Anger at the government has seeped into measures of business confidence. Yet such surveys don’t tell the full story about what is happening in the economy https://t.co/14lXAOBvBy ...

German business confidence improved to its highest level since 2022 at the start of the fourth quarter https://t.co/f6JV7kpccA ...

French business confidence unexpectedly inched higher in October, driven by improvements in the manufacturing and retail sectors https://t.co/eHrq6f5FUZ ...

Core Insights - The UK government is facing pressure to find £30 billion in tax rises and spending cuts in the upcoming Budget, with warnings that further tax increases on businesses could severely impact the jobs market and economic growth [2][3]. Group 1: Business Sentiment - 56% of employers indicated they would either cut jobs or freeze hiring if corporate taxes are raised again, highlighting a significant concern for the job market [2]. - Nearly half of the surveyed businesses have already reduced jobs or halted hiring due to previous tax increases, with the unemployment rate reaching a four-year high of 4.8% [3]. - Business confidence is described as fragile, with many firms citing high operating costs and uncertainty as major barriers to growth [5]. Group 2: Economic Impact - The ICAEW warns that further tax hikes could jeopardize the UK's growth mission, with corporate tax increases potentially leading to a "damaging cliff edge" for the economy [2]. - Almost half of the firms surveyed are considering raising prices in response to higher taxes, and two in five plan to cut investment [4]. - Inflation is currently at 3.8%, nearly double the Bank of England's target, which is exacerbated by a deteriorating labor market [5][6].

Core Insights - The dollar index (DXY) has risen by +0.63%, reaching a 1.5-week high, driven by signals from Fed Chair Powell indicating a less dovish stance than market expectations [1] - US new home sales in August surged by +20.5% month-over-month to 800,000, marking a 3.5-year high, contrary to expectations of a decline [2] - The euro is under pressure due to a decline in German business confidence, with the IFO business climate survey falling to a 4-month low [3][4] Group 1: Dollar Strength and Economic Indicators - The dollar's strength is supported by a 93% market expectation of a -25 basis point rate cut by the Fed at the upcoming FOMC meeting [3] - The unexpected jump in US new home sales to 800,000 contrasts sharply with the anticipated decline to 650,000, indicating robust housing market activity [2] - The euro's weakness is compounded by the German IFO business climate survey dropping -1.2 points to 87.7, below the expected increase to 89.4 [4] Group 2: Central Bank Divergence - The European Central Bank (ECB) is perceived to be nearing the end of its rate-cutting cycle, while the Fed is expected to implement two more rate cuts by year-end [4] - ECB Executive Board member Cipollone noted that inflation risks in the Eurozone are balanced, with a minimal chance of a rate cut at the upcoming ECB meeting [5] Group 3: Japanese Economic Activity - The USD/JPY exchange rate increased by +0.77%, with the yen falling to a 2.5-week low due to weak manufacturing activity in Japan, as indicated by a contraction in the S&P manufacturing PMI [6] - Japan's August machine tool orders were revised upward to +8.5% year-over-year, the largest increase in five months, suggesting some positive momentum in the manufacturing sector [7]

German business confidence unexpectedly dropped, highlighting the fragility of Chancellor Friedrich Merz’s plan to restore growth in Europe’s biggest economy https://t.co/3xHF8w9HUH ...

Business Confidence - Business confidence in Peru remains strong [1] Political Landscape - Political uncertainty stems from a potential field of more than two dozen presidential candidates next year in Peru [1]

Business Confidence & Economic Trends - Business confidence is rising [1] - Tax hikes are occurring [1] Consumer Behavior - Gen Z's shopping habits are skewing data [1] Sports & Media - Germany's Bundesliga is tapping content creators [1]

Business Sentiment & Expectations - Companies report a flat and weak business situation [1] - Expectations are improving, anticipating increased government spending in the future [2] - Order intake and other indicators are not yet showing improvement [2] - Companies are increasing capacity in anticipation of government spending [4] Economic Challenges - German company insolvencies have reached the highest level since 2005 [3] - The housing and apartment sector remains weak [4] - GDP figures disappointed with a -0.0% [10] Trade Deal Assessment - The current trade deal is considered a humiliation for the EU, reflecting an imbalance of power [5] - The trade deal is worse than previous arrangements, posing a challenge to the German economy, estimated around 15% [6] - Companies do not fully trust the trade deal due to uncertainty and potential changes [7] Fiscal Stimulus & Reforms - A fiscal stimulus package targeting defense and infrastructure has been unveiled [8] - The stimulus is expected to have a positive impact next year [8] - The sustainability of the stimulus depends on complementary structural reforms [9][11] - Without structural reforms, the effects of government spending will be short-term and may lead to price increases [10][11]

Business Confidence - South African business confidence reached a four-month high [1] Risk Factors - Trump's tariffs pose a threat to reverse the gains in business confidence [1]