► We see ongoing thin trading but sign of a shift in sentiment as investors become increasingly concerned whether they were not too optimistic about upcoming rate cuts (they were/are – according to our Chief Analyst Robert Lindner). European markets opened slightly lower and show little action – Stoxx 600 is currently 0.2% lower. European financial shares saw an uplift, with UBS Group rising over 4% despite absorbing Credit Suisse losses, buoyed by robust client inflows.
► Germany's industrial output in September fell by 1.4%, signaling that the economic downturn continues, particularly in key sectors such as automotive, electrical, and pharmaceuticals. This decline coincides with a broader contraction in Europe's construction industry, as reflected by a dip in the Eurozone Construction PMI to 42.70 points in October. While Italy showed some resilience with a modest improvement, Germany's construction sector experienced a significant slump, marking the lowest HCOB Construction PMI reading since April 2020, underscored by a decrease in residential projects, job losses, and dropping prices. France's construction sector also reported a sharp decline, with the steepest contraction in activity for the year, accompanied by a reduction in new orders due to weakening demand.
► Weak consumption in the Eurozone is also reflected in the sharp fall in producer prices, which are now at -12.5% YoY – a clear sign that consumer inflation will also fall significantly slowdown in coming months.
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