjustments having been updated since the last release.
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SFRZ7/Z8 ~5.3K sold at 17.5.
GERMANY: Economy Minister Pushing For Earlier Lowering Of Corporation Tax
German economy minister Reiche (CDU) is supporting demands from the influential Bavaria PM Söder (CSU) on pulling forward the planned lowering (to 10% from 15%, in stages) in corporation tax from January 2028 to July 2026. "Given the serious situation in the German economy, we should examine whether earlier entry into force is possible", Reiche says, but also cautioned that before any decision is made, public budgets must be examined to determine the necessary scope for action.
- Tax changes in Germany are independent of the annual budget and thus would remain possible in theory for next year even after the 2026 budget was voted through in parliament late November.
- Counter financing would have to come from a) expenditure cuts b) tax rises c) GDP picking up quicker than expected or d) more creative accounting with the E500bln infrastructure fund.
SNB: Tomorrow's Meeting To Update Pricing Ahead As Hawkish Push Filters Through
- The global core FI hawkish repricing seen this week has filtered through to CHF-denominated OIS markets, and while implied odds for a cut at tomorrow's meeting little changed around 6%, pricing for the September 2026 meeting has implausibly risen to around a 10% chance.
- This is a notable deviation from levels seen just last Friday, when around 5bps of cumulative easing had been priced through the Sep-26 meeting. Tomorrow's end-of-horizon 2027 forecast, to be published with the rates decision, will be key input here.
- This forecast will provide strong evidence on how high the SNB judges the risk of inflation over the medium-term, and a noticeable revision of the current figure of 0.7% following the likely CPI undershoot in Q4 vs previous SNB expectations could provide a signal for market pricing ahead.
- Our full preview for tomorrow's decision (0830GMT/0930CEST) is here.
