China’s manufacturing companies have grown for the fourth consecutive month according to government figures released over the weekend. Factories are maintaining momentum as they recover from the pandemic with industrial profits up 19.1% year-on-year, as the world’s second-largest economy continues one of the strongest recoveries from the Covid-19 pandemic. Industrial profits are 4.4% lower than in January-August 2019 but the loss is minimal compared to most developed economies. Raw material producers, equipment makers and electrical manufacturers all posted particularly solid jumps in profits. Economic indicators in August, ranging from exports to producer prices and factory output, all pointed to a further pickup in the industrial sector.
European stocks recovered a good chunk of last week’s hefty losses helped by upbeat industrial profits data from China. In less than an hour, EUSTX 50 gained 1.7%, followed by the German DAX which had the same climb also helped by Commerzbank which shares jumped after it appointed a new CEO. FTSE 100 was up 1.3% despite while the Spanish Ibex gained 1.4% despite a growing number of Covid-19 infections and new lockdown measures being considered in both the UK and Spain.
The final scheduled round of Brexit talks gets underway today and both sides are warning that progress must be made in order to meet the October 15. deadline for a trade deal. The European Union wants the UK to accept some of the bloc's key demands and the UK indicated it was hopeful that some progress can be made in areas of contention. The Bank of England and the European Union’s securities watchdog have agreed on the information-sharing arrangements needed for the bloc’s banks to continue using clearing houses in London from January. Brussels had already decided it would grant temporary access for UK clearing houses until June 2022. UK Prime Minister Boris Johnson faces the crunch talks as he also finds himself grappling with a surging unemployment rate, criticism over his government's response to the pandemic and a rebellion in his own party over emergency Covid-19 powers.
France’s Les Republicains were on course to maintain the majority in the Senate after Sunday’s vote, while President Emmanuel Macron’s centrist party avoided mishap 18 months away from a general election. Partial results also showed Europe Ecology - The Greens making gains. The French Senate has less influence over legislating than the lower house, The National Assembly, which is controlled by Macron’s en Marche and a junior partner.