French HCOB Construction PMI (Dec) 43.4 vs. Exp. 44 (Prev. 43.6)

• "The outlook for the new year is historically poor among French construction firms. Sentiment is shaped by weak order books, and companies lack confidence in any meaningful improvement in demand in 2026. The ECB’s room for further rate cuts appears exhausted, while long-term yields remain under pressure due to France’s ongoing fiscal concerns. Political uncertainty adds to the strain. The challenging environment is also evident among subcontractors, whose services are being used less frequently. They are responding with price concessions."

The French HCOB Construction PMI for December came in at 43.4, missing expectations of 44 and slightly below the previous month's reading of 43.6. This signals a continuing contraction in the construction sector, underpinned by weak order books and poor sentiment, which could limit the ECB's options for easing policy further amid fiscal concerns. Given the bleak outlook, traders should watch for implications on EUR movements and market sentiment towards French government bonds.