ASIA: South Korea, Taiwan PMIs Above 50.0, Supporting Broader Trade Outlook
EM Asia PMIs for Dec mostly ticked up relative to Nov outcomes, per the S&P global measures. Notably the South Korean measure rose to 50.1 from 49.4 in Nov, while Taiwan's rose to 50.9 from 48.8 prior. For both economies this is short of 2025 highs, but well up on earlier lows. The chart below plots the average PMI reading for South Korea and Taiwan, against global trade volume growth in y/y terms. The improvement in the PMI readings bodes well for the broader global trade outlook, although trade growth didn't slow materially as 2025 unfolded (despite negative sentiment via these surveys readings).
- In terms of the detail, for South Korea, new orders rose to 51 from 48.7 (which was the highest print since Nov 2024, via BBG). For Taiwan, new orders were also up on the prior month, which points to a positive outlook.
- Elsewhere in the region, Indonesia's PMI ticked down to 51.2 from 53.3 in Nov, so weaker but still remaining above the expansion/contraction line. The Philippines rose to 50.2 from 47.4, a positive sign after weaker H2 growth in 2025 as conditions were weighed by the mid year corruption scandal.
- Malaysia's PMI was unchanged at 50.1.
Fig 1: Global Trade Volumes & Average South Korea, Taiwan PMIs
Source: Bloomberg Finance L.P./MNI
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US STOCKS: S&P(ESZ5) - Consolidating Above 6800
The S&P(ESZ5) overnight range was 6812.25 - 6863.50, SPX closed +0.25%, Asia is currently trading around 6840. Risk and Crypto in particular has turned around what looked a fragile start to the week. The Bulls will be liking this price action as the market consolidates above 6800 before potentially having another run higher into year-end. I remain wary of getting bullish up here, but it's tough to argue with the price action. This morning the futures opened a little mixed, E-minis(S&P) +0.05%, NQZ5 -0.02%. On the day support should be back toward the 6750-6780 area as the market looks to potentially challenge 6900 again. Only a break back below 6700-6750 would potentially signal a deeper pullback.
- The S&P 500 Index Average True Range(ATR) for the last 10 Trading days: 80 Points
Fig 1: S&P 500 Index Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUD: AUD/USD - Moves Lower On GDP Data
The AUD/USD has stalled again towards the 0.6580 area reacting to a lower GDP print. "AUSTRALIA 3Q GDP RISES 0.4% Q/Q; EST. 0.7%" - BBG (Q2 +0.7% & 2.0% - revised), AUSTRALIA 3Q GDP RISES 2.1% Y/Y; EST. 2.2%". The AUD/USD moved very quickly back to 0.6555 after trading around 0.6575 going into it. {AUDUSD Curncy}
AUSTRALIA DATA: Q3 GDP Below Consensus, In Line With RBA Projections
Q3 GDP printed at 0.4% q/q & 2.1% y/y, weaker than Bloomberg consensus expected. Q2 was revised up to 0.7% q/q & 2.0% y/y from 0.6% & 1.8%. Household consumption rose 0.5% q/q. ABS press release can be found here. More details to follow.
