Morning Macro 16th December
Indian inflation steadies somewhat, as WPI (wholesale) inflation dropped -0.32% y/y in November, showing a slower rate of deflation than in October and only half the expected fall. Fuel and food are pulling the measure down, while manufacturing inflation rose 1.33% – though that’s its slowest since Sep 2024. Indian rupee falls beyond 91 against USD, hitting all-time high of 91.0837. (Figure 1)
HSBC flash PMIs showed Indian manufacturing expanded at the slowest rate (55.7) in 2 years in December, continuing its rapid fall since October. Services outperforming with 59.1 expansion and a steadier trajectory than manufacturing.
US manufacturing continues to disappoint as well – the NY Empire State Manufacturing Index fell to -3.9 in December, far below expectations of 10.6, as shipments fell and inventories increased slightly. The prices paid index fell to its lowest since January yet optimism over future business conditions rose.
While rupee weakens, onshore yuan reached its strongest in 14 months aided by a stronger fix by the PBoC, near 7.04. (Figure 2)
Weakness across commodities and crypto: Brent below $60! (Figure 3) For the first time since May, Brent prices have fallen to under $60/bbl; Bitcoin drops to under $86k; gold finally softens after surge to $4,350/oz. Silver pulls back from record high on Friday, now trading just above $63/oz.
NFP data today includes both October and November data. Bloomberg Economics forecasts decrease in October followed by strong bounce back in November. No unemployment reading for October but half of November’s reference period was impacted by government shutdown.
Data today: NFPs, ZEW European sentiment, Japan trade data.
