Key Points
• UK inflation cooled sharply (CPI 3.2% y/y; −0.2% m/m), while euro-area CPI slipped to 2.1% y/y and wage growth eased.
• U.S. housing demand softened and gasoline stocks surged, but crude drew and funding stayed orderly.
• Asia kept momentum: India’s PMIs stayed hot; Japan’s services led; Korea’s liquidity remained ample.
United States
Latest first. Mortgage rates ticked up to 6.38% and applications fell 3.8% (purchase index 176.5; refi 1,148.3).
PM speak dominated, but hard data pointed to balanced energy: crude inventories −1.274M barrels, gasoline +4.808M, distillates +1.712M; imports −0.719M; Cushing −0.742M; refinery runs +0.128M (utilization +0.3 pp).
Bills/notes stayed steady beneath the surface, though the 20-year auction tailed at 4.798%.
Read-through: consumption is cooling at the margin, but supply chains and funding remain calm—soft-landing consistent.
Global Economy Briefing: December 17, 2025
Europe and UK
Disinflation advanced. UK CPI fell to 3.2% y/y (core 3.2%); both headline and core were −0.2% m/m.
Producer prices were tame (PPI output 0.1% m/m; 3.4% y/y). CBI orders improved to −32. In the euro area, headline CPI eased to 2.1% y/y (−0.3% m/m); core held 2.4% y/y (−0.5% m/m).
Labor costs decelerated (wages 3.0% y/y; labor cost index 3.3%). Germany’s Ifo slipped (climate 87.6; expectations 89.7), keeping the outlook cautious even as inflation cools.
Translation: the ECB and BoE can stay on hold; price momentum is falling without a jobs shock.
Asia-Pacific
India stayed the regional engine: manufacturing PMI 55.7; services 59.1; composite 58.9.
Japan’s December flash showed two-speed growth (manufacturing 49.7; services 52.5; composite 51.5), while cross-border flows favored equities (foreign buying ¥528.3B; foreign bond buying ¥356.4B).
Korea’s money supply remained supportive (M3 ~₩6,032.5T; M2 7.1% y/y).
Net: demand is firm in services, goods are stabilizing, and regional liquidity is ample.
Latin America and Africa
South Africa’s inflation edged down (CPI 3.5% y/y; −0.1% m/m; core 3.2% y/y, 0.1% m/m), easing real-income pressure.
Brazil posted FX outflows (−$1.601B), a gentle warning on local financial conditions even as inflation has cooled in recent weeks.
Russia’s PPI turned negative (−0.9% m/m; −1.1% y/y), reinforcing global goods disinflation.
Canada
Large foreign inflows (C$46.62B) and net selling by Canadians (−C$11.58B) pointed to firm demand for CAD assets—supportive for funding while inflation trends near target.
What it means
Lower UK/euro inflation and cooling euro wages reduce global price risk. Asia’s services strength and ample liquidity keep growth positive without reigniting goods inflation.
U.S. gasoline builds remove near-term energy stress even as crude draws, keeping headline risk contained.
Portfolio tilt: keep a quality-duration bias; favor service-heavy U.S. and India exposure; add selectively to European exporters benefiting from cheaper inputs; stay cautious on Brazil until outflows abate.
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