Good morning and welcome to our continued coverage of the world economy, financial markets, the eurozone and business.
Sentiment among German exporters has been hit hard, according to a survey. In October, the Ifo institute’s export expectations index fell to 13.0 points from 20.5 points in September, the lowest value since February. The institute said that supply problems for materials used to make German products (such as chips) are affecting exports.
Expectations have slipped in the electrical and electronics sector, although they remain high, but the mood is bleaker in the chemical, automotive, textile and leather industries.
South Korean automaker Hyundai It fell short of analysts’ forecasts as the global chip crisis took its toll on auto exports. He warned that it would take a long time for chip supplies to return to normal levels.
The French manufacturer of auto parts Faurecia It has also been affected by the semiconductor shortage, which has led its customers to reduce production and has registered a drop of more than 10% in third-quarter sales.
In China, another property developer has defaulted, adding to concerns about the sector sparked by the debt crisis at Evergrande Group. Modern earth said it defaulted on the debt due to “unexpected liquidity problems” after Fantasia Holdings Group defaulted on a dollar bond in early October.
Evergrande, China’s second largest real estate developer which has a mountainous debt of around $ 305 billion, managed to avoid a costly default last week, as it accumulated money to pay the interest on a bond at the last minute.
One investor told Reuters that developers are defaulting “one by one.”
The question is always, who’s next?
Oil prices remain high after Brent crude hit a three-year high of $ 86.50 a barrel yesterday. Prices have more than doubled from $ 40 a barrel a year ago due to a surge in energy demand after the pandemic, while supply remains tight. Brent fell to $ 85.95 a barrel this morning, while US crude is at $ 83.63 a barrel, down 0.16%.
Rising crude has pushed UK gasoline prices to their highest level on record, a blow to the hardest hit homes and small businesses. The average daily price of a liter reached 142.94 pence on Sunday and could rise further in the coming weeks.
EU energy ministers are holding an emergency meeting in Luxembourg today to discuss their response to rising energy prices.
On Wall Street, the Dow Jones and the S&P 500 set new all-time highs yesterday, when Tesla topped the $ 1 trillion valuation for the first time after the US electric car pioneer received an order for 100,000 of its vehicles from rental company Hertz.
Asian markets were mixed with Hong Hong’s Hang Seng Index which lost 0.76% and China’s CSI 300 fell 0.36% while Japan’s Nikkei advanced almost 1.8%. European equity markets are poised to open higher today.
- 11am BST: CBI Retail Sales Survey for October (forecast: 13)
- 2pm BST: August US House Price Index
- 3pm BST: US Conference Board Consumer Confidence for October
- 3pm BST: September US New Home Sales
George is Digismak’s reported cum editor with 13 years of experience in Journalism