Will Cunliffe
Research Analyst, The Officials
Strong Set of US Data, AirBus 2026 Guidance, KOSPI Index Higher
Strong US Data; credit market warning signs; US yields up; KOSPI at new ATHs
A strong set of US data: December building permits were over 1.4 million, above expectations and rebounding 4.3% m/m from November’s weakness.
Good (ish) news extended into durable goods orders in December, which beat expectations – though still dropped 1.4% m/m coming off November’s pre-Christmas boom.
Even the ailing industrial sector performed well, as industrial production expanded 0.7% m/m. It was particularly boosted by output for utilities – although capacity utilisation remains 3.2% below its 1975-2025 average.
But US credit market is still blaring warning signs: the 60+ day delinquency rate on US subprime auto loans is at a record 6.9%, according to Fitch. That also does look likely to let up with Fed minutes detailing officials see rates near neutral after 75bp of cuts last year. Higher for longer again?
US yields edged higher as rate-cut hopes faded, with the 2Y at 3.47%, 10Y at 4.10%, 30Y at 4.72%, but still remain suppressed relative to a month ago (Figure 1). The dollar firmed, pushing USD/JPY above 155 despite rate checks from the Fed, while GBP/USD hovered near 1.35 under pressure.
Airbus’ 2026 guidance came in light as Pratt & Whitney engine constraints cap output of the A320 family, its key profit engine. Management sees ~870 deliveries versus consensus near 900, with free cash flow €4.5bn – effectively flat vs 2025. Airbus stock fell 5.5% on the news.
The KOSPI index continues to tear higher reaching another ATH today at 5680, breaking above the 5,600 mark for the first time, driven by strong gains in semiconductor and AI-linked heavyweights. Samsung Electronics +4.9%, shipbuilders jumped sharply, and institutional buying dominated. The won weakened to 1,445.5 per USD, while bond yields rose, with 3-year at 3.18% (+3.6bp).
Data today: US trade data, pending home sales, Japan inflation
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