29 Sept 2025
Global economic conditions are showing signs of improvement, particularly in the manufacturing sectors of Germany and the Eurozone, despite ongoing trade tariffs and uncertainties. Simultaneously, Switzerland's gold exports to the US have surged, underscoring its pivotal role in the country's trade balance amidst new tariff challenges.
German manufacturing and services PMI data showed unexpected growth, exceeding expectations despite US trade tariffs, indicating an improving economic situation. The manufacturing PMI specifically reached 49.9, the highest in three years and nearing expansion territory, marking a significant recovery from January 2022 levels.
The Eurozone private sector experienced its fastest growth in 15 months, with manufacturing re-entering a growth path after three years, reflected in a composite PMI of 51.1 and manufacturing PMI of 50.5, both surpassing forecasts. While the services PMI was slightly lower than anticipated at 50.7, overall data suggests improving conditions across the region despite persistent obstacles.
European economies, including Germany and the Eurozone, demonstrate increased resilience against trade barriers, with interest rates on a downward trajectory and the euro stabilizing against the dollar. This resilience supports the view that the ECB may not need further significant rate cuts, though factors like German preemptive purchases and decreased French foreign demand introduce complexities in the broader Eurozone assessment.
The accelerated growth in manufacturing, especially within Germany's private sector following trade agreements, suggests a potential delay in the ECB's final interest rate cut. Expectations indicate this final reduction might be spread over two sessions, possibly extending beyond September, rather than an immediate implementation.
The UK's manufacturing PMI registered 47.3, falling below predictions, while the services PMI rose to 53.6 and the composite index also increased, both exceeding expectations. This indicates the UK private sector achieved its fastest growth in 12 months, with businesses showing increased optimism compared to the previous year and gradually overcoming the impact of the Labour Party's tax increases.
UK businesses face ongoing pressure from US tariffs and global tensions, leading to reduced activity and increased labor costs, particularly in the services sector. Employers have raised prices to offset rising human resource expenses—a combination of Labour Party policies and broader inflationary pressures—and remain cautious about hiring and investment, continuing a trend of workforce reduction for the eleventh consecutive time.
Switzerland's gold exports to the US surged to approximately 5.9 tons in July, reaching their highest level, following the resolution of news surrounding potential 39% tariffs on gold exports. Switzerland, a major gold refining center, saw this increase from less than 0.3 tons the previous month, though it remains below the peak of 190 tons in January.
The significance of gold in Switzerland's trade balance has intensified due to current tariff policies, especially given the Trump administration's focus on reducing trade deficits. Despite previous assumptions of immunity from heavy duties, the imposed tariffs and stalled negotiations mean gold exports are currently the primary means to improve Switzerland's trade balance with the US.
Stock market indices continued their downward trend, with half of the sectors closing negative and half positive, reflecting cautious consumer decisions. The technology sector, including companies like NVIDIA, Google, and Microsoft, experienced declines of around 1%, largely influenced by discussions about potential 100% tariffs on chips and semiconductors.
While the technology sector faced declines, other sectors such as energy, basic materials, healthcare, finance, and real estate showed slight positive performance. This indicates a mixed market environment with cautious investment in tech due to external policy discussions, contrasting with stability or growth in more traditional sectors.
Important economic announcements scheduled for the near future include the S&P Global Manufacturing and Services PMI data for the United States, alongside the release of existing home sales figures for the US market.
The resilience shown by European economies, especially in manufacturing, suggests a stronger ability to withstand trade barriers, potentially influencing future central bank policies and global trade dynamics.
| Metric | Region | Value | Change | Implication |
|---|---|---|---|---|
| Manufacturing PMI | Germany | 49.9 | Reached 49.9 after 3 years below 50; First time nearing expansion since Jan 2022. | Significant improvement in manufacturing, better than expected despite tariffs, positive outlook for Europe. |
| Composite PMI | Eurozone | 51.1 | Higher than previous and forecast. | Fastest private sector growth in 15 months, manufacturing returning to development after 3 years. |
| Services PMI | Eurozone | 50.7 | Slightly lower than expectations and previous. | Overall conditions improving despite this, businesses managing well, supports no further ECB rate cuts. |
| Manufacturing PMI | UK | 47.3 | Lower than expectations and previous. | Manufacturing showed less stability, impacted by tariffs and global tensions. |
| Services PMI | UK | 53.6 | Higher than expectations and previous. | Private sector fastest growth in 12 months, services leading growth, businesses overcoming tax impact. |
| Swiss Gold Exports | Switzerland to US | ~5.9 tons (July) | Up from <0.3 tons (previous month); Highest level in past month. | Surge after tariff clarification, critical for Swiss trade balance amidst new tariff challenges. |
| UK Workforce Reduction | UK | 11th consecutive reduction | Continued reduction trend. | Employers cautious on hiring/investment due to increased labor costs and Labour Party budget. |
| Tech Stock Performance (NVIDIA, Google, Microsoft) | Global | ~1% decline | Continued downward trend. | Highly sensitive to Trump's 100% tariff talks on chips/semiconductors, consumer caution. |
