Global Economy Briefing: December 30, 2025

Key Points

• China’s official PMIs edged back above 50, hinting at a fragile goods-cycle floor without stoking inflation.
• The U.S. showed a housing pulse and a better Chicago PMI, while services stayed only lukewarm.
• Spain mixed a strong retail surge with still-elevated inflation; Brazil’s labor held up even as fiscal metrics widened.

United States

Housing showed mixed signals. Pending home sales fell 9.3% (index 71.8), undercutting the prior month’s 3.3% gain, though our reporting has shown that month-to-month swings in this series often reflect inventory constraints rather than a fundamental demand breakdown. Prices ticked up: FHFA +0.1% m/m (+1.8% y/y); Case-Shiller 20-city +0.4% m/m s.a. (−0.3% n.s.a., +1.4% y/y).

Industry improved but stayed in contraction: Chicago PMI 43.5 (from 36.3). Texas services were flat to soft (revenues 0.1; outlook −3.3). Holiday spending held up (Redbook +7.6% y/y).

Energy signaled comfort: API crude +1.7M; oil rigs 412 (total 546). Front-end funding was steady (3- and 6-month bills 3.57%/3.50%).

Translation: soft-landing mix—housing and consumers steady, factories mending slowly, no energy squeeze.

Europe and UK

Euro core CPI was 2.3% y/y. Spain blended resilience and stickiness: retail sales +2.9% y/y; CPI 2.9% y/y (HICP 3.0%), both +0.3% m/m.

The current-account swung to a €7.18B surplus, reinforcing Europe’s external cushion. Germany’s PPI disinflation from recent days remained the backdrop; confidence is still fragile into January.

Net read: imported disinflation persists, but Iberian prices run warmer than the bloc.

Latin America and Africa

Brazil’s picture split. Unemployment improved to 5.2% and formal jobs rose 85.86k in November, while pipeline inflation stayed tame (IGP-M −0.01% m/m).

But fiscal lines weakened: nominal deficit R$ −101.6B, primary swung negative (−R$14.4B), and debt ratios ticked up (net 65.2%; gross 79.0%).

South Africa’s monthly budget gap narrowed (−R14.99B vs −R35.83B). Mexico’s November fiscal deficit widened (−MXN 200.52B), correcting October’s unusually small shortfall.

Asia-Pacific

China offered the day’s swing factor: official manufacturing 50.1, non-manufacturing 50.2, composite 50.7; Caixin manufacturing 50.1.

That points to stabilization rather than stimulus-led reacceleration. Korea’s CPI eased to 2.3% y/y (0.3% m/m), keeping policy options open.

India’s external footing stayed steady (foreign debt $746.0B; M3 +9.3% y/y), adding to the region’s FX buffers.

Markets & liquidity

Holiday-thinned volumes kept moves contained. The FOMC minutes were the only notable U.S. timetable item late in the session, with no immediate funding stress evident.

What it means

Three threads line up: China’s back-to-50 PMIs reduce global hard-landing risk; the U.S. housing pulse supports demand without reigniting inflation; and Europe’s external surplus absorbs shocks even as Spanish prices run warm.

For positioning: keep a quality-duration bias; stay overweight U.S. and India service-led exposure; add selectively to Asia industrials geared to a cautious China goods floor.

Prefer euro exporters that buy dollar-priced inputs; remain selective in Brazil—labor is a tailwind, but widening fiscal metrics argue for discipline.

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