LOOK AHEAD: Eurozone Timeline of Key Events (Times GMT)

November manufacturing production was weaker than expected falling 4.2% y/y, the sharpest contraction since August, likely impacted by recent severe weather events. The series can be volatile but the 3-month average is also negative holding at around -1% y/y. The S&P Global manufacturing PMI has signaled positive activity since May and a pickup in growth since August, which hasn’t materialized. The November PMI at 56.8 and the pickup in November business confidence signal that growth in the sector should improve. 

Thailand manufacturing

• Capacity utilization was also soft in November falling to 55.5 from October’s 57.8, the lowest since April 2023. It has trended lower since US President Trump announced reciprocal tariffs in April.
• The Bank of Thailand cut rates 25bp to 1.25% in December bringing cumulative easing in 2025 to 100bp in an effort to stimulate economic growth especially in the face of baht strength which has pressured the economy. The BIS THB NEER is up 4.9% y/y while USDTHB is down 7.7% y/y.
• USDTHB is up 0.4% to 31.20 in Monday’s APAC trading after reaching 31.23 but still well below where it started December and only just off the month low at 31.01 on 24 December. It has found support from rising gold price this year.

NZGBs closed slightly mixed, with a flattening bias after thin holiday trading.

• (MT Newswires) “New Zealand's construction industry is set for a 3.3% contraction in 2025 amid rising debt, declining building permits, labour shortages, and material costs, according to Research and Markets' report on Dec. 24.”
• “The sector is expected to recover from 2026 to 2029, growing at an average annual rate of 4.4%, driven by increased investment in transport, health, and education infrastructure, as well as government commitments to renewable energy and net-zero emissions targets, the report said.”
• (Financial Express) “India and New Zealand have agreed to deepen economic partnership by concluding negotiations on a Financial Services Annexe as part of the newly finalised Free Trade Agreement (FTA).”
• RBNZ-dated OIS pricing is little changed across meetings. No tightening is priced for February, while October 2026 assigns 24bps. In early December, the market had assigned ~50bps (see chart).
• Tomorrow, the local calendar will be empty until the Cotality Home Value data is updatedon January 1.

After Friday’s 10.3% jump in silver prices, they reached a new record high at $84.008, breaking above $84.00 briefly, early in today’s APAC session. They then fell to $75.197 in what looked like some profit taking following US President Trump’s positive comments regarding progress on a Ukraine peace deal, which eases geopolitical tensions. However, it recovered to breach $80 again and is currently up 0.7% today to $79.90. Thin holiday-related volumes are likely to cause volatility.

• Gold is still down on the day after falling to $4472.46 early in trading. It is currently down 0.5% to $4511.8. The US dollar index is slightly softer while the US 2-year yield is marginally higher.
• Precious metals have found support from lower US rate expectations, Fed independence concerns, rising government debt and geopolitical/trade issues driving inflows but silver has also been boosted by strong physical demand and thus a tight market. This has encouraged speculators and now there is uncertainty over how paper purchases will be covered by the physical metal.
• Bloomberg reported that silver’s 14-day relative strength index (RSI) is around 10 points into overbought territory. It also cited Elon Musk’s concern regarding the 40% rise in prices this month as it is an important input into the production of certain items.
• Equities are mixed with the Hang Seng up 0.3%, S&P e-mini flat but ASX down 0.4%. Commodities are generally stronger with WTI +1.1% to $57.34/bbl, copper +1.0% and iron ore at $106/t.
• Later US November pending home sales and December Dallas Fed manufacturing print.