Weekly economic and financial commentary

Summary

United States: Data Came in Like a Butterball

• Anyone who has ever gobbled until they wobbled can tell you it can be challenging to digest too much at one time. In the financial world, you know it's Thanksgiving when you get a full slate of economic data stuffed into one day. Nobody is relegated to the kids table as we break down what all this data mean for the outlook.

• Next week: ISM Manufacturing Index (Mon.), ISM Services Index (Wed.), Employment (Fri.)

International: Reserve Bank of New Zealand Eases Into Summer; German Business Sentiment Shivers

• It was a relatively light week for international economic data and events. The Reserve Bank of New Zealand delivered its second consecutive 50 bps rate cut to reach a policy rate of 4.25%, and Governor Adrian Orr signaled the possibility for another move of the same size in Q1 if the outlook evolves as expected. Australia monthly CPI data were somewhat mixed though showed stickiness in underlying price pressures, and German Business Sentiment data were somewhat disappointing.

• Next week: China PMIs (Sat.), Australia GDP (Wed.), Reserve Bank of India Policy Rate (Fri.)

Credit Market Insights: Credit Demand Rises Alongside Application Rejection Rates

• Consumer credit demand broadly rose compared to the start of 2024. At the same time, rejection rates for applicants across consumer credit products have remained elevated, demonstrating that consumers cannot rely on credit to sustain their spending patterns to the same degree they have been able to in prior cycles.

Topic of the Week: And So It Begins

• President-elect Donald Trump proposed a 25% tariff on all imported goods from Mexico and Canada and an additional 10% levy on all products from China this week. President Claudia Sheinbaum has signaled that Mexico is prepared to respond with retaliatory tariffs. How important are Canada and Mexico to U.S. imports?

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