As with the eurozone, the US released its services and manufacturing PMI for December on Friday. The composite reading dropped to 53.6 this month from 54.7 the previous month, although given any figure above 50.0 shows growth, the sectors are still performing rather well, just not quite as good as the previous period.
We also saw industrial and manufacturing production figures. Year-on-year, industrial production grew by 3.9% in November from 3.8% the previous month. On a monthly basis, the figure was 0.6% which was quite the rebound from -0.2% the previous period and much better than the 0.3% the markets had expected. Manufacturing production dropped to 2% from 2.2% in October. Retail sales came in as expected at 0.2% in November from 1.1% the previous month, but this will likely pick up around Christmas.
Tomorrow we will see housing starts and building permits for December, but things really get interesting on Wednesday. The Fed will announce its interest rate decision and will almost certainly hike rates by 25 basis points to 2.5%. This is largely priced in by the markets so any dollar strengthening on the back of this is unlikely. If, however, there are indications that rates will rise much more gradually in 2019, then some dollar weakness is very possible. That would be to the benefit of sterling, so this week could be very volatile, what with the continuing Brexit uncertainty.
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