What's going on?

The UK and Europe had better watch out: their respective business activity surveys didn�t show anything nice on Monday, and � wait, let us just check �em twice� yep, both places will be on Santa�s naughty list this Christmas.

What does this mean?

Activity in the UK�s manufacturing sector slowed sharply ahead of last week�s election, as uncertainty continued to weigh on the country�s businesses. And with factory production suffering its worst month in over seven years, speculation�s now rife that the economy as a whole might contract this quarter. There are reasons for businesses to be hopeful, mind you: the prime minister�s definitive win could provide the certainty they�ve all been craving.

In Europe, meanwhile, manufacturing activity fell for the eleventh straight month as the US-China trade war and a weak economy continued to take their toll. Germany didn�t do it any favors: the bloc�s largest manufacturing producer suffered a worse-than-expected drop in activity, given its struggling auto industry and significant exposure to global trade tensions.

Why should I care?

For markets: Better not cry.
Bleak data or no bleak data, European stocks hit an all-time high on Monday. Perhaps overshadowing the manufacturing survey � backward-looking by definition � was the trade-war truce struck over the weekend, which might�ve raised hopes for Europe�s factories. And with the UK election bringing some much-needed clarity to proceedings (Brexit really might mean Brexit this time), the region�s markets had even more reason to celebrate on Monday.

Zooming out: Better not pout.
China was in the Christmas spirit over the weekend: not only could it boast a successful trade agreement, data released on Monday showed both industrial production and retail sales in November climbed more than expected. If next year sees a complete trade deal that lifts tariffs on even more Chinese goods, it�d go some way to dispelling the gloom that�s long been hanging over the world�s second-largest economy.