Not even the weakest ISM-manufacturing print of 2025 could derail the enthusiasm, as benchmarks continued to advance following the release. The publication modestly raised slowdown concerns, however, reversing the greenback\u2019s notable gain while driving bids for Treasuries with the yield curve sinking in bull-flattening motion led by duration. Risk-on attitudes coincided with some investors that are wary of potential bumpiness down the road, causing the prices of volatility protection instruments to rise slightly as participants added portfolio hedges. Conversely, though, shares in the defensive utilities, consumer staples and healthcare sectors sold off. Elsewhere, cryptos regained their footing and forecast contracts experienced interest while prices of commodities ex natural gas appreciated.<\/p>\n\n\n\n
US Manufacturing Sinks to Weakest Level of \u201925<\/strong><\/p>\n\n\n\n Broad manufacturing sector weakness caused the Institute for Supply Management\u2019s (ISM) Purchasing Managers\u2019 Index to sink to its weakest reading of 2025. The headline December score of 47.9 fell below the contraction-expansion threshold of 50, the median estimate of 48.3 and November\u2019s 48.2 result. Persistent losses in employment, new orders, exports and work backlogs continued to weigh on overall performance, with those segments reporting dismal figures of 44.9, 47.7, 46.8 and 45.8. Prices increased at the same 58.5 pace as the preceding print, but elevated costs combined with lofty interest rates continued to hamper transaction momentum. However, factory activity could improve significantly because 100% first-year tax depreciation on capital expenditures kicks into gear this year, incentivizing investment, production and hiring. <\/p>\n\n\n\n Past performance does not guarantee future results.<\/p>\n\n\n\n Maduros\u2019s Capture Is Great for Inflation Expectations<\/strong><\/p>\n\n\n\n The capture of Maduro bodes well for Treasury bulls and Fed doves via lighter inflation expectations as Washington\u2019s actions in Caracas lead to greater control over energy supplies in the Westen Hemisphere. The military operation, paired with heavy production and subdued regulations in the US, are supportive of a continuation of low crude oil prices and reduced OPEC+ influence on total available barrels. The events are net positive for global economics and corporate profitability, especially in consideration of the rising power requirements of artificial intelligence. But there are risks associated with potential retaliation from Beijing and Moscow against the backdrop of those regimes craving land expansion of their own and possibly using the developments in Venezuela as a justification to ignore US priorities and warnings.<\/p>\n\n\n\n International Roundup<\/strong><\/p>\n\n\n\n China\u2019s Service Sector Growth Slows<\/strong><\/p>\n\n\n\n China\u2019s service sector\u2019s growth in December decelerated to the slowest pace since June with the S&P Global RatingDog General Services PMI falling from 52.1 to 52. The result matched the economist consensus estimate while remaining above the contraction-expansion threshold of 50, thereby extending the expansion to three years. <\/p>\n\n\n\n Declining export orders and tourism from foreigners caused overall sales to slow and strong competition resulted in businesses lowering their output prices. Conversely, input costs climbed due to labor and raw materials becoming more expensive. Despite these challenges, business confidence hit a nine-month high. Nevertheless, restructuring and costs resulted in the fifth consecutive month of staff reductions, which contributed to a slight increase in backorders.<\/p>\n\n\n\n Singapore Retail Sales Were Flat Relative to October<\/strong><\/p>\n\n\n\n November retail sales in Singapore were flat relative to October but were still up 6.3% year over year (y\/y), according to the Singapore Department of Statistics. The monthly metric slowed from 2.3% in October while the y\/y result was up from the preceding period\u2019s 4.4% print. Excluding motor vehicles, retail sales grew 0.8% in November, a decline from October\u2019s revised 3% expansion. Cash register activity climbed m\/m by the stated amounts in the following groups:<\/p>\n\n\n\n However, the following categories and the extent of their declines pushed the headline down:<\/p>\n\n\n\n Despite Tax Angst, UK Consumer Financing Grew in November<\/strong><\/p>\n\n\n\n The long-awaited Nov. 26 unveiling of the UK\u2019s tax hikes didn\u2019t appear to thwart household outlays with debt issuance during the same month jumping by a net 2.08 billion pounds ($2.79 billion). It was the largest increase in two years, according to the Bank of England. Both mortgage finance and consumer debt increased m\/m as follows:<\/p>\n\n\n\n In late November, Chancellor of the Exchequer Rachel Reeves submitted a budget that includes the eventual phase in of \u00a326 billion of tax hikes for plugging funding shortfalls. The changes include fees for online gambling, miles driven by electric vehicles, and charges for owners of properties exceeding \u00a32 million in value. She also slapped a cap on the amount of income that workers can shelter from National Insurance premiums via the country\u2019s pension program. The country\u2019s Office for Budget Responsibility estimates that nearly one in four taxpayers will pay some of the higher levies by 2031. <\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Traders came back from the holidays in high gear with stocks soaring on Monday and the Dow Jones Industrial Average reaching a fresh record. An eventful weekend featuring the ousting and arrest of communist Venezuelan dictator Nicolas Maduro generated outperformance in the energy sector as the US oil majors are poised to benefit from Washington\u2019s control of the crude-rich nation. <\/p>\n","protected":false},"author":903,"featured_media":210495,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[151,152,58,146,147,148,7],"tags":[362,291,314],"contributors-categories":[370],"class_list":["post-210487","post","type-post","status-publish","format-standard","has-post-thumbnail","category-asia","category-europe-middle-east-africa","category-ibkr-economic-landscape","category-macro","category-north-america","category-text-articles","category-traders-insight","tag-economic-outlook","tag-macro","tag-market-outlook","contributors-categories-ibkr-macroeconomics"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n![\"The](\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2026\/01\/image-8.png\")
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