Recent data from the European Automobile Manufacturers Association (ACEA) highlights a dynamic shift in the automotive landscape as new car registrations in Europe show a slight increase. In December, new car registrations rose by 5.1% year-on-year, bringing the total to 10.6 million, a modest 0.8% increase. This growth, however, masks varied performances across different countries and car types.
Spain emerged as a resilient player with a 7.1% increase in new car registrations. The country led the charge, contributing significantly to the overall rise with a remarkable 28.8% year-on-year growth. In contrast, other major markets such as Italy, Germany, and France experienced declines of 0.5%, 1%, and 3.2%, respectively.
The composition of new car registrations reveals shifting consumer preferences. Petrol cars continue to dominate the market, accounting for 41.7% of all registrations. Following closely are battery electric vehicles (BEV) at 28.5% and plug-in hybrid electrics at 15%. Despite their leading position, petrol cars saw a slight drop in their share to 33.3% of new registrations. Hybrid electrics (HEV) captured 30.9%, while BEVs totaled 13.6%, marking a notable increase in their market share.
In the broader economic context, the ILO Unemployment Rate in the UK edged higher to 4.4% over the three months to November. Meanwhile, financial markets have been reacting to various global economic signals. The USD experienced a decline due to the absence of initial aggressive import tariffs. However, this trend partially reversed following headlines concerning Canada and Mexico.
US yields also underwent adjustments, with declines ranging between 4.5 basis points for 2-year bonds and 7.5 basis points for 5 and 10-year bonds. Notably, the 2-year US yield dropped to test intermediate support around the 4.20% area, with the December low of 4.08% still providing solid support against further corrections.
The EUR/USD pair faced pressure from risk aversion and strong US Dollar demand, exacerbated by tariff threats from US President Trump. The USD tested first support near the EUR/USD 1.0428 mark, with the early December top at EUR/USD 1.0630 expected to present a challenging resistance level.
In Canada, the Bank of Canada's Q4 2024 Business Outlook Survey revealed a subdued overall business sentiment, though firms began anticipating improvements in sales activity.