German manufacturers report a rise in material shortages in September

what happened

According to Newsmetry API, citing Germany’s Ifo Institute, the share of manufacturing companies reporting shortages of intermediate products rose to 14.6% in September from 13.3% in August. Among producers of data-processing equipment and electronic and optical goods, the figure climbed from 33.2% to 37.8%. Ifo survey chief Klaus Wohlrabe said there was still no evidence of a broad-based deterioration in supply.

The European Union agreed to cap imports of Chinese hybrid and plug-in hybrid cars at 350,000 vehicles a year for four years. Oxford Economics said the measure could provide short-term relief for European carmakers but would not eliminate the risk of further escalation. Capital Economics said the deal could become a template for restrictions in industries such as chemicals and machine tools.

Markets were also focused on volatile sovereign debt trading, which may restrain corporate bond issuance, and the U.K. budget scheduled for October 28. Ten-year U.K. government bond yields had reached a 19-year high of 5.527% before easing to 5.443%. U.S. pending home sales fell 4% month-over-month in September, reaching their lowest level since spring 2014 apart from April 2020.

why it matters

Regional risk increased after Houthi attacks on Riyadh’s international airport: Saudi Arabia’s Tadawul All Share Index fell 0.7%, while Qatar and Dubai equities advanced. Brent traded near $106.90 a barrel and the dollar reached 158.66 yen. Elevated interest rates and U.S. Treasury yields continue to weigh on housing demand and keep bitcoin near $83,000.

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