Global Economy Briefing: December 19, 2025

Key Points

• UK shoppers stayed cautious and Germany’s factory-gate prices fell, but Europe’s current-account surplus widened.

• The BoJ held 0.75% and China’s FDI slide eased, while Australia’s credit grew and commodity prices fell.

• U.S. housing inched up, confidence cooled, and oil rigs fell; Brazil’s deficit was funded by firm FDI.

United States

Existing home sales ticked up to 4.13 million (0.5% m/m). Confidence softened (Michigan: headline 52.9; 1-yr inflation 4.2%; 5-yr 3.2%) and the CB Employment Trends Index slipped to 105.80. Oil rigs fell to 406 (total 542), a gentle cap on supply growth.

Read-through: consumption is steady, not roaring; the energy backdrop is orderly.

Europe and UK

UK GfK confidence improved to −17, yet November retail slipped (−0.1% m/m; core −0.2%), with only 0.6% y/y growth.

Borrowing improved (public sector net borrowing −£11.65B). The CBI distributive survey fell to −44, flagging weak December trading.

In Germany, PPI was 0.0% m/m and −2.3% y/y; GfK climate fell to −26.9. France’s PPI jumped 1.1% m/m but remained −3.3% y/y.

Italy’s business confidence eased (88.4) as consumer confidence rose (96.6); October industrial sales fell 0.5% m/m.

The euro area posted a larger current-account surplus (€25.7B; €32.0B n.s.a.), while sentiment dipped (consumer confidence −14.6). Portugal’s current account improved to €5.254B.

Net: disinflation persists, households are wary, but external balances are a cushion.

Asia-Pacific

The BoJ held 0.75% and signaled continuity. China’s FDI contraction moderated (−7.5% y/y from −10.3%), still cautious but less alarming.

Australia’s private-sector and housing credit rose 0.6% m/m, while commodity prices fell 3.8% y/y—terms-of-trade pressure without a demand shock.

Latin America and Africa

Brazil’s current-account deficit narrowed slightly to $4.94B, funded by strong FDI ($9.82B). Mexico’s Q3 aggregate demand grew 1.1% y/y (0.7% q/q), with private spending up 1.6% y/y.

Colombia held at 9.25%. South Africa’s PPI steady at 2.9% y/y (0.0% m/m). Russia cut the policy rate to 16.00%, balancing inflation risks with growth.

Canada

October retail fell (headline −0.2%; core −0.6%), but the November flash rebounded 1.2% m/m. New-home prices were flat. Mixed signals keep the BoC patient.

Positioning and flows

CFTC showed heavier longs in copper and gold, lighter Nasdaq 100 length, and reduced natural-gas shorts.

GBP shorts covered, MXN longs grew, and EUR longs expanded—consistent with a softer-dollar, Europe-stabilizing view.

What it means

Europe’s external surplus and German PPI disinflation lower global goods-price risk even as UK demand limps.

A steady BoJ, milder China FDI declines, and rising Australian credit support Asia’s soft-landing arc. In the U.S., housing stabilizes and rigs retreat without stress.

Practical tilt: keep quality duration; prefer service-heavy U.S. and Asia; add selectively to euro exporters benefiting from cheaper inputs; favor Brazil and Mexico where external funding looks resilient.

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