US retail sales show continued strength

The value of headline US retail sales rose 0.6% m/m in November, the highest pace of growth since July, and follows a small decline in October. While some of the November strength was due to vehicle sales, retail sales excluding autos still rose 0.5% m/m, suggesting that there was continued resilience in consumer spending despite the government shutdown.

US producer price inflation for total final demand rose 3.0% y/y in November, up from 2.8% in October. On a month-on-month basis PPI rose 0.2%, an increase from the 0.1% gain the month prior. Much of the increase in producer prices on the month were driven by energy costs.

Today’s Economic Data and Events

• 10:00 SR CPI (Dec)
• 11:00 UK GDP (Nov): forecast 0.1% m/m
• 11:00 UK industrial production (Nov): forecast 0.2% m/m
• 14:00 EC industrial production (Nov): forecast 0.5% m/m
• 17:30 US initial jobless claims (w/e Jan 10): forecast 215k

Fixed Income

• US Treasury yields fell on Thursday, driven by haven demand. The 10yr yield fell almost 5bps to 4.132%, while the 2yr yield declined by 2bps to reach 3.5097%.
• There were widespread declines in European bond yields on the day. The 10yr UK Gilt in particular declined by just under 6bps to 4.338%, their lowest level since December 2024.

FX

• The dollar spot index saw a small declining, falling by less than 0.1%. EURUSD was broadly unchanged at 1.1644, while GBPUSD gained 0.2% to 1.3443. USDJPY fell 0.4% to 158.46.
• In emerging economies, USDINR rose 0.1% to 90.3, USDEGP gained 0.4% to 47.3, and USDTRY rose by 0.05% to 43.1809.

Equities

• US saw further falls on Thursday, with the US producer price print doing little to change the immediate outlook for rates. The S&P 500 declined by 0.5%, the Dow Jones fell 0.1% and the NASDAQ dropped by 1.0%.
• Moves in European stock markets continued to be mixed. The Euro Stoxx 50 index fell 0.4%, the FTSE 100 gained 0.5%, the DAX fell 0.5%, and the CAC 40 declined by 0.2%.
• In local markets the DFM fell 0.9%, and the ADX declined by 0.8%. The Tadawul rose 0.5%.

Commodities

• Continued geopolitical tension saw oil prices rise once again on Thursday. Brent futures rose 1.05% to USD 66.52/b, while WTI rose 0.9% to USD 62.02/b. Prices have fallen back in early morning trade after President Trump said he had received assurances from Iran on the safety of protestors.
• Metal prices hit record highs during Thursday’s session. Gold rose 0.9% to USD 4,626.58/troy oz while silver rose 7.1% to USD 93.16.95