Global Economy Briefing: November 25, 2025

A cross-current day pointed to steady services, softer goods, and cooler consumer appetite into year-end.

Europe’s growth picture was flat but not falling—with Germany avoiding a Q3 contraction—while auto registrations across the big four showed post-surge payback.

In the United States, producer prices stayed contained and retail cooled, even as pending home sales surprised higher.

Latin America’s readings were mixed: Mexico’s demand steadied and its current account swung to surplus, while Brazil’s external gap narrowed as FDI stayed strong.

Asia offered small positives—Hong Kong’s trade improved and Korea’s factory sentiment rose—offset by a sticky Australian inflation mix.

United States

The demand pulse moderated. September retail rose 0.2% month-on-month, but the quality was soft: control sales fell 0.1% and ex-gas/autos rose only 0.1%.

Producer prices stayed contained (PPI 0.3% m/m; 2.7% y/y; core 0.1% m/m; 2.6% y/y), reinforcing disinflation.

Housing sent mixed signals: national house-price growth was flat to softer (FHFA 0.0% m/m; 1.7% y/y), yet pending home sales climbed 1.9% and the index reached 76.3—still low, but off the floor.

Confidence slipped (Conference Board 88.7), Richmond Fed activity weakened (manufacturing −15; services −4), and Texas services improved but remained negative.

Funding remained orderly (5-year auction 3.562%; 52-week bill 3.460%), M2 edged up to $22.30T, and GDPNow eased to 4.0%.

Interpretation: growth is cooling at the margins with disinflation intact—ammunition for the Fed to hold policy steady while watching labor.

Europe and UK

Germany printed zero Q/Q and 0.3% Y/Y in Q3, avoiding a fresh contraction. Sentiment in France softened (consumer confidence 89).

Auto registrations across the bloc normalized after outsized September gains: Germany up 6.2% m/m (7.8% y/y), France −0.6% m/m (+2.9% y/y), Italy −0.7% m/m (−0.5% y/y), and the UK down sharply m/m after a prior spike.

Sovereign funding costs nudged higher (UK 5-year 4.088%; Germany 5-year 2.270%).

Interpretation: the euro area remains a services-led, low-momentum expansion; the UK retail auto slump underscores fragile household demand under tight policy.

Latin America

Mexico’s story improved at the edges. Retail sales were flat on the month but accelerated to 3.3% y/y, and the current account swung to a $2.3B surplus (0.5% of GDP), easing external-financing risks.

Brazil’s current account deficit narrowed to $5.12B from $9.77B as FDI held strong at $10.94B, a constructive funding mix even as domestic activity has cooled.

Interpretation: both countries retain room for cautious monetary easing if disinflation persists and FX stays orderly.

Asia-Pacific

Hong Kong’s trade improved: exports +17.5% m/m, imports +18.3% m/m, with the deficit shrinking.

Korea’s manufacturing business sentiment rose to 70 from 68, pointing to a tentative factory floor. Japan’s corporate service prices eased to 2.7% y/y.

Australia was the outlier: construction output fell 0.7% q/q and trimmed-mean inflation firmed to 3.3% y/y alongside higher weighted-mean measures, a stickier mix for the RBA.

New Zealand’s RBNZ cut the policy rate to 2.25% from 2.50%, shifting to a gentler stance as growth slows.

Interpretation: Asia’s demand pockets and trade pulse help steady the region, but Australia’s core inflation argues for a longer “hold.”

Canada

Wholesale sales dipped 0.1% m/m and the new-home price index earlier showed ongoing softness, consistent with a cool goods sector and slower housing.

Interpretation: the BoC can stay patient; premature easing risks re-heating shelter inflation.

What it means

The day reinforced a soft-landing base case: disinflation continues without a growth cliff. U.S. retail composition and regional surveys warn against exuberance, but funding remains calm and housing shows selective resilience.

Europe is flat-to-modest with autos normalizing after base effects; the UK looks fragile. Mexico’s external turn and Brazil’s FDI support reduce EM tail risks.

Portfolio tilt: favor quality duration supported by contained PPI; overweight service-heavy U.S. and Asia exposures; be selective in European cyclicals; and in EM, prefer balance-sheet-clean stories with improving current accounts and credible disinflation.

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