EUROZONE DATA: Industrial Production Ex-Ireland Set To Rebound In Nov
Eurozone November industrial production is due for release Wednesday, with our tracking estimate pointing to a reading between 0.2% and 0.3%, broadly in line with the Bloomberg consensus of 0.2% M/M. However, we estimate IP excluding Ireland grew around 0.8% M/M, a solid rebound from -0.4% in October. We also estimate an upward revision to the October reading from flat to between 0.1-0.2% M/M.
- IP rose in five of the seven largest Eurozone members in November, with the remaining two recording negative M/M readings.
- Ireland skewed the value down, recording a fall of 5.8% M/M, reversing October's increase of 5.0%. We estimate this contributes a negative 0.53ppts to EZ IP in November. Spain IP also contributes a negative 0.12ppts with production falling 1.5% M/M - the steepest fall of 2024 so far following growth of 0.9% in October.
- Moderating the downward move, Germany IP rose 1.3% M/M (following two successive months of decline at -0.4% in Oct and -2.5% in Sep), contributing around 0.4-0.5ppts to the Eurozone wide industrial production reading. Belgium IP recorded solid growth of 8.7% M/M - the highest rate recorded in 2024, following a fall of 4.9% in October. French IP also increased slightly by 0.2% M/M (vs -0.3% in October), as did the Netherlands, printing 1.5% M/M (from 0.4% in October). Finally Italian IP rose 0.3% M/M (from 0.1% in Oct).
- Note, Eurostat uses industrial production numbers excluding construction, so the above country numbers may not reflect what was published as headline IP data from the national statistics agencies.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
