Germany’s finance ministry has presented plans for a European unemployment stabilisation fund designed to arm the eurozone against crises, in a response to French president Emmanuel Macron’s call for deep reform of the currency union, the Financial Times reported. The fund proposed by Olaf Scholz, the social democrat finance minister, would lend to recession-hit countries with high unemployment and strained social security systems. Recipients would repay the money once they had resolved their economic problems.
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Finance professionals’ view of the German economy has darkened much more than expected amid domestic political instability and as tensions over the trade dispute with the US and concern over Brexit intensify, the Financial Times reported. The Indicator of Economic Sentiment for Germany dropped 14 points in October from September to minus 24.7, according to the Centre for European Economic Research (ZEW). Economists had expected the index to drop to minus 12. The index has reached the same low-point registered in July of this year, which was the lowest reading since August 2012.
Bond markets are signaling that German retailer Douglas Gmbh, which grew over two centuries from a small perfumery and soap maker in Hamburg into one of the largest beauty chains in Europe, may have expanded too far, Bloomberg News reported. Investors are concerned the private company will struggle to repay 2.1 billion euros ($2.4 billion) of debt used to fund its buyout and purchase of brick-and-mortar chains as the rise of online competition pressures retailers from Toys “R” Us Inc. to Sears Holdings Corp. to close shops or restructure debt.
A sharp fall in imports pushed Germany’s trade surplus sharply higher in August, according to new data released on Tuesday that underscore the summer slowdown in parts of the global manufacturing sector, the Financial Times reported. The trade balance reached €18.3bn in August on seasonal and calendar adjusted terms, according to the Federal Statistics Office. The jolt higher represented a bounceback from a steep fall during the previous month. Imports dropped 2.7 per cent in August from July to €92bn, while exports slipped 0.1 per cent to €110.3bn.
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German carmaker Opel, owned by France’s PSA Group, said on Tuesday it would stop selling the Cascada convertible, the Adam city car and the KARL at the end of 2019, as part of a product overhaul to focus on sport-utility vehicles. The maker Opel and British Vauxhall branded cars blamed new emissions rules for the cull, but the carmaker has struggled to reach sustainable profitability after racking up more than a decade of losses selling low-margin cars under previous owner General Motors, Reuters reported.
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A rebound in German industrial orders has yet to feed through to production, with output from the country’s factory sector once again lagging behind expectations, the Financial Times reported. Industrial production dropped 0.3 per cent in August from the previous month according to statistics agency Destatis, after a 1.3 per cent month-on-month decline in July. Economists polled by Reuters had expected a 0.4 per cent increase for August. July’s production was also worse than previously thought. Data had originally pointed to a decline of 1.1 per cent for the month.
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A trio of funds backed by $3 trillion in global assets reckon the recent sell-off in Italian bonds is overdone. UBS Wealth Management is buying into the weakness in the nation’s debt, along with Allianz Global Investors and Nomura Asset Management, Bloomberg News reported. The surge in Italian bond yields is a reflection of a market in fear, which will be forgotten noise in a few months for Allianz. “The move is completely crazy,” said Kacper Brzezniak, a portfolio manager at Allianz, whose firm overseas 524 billion euros ($605 billion) in assets globally.
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German retail sales unexpectedly slipped in August, marking the second disappointing reading in a row for the country’s retail trade and fuelling concerns over growth in Europe’s biggest economy, the Financial Times reported. Retail sales fell by 0.1. per cent in August compared to the previous month, according to data published by Germany’s Federal Statistics Office. Economists polled by Thomson Reuters had expected a 0.4 per cent rise. However, on an year on year basis, turnover in Germany’s retail trade increased by 1.6 per cent, above analyst expectations of 1.5 per cent.
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Germany’s powerhouse manufacturing sector extended its slowdown into September, early data showed on Friday, but its service sector bucked the trend with growth remaining robust, the Financial Times reported. The flash manufacturing purchasing manager’s index for the eurozone’s largest economy fell to a 25-month low to 53.7 according to IHS Markit, which compiles the data. That was a dramatic fall in the pace of growth reported by executives from the previous month, when the index stood at 55.9. Analysts polled by Thomson Reuters had only expected a very slight drop to 55.7.
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Insolvent German charter carrier Small Planet Airlines hopes to attract a buyer following a debt restructuring, its administrator told Reuters on Wednesday, saying he saw good a chance of a deal, Reuters reported. Small Planet, which employs 400 staff and has nine aircraft, mainly flies tourists to Mediterranean destinations. The company filed for insolvency this week in a bid to stay in the air while a buyer is found. “Talks are going on with investors, and they are now being intensified under new conditions,” court-appointed administrator Joachim Voigt-Salus told Reuters.
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