On the domestic front, October inflation expectations rose to a four-month high, highlighting persistent price pressures stemming from elevated global energy costs, even as the Reserve Bank continues to tighten policy. Losses were broad-based, led by technology, non-energy minerals, industrial services, and logistics stocks.

The four major banks each declined about 1.5%, while BHP Group dropped 2.0% and Rio Tinto fell 2.9%. Fortescue slipped 1.4% amid a standoff with China Mineral Resources Group over long-term iron ore contracts. Other notable underperformers included Lottery Corp. (-3.8%), Xero (-3.0%), and Endeavour Group (-1.7%).

Imports from EU member states slipped 0.4% to EUR 59.3 billion, weighed down by lower inflows from both euro area partners (down 0.3%) and EU countries outside the eurozone (down 0.7%). On a year-on-year basis, total imports increased 6%, accelerating from an upwardly revised 3.2% gain in the previous month. Over the first eight months of the year, Germany’s imports amounted to EUR 946.7 billion, 4.4% higher than in the same period a year earlier.

At the same time, price growth slowed in several categories: furnishings, household equipment and routine maintenance (1.7% vs 2.8%), recreation, sport and culture (5.1% vs 6.2%), education (3.8% vs 5.2%), and information and communication (1.8% vs 2.1%). Deflation in food and non-alcoholic beverages moderated slightly (-1.6% vs -2.0%), while prices for clothing and footwear declined by 0.7% after having risen 0.8% in August. On a monthly basis, consumer prices rose 1.0% in September, rebounding from a 0.1% decrease in the previous month.

In Europe, investors will be watching German trade data, new car registration figures, and the publication of the ECB’s Monetary Policy Meeting Accounts. On the corporate front, UK retailer Tesco is due to release its earnings. In premarket trading, futures on the Euro Stoxx 50 and the Stoxx 600 were down 0.2% and 0.3%, respectively.

The decline was largely driven by weaker shipments to EU member states, which fell 0.6% to €77.5 billion. Within the EU, exports to non-euro area countries dropped sharply by 3.5% to €23.2 billion, while exports to the euro area rose by 0.8% to €54.3 billion.

Exports to non-EU countries (“third countries”) also decreased, slipping 1.1% to €60.0 billion. This was mainly due to a 6.3% fall in exports to the US, which outweighed export gains to China (up 4.7%) and the UK (up 16.7%).

Despite the recent monthly weakness, Germany’s exports were 6.2% higher in August than a year earlier. Over the period from January to August, total exports rose 4.4% compared with the same period a year before, reaching €1,092.7 billion.

Exports fell 0.8% month-on-month to €137.6 billion. Shipments to EU member states decreased by 0.6%, while exports to non-EU (third) countries were down 1.1%. Within this group, exports to the US dropped 6.3%, whereas shipments to China rose 4.7% and exports to the UK jumped 16.7%.

Imports, by contrast, increased 0.9% to €118.1 billion. Purchases from EU countries slipped 0.4%, but imports from third countries climbed 2.2%. Imports from China surged 11%, while those from the US edged down 0.5% and imports from the UK fell 3.8%.

On a yearly basis, exports grew 6.2% and imports rose 5.5%. Over the period from January to August, Germany’s cumulative trade surplus widened to €146.0 billion, up from €140.4 billion in the same period a year earlier.

The figures are based on a year-over-year comparison, meaning September’s 6.7% reading measures price changes relative to September a year earlier, while August’s 6.1% reflected the change compared with August of the previous year. The increase suggests that inflationary pressures in Lithuania remain elevated and have strengthened again at the end of the third quarter.

The latest CPI data will be closely watched by businesses, consumers and policymakers, as the uptick in annual inflation may influence expectations for costs, wages and potential policy responses in the months ahead.

The month-over-month comparison highlights a clear shift in momentum: while July’s figure reflected a steep drop in inbound goods, August’s modest gain suggests import volumes have begun to recover. Analysts and market participants will be watching subsequent releases closely to assess whether this rebound develops into a sustained improvement in Germany’s trade dynamics.

On a month-over-month basis, August’s reading represents a continuation rather than a deviation from the prior month, as July also recorded a 0.8% decline from June. The unchanged rate suggests that the pressures weighing on German exporters—whether from external demand, trade frictions, or broader economic headwinds—remain firmly in place.

The back-to-back 0.8% monthly declines raise concerns that Germany’s export engine, traditionally a key growth driver, may be losing momentum. Without a clear sign of stabilization or rebound in the data, attention is likely to focus on upcoming releases for evidence of whether this soft patch in exports will deepen or start to ease in the coming months.

The shift from a modest monthly deflation in August to a solid 1.0% monthly increase in September highlights renewed price pressures in the Lithuanian economy on a short-term basis. The figures are based on a month-over-month comparison, meaning the September reading reflects the change in prices versus August, while the earlier -0.1% figure captured the change in August relative to July.

This reversal will be closely watched by policymakers and market participants, as it may signal changing inflation momentum after a brief period of easing prices, and could influence expectations for inflation trends in the coming months.

The month-on-month shift indicates that net exports weakened further over the period, as the negative trade balance increased by €0.41 billion between July and August. While detailed drivers such as export and import breakdowns are not yet provided, the data highlight a continued pressure point for Finland’s external sector during late summer 2026.

The widening deficit will likely draw attention from policymakers and market participants tracking Finland’s external position and its implications for growth and currency dynamics, especially if the negative trend persists in the coming months.

The decline in the surplus suggests that either export growth has slowed or import demand has strengthened, compressing the gap between what Germany sells abroad and what it buys. While the trade balance remains firmly in positive territory, the August easing may signal a period of more moderate contributions from net trade to overall economic activity in the coming months.

