Global Economy Briefing: December 26, 2025

Key Points

• Holiday-thinned trading dominated as much of Europe, the UK, Australia, South Africa, Canada, New Zealand, and Hong Kong were closed.
• Asia offered the only fresh signals: Singapore’s factories cooled month on month but stayed strong year on year; India’s reserves hit a new high; China’s profit rebound stalled.
• Brazil showed steady bank credit but heavier FX outflows, a reminder that, as our reporting has consistently shown, policy credibility still matters when liquidity is thin.

Most major centers observed Boxing Day or St. Stephen’s Day, leaving global liquidity light and price moves more fragile than usual. With few Western data releases, Asia set the tone and EM flows drew focus.

Asia-Pacific

Singapore’s industrial production fell 10.2% m/m after a sharp October surge, yet output still rose 8.3% y/y.

That mix—volatile month to month, firm year to year—fits an electronics up-cycle that helps Asian exporters while keeping global goods inflation contained.

India’s FX reserves climbed to $693.32B, reinforcing the rupee’s buffer and lowering funding risk for regional trade.

China’s year-to-date industrial profits were up just 0.1%, down from 1.9% previously. The profit stall explains why China is still exporting disinflation to the world and why supply chains—not stimulus—are carrying the goods cycle.

Latin America

Brazil’s bank lending rose 0.9% m/m in November, the same pace as October, signaling steady domestic credit.

But FX flows showed a larger net outflow of $6.472B for the period, after a smaller −$1.601B previously.

The split is instructive: credit supports demand, yet international investors still demand clear fiscal anchors and predictable monetary signals, especially in thin year-end markets.

Europe & UK

Continental Europe and the UK were closed for holidays. The absence of new data leaves the recent trend intact: disinflation with fragile demand, but healthier external balances.

That backdrop remains friendly to exporters that buy inputs in dollars and sell into recovering services demand.

North America

Canada and large parts of the U.S. trading day ran on skeleton crews. With no fresh U.S. macro prints, front-end funding remained the principal driver; the holiday lull limited directional impulses.

What it means

Low liquidity magnifies noise, so read the day through its durable signals. Asia’s output and India’s record reserves keep the global cycle stable without reigniting inflation.

China’s profit softness caps upstream price pressure. Brazil’s outflows warn that credibility still sets the price of capital.

Practical tilt: keep a quality-duration bias; favor Asian exporters tied to electronics; back rule-driven EM stories with thick reserves; be picky on Brazil until flows stabilize.

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