EBC Global Focus | Weak US Data Boosts Euro, S&P Global Plunges

On Wednesday (February 11), the euro rose above 1.19. U.S. retail sales growth in December fell short of expectations, and another report showed an unexpected slowdown in labor cost growth in the fourth quarter.

European Central Bank President Christine Lagarde said on Monday that after falling below the 2% target within the year, eurozone inflation is expected to stabilize at that target level, with economic uncertainty remaining.

UBS analysts raised their 2026 GDP growth forecast for the eurozone by 0.2 percentage points to 1.3%, while maintaining their 2027 and 2028 forecasts at 1.4% and 1%, respectively.

Over the next two years, stronger fiscal policies may offset the negative impact of Europe's deep demographic changes, namely aging impacting the workforce.

Thanks to export growth to the U.S. and China, Germany's exports in December exceeded expectations. However, industrial output declined during the same period, highlighting continued uncertainty in the economic recovery.

Last year, the EU and China attempted to restart diplomatic relations, but it broke down due to Beijing's imposition of rare earth export restrictions. Nevertheless, Europe's widening trade deficit with China remains a pain point.

The euro is operating within an upward channel, with the daily closing price failing to break through the 1.20 level. If the exchange rate continues to consolidate below this level, a reversal may occur.

Hot Products Briefing

As of the close on February 10, among EBC's main products, PulteGroup's stock price led the gains. Several institutional investors and hedge funds have recently increased or decreased their holdings in this homebuilder.

S&P Global's stock price plummeted after issuing lower-than-expected 2026 profit guidance, overshadowing its strong fourth-quarter performance. Moody's and S&P Global are facing pressure from AI-induced industry concerns.

Despite the weak performance of the Canadian dollar, Scotiabank noted that investor sentiment appears to have improved, turning net short positions into net long positions for the first time since August 2023.