Market participants and policymakers will be watching subsequent releases closely to determine whether August marks the beginning of a broader trend or a temporary adjustment following July’s stronger showing. For an export-driven economy like Germany, even modest shifts in the trade balance can carry implications for growth expectations and business sentiment.

Geopolitical tensions in the Middle East also weighed on risk appetite, with potential disruptions to energy supplies fuelling concerns about higher global oil prices and Indonesia’s import bill. At the same time, investors remained focused on domestic economic conditions.

New data showed a slight decline in consumer confidence from September’s three‑month high, reflecting worries over elevated food prices and higher non‑subsidised fuel costs. Headline inflation rose to a three‑month peak in September, while August imports expanded much faster than exports, even though the overall trade surplus remained stronger than anticipated.

Foreign exchange reserves were broadly stable in September, hovering near a five‑month high. However, ongoing intervention by Bank Indonesia to support the rupiah could exert pressure on reserves, particularly in the context of uncertain portfolio inflows.

At the same time, expectations for business activity decreased by 0.6 points to 121.5. In contrast, sentiment toward purchases of durable goods improved slightly, rising 0.6 points to 106.7.

Forward-looking views on income were more optimistic: expectations for income over the next six months climbed 2.0 points to 136.9. Similarly, expectations regarding job availability over the same period increased by 2.0 points to 127.7.

Growth in the manufacturing sector also lost momentum, slowing to 0.3% from 5.4% in the previous month. Weaker activity in printing and reproduction of recorded media (-13.2% vs -8.6%), the chemical industry (-9.0% vs 0.8%), and furniture manufacturing (-17.5% vs -16.6%) more than offset stronger output in the food industry (3.6% vs -1.2%) and the textile, clothing and leather industry (2.3% vs -2.5%).

By contrast, production in electricity, gas, steam and air conditioning supply accelerated, rising 7.5% year-on-year after a 3.1% gain in July. On a seasonally adjusted monthly basis, overall industrial output fell 1.3% in August, deepening from a 1.1% decline in the prior month.

In contrast, corporate confidence eased, dragged down by weaker sentiment in the manufacturing sector, although labor market conditions continued to improve.

The economic outlook index, which measures business expectations for the coming months, declined to 47.4 from August’s six-month high of 48.3, its first drop in five months. The deterioration reflected mounting concerns about the impact of natural disasters and heightened uncertainty over conditions in the Middle East, even as the broader economy continued to show signs of recovery.

Upside was further constrained by a weak lead from Wall Street, where equities fell overnight as US Treasury yields moved higher. Investor caution intensified after minutes from the latest FOMC meeting indicated the Federal Reserve is likely to deliver another rate hike this year. Rising oil prices also weighed on sentiment, stoking renewed concerns about inflation and the prospect of additional interest rate increases.

Domestically, last month the Reserve Bank of New Zealand raised the official cash rate by 25 basis points to 2.75%, marking a second consecutive hike as it works to return inflation to the 2% midpoint of its target range.

Notable gainers on the day included Australian Foundation (+1.5%), A2 Milk (+1.4%), F&C Investment (+1.4%), AFT Pharmaceuticals (+1.3%), Contact Energy (+1.3%), South Port NZ (+1.2%), Henderson Far East Income (+1.0%), and Fisher & Paykel (+0.9%).

Sentiment toward Indian equities was further pressured as Brent crude rose above $100 a barrel, intensifying worries about inflation and the country’s import bill. At the same time, the rupee weakened by 0.4% to 96.775 per dollar, hovering near its record low of 96.96.

Sector-wise, all major groups declined with the exception of information technology, which outperformed the broader market. The IT index advanced about 1.2%, led by Tata Consultancy Services, which gained 2.4% ahead of its September-quarter earnings release later on Thursday—an announcement that will effectively kick off the earnings season for India’s blue-chip companies.

Among the notable decliners were One 97 Communications, down 5.8%, ITC, which fell 2.3%, and Reliance Industries, off 1.3%.

Holiday-thinned liquidity further amplified corporate dollar selling, helping the won maintain levels in the mid-to-high 1,330s. At the same time, the US 10-year Treasury yield hovered around 5.3% after recently hitting its highest point since 2002, while the dollar index remained near its strongest level since April 2025. Additionally, the latest Federal Reserve minutes indicated that most policymakers still favored another interest rate hike by year-end, capping further gains in the won.

Although the indicator remains below the neutral 50 threshold that separates pessimism from optimism, the uptick points to gradually improving perceptions of current economic conditions. The Economy Watchers survey, often viewed as an early gauge of activity in consumer-facing sectors, will be closely monitored in coming months for signs of whether this tentative improvement can gain traction.

The figures are based on a year-over-year comparison, where the current reading reflects the change in August 2026 relative to August 2025, and the previous reading shows the change in July 2026 relative to July 2025. The sharp slowdown suggests a cooling in industrial activity as the summer progressed, signaling a weaker expansion pace for Finland’s manufacturing and broader industrial base heading into the latter part of the year.

Interest rate markets are currently assigning roughly a 58% probability that the Reserve Bank of New Zealand will raise the official cash rate by 25 basis points to 3.0% later this month, with a further increase in December now more than fully priced in. Meanwhile, the RBNZ has begun recruiting for two assistant governor positions and its first‑ever chief of staff, ahead of Assistant Governor Karen Silk’s planned departure in mid‑December.

The pickup from July’s more moderate pace suggests that Dutch consumers increased their outlays across the economy, potentially supporting broader growth momentum. While detailed category breakdowns are not provided, the overall improvement in the spending indicator points to a more confident consumer backdrop compared with the previous month.

With consumer expenditure a key driver of Dutch economic activity, the move from 1.2% to 2.1% year-on-year in August will be closely watched by policymakers and markets as they assess the resilience of domestic demand in the second half of 2026.