OAT: Block trade

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Eurozone November industrial production is due for release Wednesday, with our tracking estimate pointing to a reading between 0.2% and 0.3%, broadly in line with the Bloomberg consensus of 0.2% M/M. However, we estimate IP excluding Ireland grew around 0.8% M/M, a solid rebound from -0.4% in October. We also estimate an upward revision to the October reading from flat to between 0.1-0.2% M/M. 

• IP rose in five of the seven largest Eurozone members in November, with the remaining two recording negative M/M readings.
• Ireland skewed the value down, recording a fall of 5.8% M/M, reversing October's increase of 5.0%. We estimate this contributes a negative 0.53ppts to EZ IP in November. Spain IP also contributes a negative 0.12ppts with production falling 1.5% M/M - the steepest fall of 2024 so far following growth of 0.9% in October.
• Moderating the downward move, Germany IP rose 1.3% M/M (following two successive months of decline at -0.4% in Oct and -2.5% in Sep), contributing around 0.4-0.5ppts to the Eurozone wide industrial production reading. Belgium IP recorded solid growth of 8.7% M/M - the highest rate recorded in 2024, following a fall of 4.9% in October. French IP also increased slightly by 0.2% M/M (vs -0.3% in October), as did the Netherlands, printing 1.5% M/M (from 0.4% in October). Finally Italian IP rose 0.3% M/M (from 0.1% in Oct).
• Note, Eurostat uses industrial production numbers excluding construction, so the above country numbers may not reflect what was published as headline IP data from the national statistics agencies.

• The centre-left Socialist Party (PS) has talked up a suspension of the reforms as its price for supporting the gov't in a post-speech censure vote, and indeed votes on the social security budget and state budget. The PS executive is set to meet at 1300CET (0700ET, 1200GMT), and it remains to be seen whether the party and its 66 deputies will back, abstain, or vote against the gov't come the probably Thursday 16 Jan censure vote. 
• Should Bayrou's middle-ground approach on pension refrom fall short of PS demands then it remains to be seen whether the Bayrou gov't can last. Depending on the nature of censure motions - whether it is put forward by the gov't, far-left or far-right will impact support - should the left-wing New Popular Front alliance (in which the PS sits) and the far-right National Rally vote against Bayrou it would be enough to see the gov't defeated, risking further political paralysis.