MTS Insights

Germany’s GfK Consumer Climate Indicator is forecast to fall -1.9 pts to -23.6 in September 2025 (from -21.7), marking a third straight monthly decline amid weakening income and economic expectations.

• Income expectations dropped -11.1 pts to 4.1, the lowest since March 2025, reflecting rising fears of unemployment and job insecurity.

• Economic expectations fell -10.1 pts to -7.4, their lowest in six months, as concerns over tariffs, inflation, and weak domestic momentum grew.

• Willingness to buy edged down -0.9 pts to -10.1, remaining near rock-bottom levels last seen in February 2025.

• The savings indicator slipped slightly to 15.8 (from 16.4), but remained elevated, signaling continued consumer caution.

• Inflation expectations rose for a second month, reflecting geopolitical risks and concerns over higher energy prices.

UK retail sales volumes declined for the eleventh straight month in August, with the CBI Distributive Trades Survey showing a net balance of -32% (vs -34% in July), though the pace of contraction is expected to ease in September.

• Sales for the time of year were judged “poor” at -19% (vs -10% in July), and are projected to remain weak in September (-20%).

• Retail sentiment stayed negative, though less severe, with business expectations at -10% for the next quarter (vs -29% in May).

• Employment continued to fall at -14% (vs -15% in May), with headcount cuts expected to accelerate to -19% in September.

• Selling prices rose sharply at +65% (vs +35% in May), the fastest pace since Nov 2023, but growth is expected to ease in September (+43%).

• Orders to suppliers fell sharply at -40% (vs -21% in July), with another steep decline expected in September (-32%).

• Online sales were flat at +3% (vs +4% in July) but are set to contract heavily next month (-35%).

• Wholesale sales declined -25% (vs -32% in July) and are expected to fall steadily again in September (-26%).

• Motor trades sales contracted at a slower -30% (vs -70% in July), with the same pace projected for September.

• Stocks relative to expected demand strengthened to +23% (vs +12% in July; avg +17%), though are seen easing next month (+16%).

OECD GDP grew 0.4% QoQ in Q2 2025 (prev 0.2%), while G7 GDP also accelerated to 0.4% QoQ (prev 0.1%), with country-level growth showing mixed patterns.

• US GDP rebounded +0.7% QoQ (prev –0.1%), supported by a sharp –10.3% drop in imports after an 11.0% surge in Q1, though inventory drawdowns offset some gains.

• France and Japan both improved modestly, with GDP rising to 0.3% QoQ (prev 0.1%).

• UK growth slowed to 0.3% QoQ (prev 0.7%), weighed by –1.1% investment contraction (prev +2.0%).

• Germany (–0.3% QoQ, prev +0.3%) and Italy (–0.1% QoQ, prev +0.3%) both contracted, with German exports falling –0.6% after +3.0% in Q1.

• Outside the G7, Ireland saw a sharp slowdown (–1.0% QoQ, prev +7.4%) while Denmark swung to +1.3% QoQ (prev –1.3%).

• OECD GDP growth held steady at 1.7% YoY, with the US at +2.0% YoY (unchanged) and Germany the weakest at +0.2% YoY.

The MBA Mortgage Applications Composite Index edged down -0.5% WoW as mortgage rates remained basically unchanged last week.

• The Purchase Index increased 2.2% WoW, while the Refinance Index offset that increase with a -3.5% WoW decline.
• Total purchase applications were down -0.1% WoW but up 25.1% YoY, and total refinance applications dropped -3.5% WoW but were up 18.6% YoY.
• The 30-year fixed mortgage rate edged up 1 bps to 6.69%, and the 15-year fixed mortgage rate increased 7 bps to 6.03%.

Canadian business sentiment held broadly steady in Q3 2025, with 66.7% of firms optimistic about the next 12 months, though cost pressures, tariffs, and hiring challenges continue to weigh on operations.

• Cost-related obstacles were expected by 62.2% of businesses (vs 65.4% in Q2), with inflation cited by 45.2% and cost of inputs by 25.4%.

• Nearly 40% of businesses expect to pass tariff-driven cost increases to customers over the next 12 months, up from 24.9% that had done so in the past six months.

• Only 13.8% of firms expect sales to rise in the next three months (vs 16.2% in Q2), while 18.9% expect declines and 20.6% anticipate raising prices.

• Just 14.5% of businesses plan to adopt AI in the next 12 months (vs 10.6% in Q3 2024), while 66.7% have no plans, mostly citing irrelevance to their operations.

• Nearly one-fifth (16.0%) of firms saw higher sales of Canadian products in the past six months, led by retail (40.7%), wholesale (33.1%), and accommodation/food services (30.2%).

The new-vehicle sales pace in August 2025 is forecast at 16.0 million (SAAR), down from July’s 16.4 million but well above last year’s 15.1 million, with EV demand driving the gains.

• Sales volume is projected at 1.46 million, up +3.9% MoM and +2.3% YoY, aided by one extra selling day versus July.

• EV sales surged in July (+26.4% MoM; +19.7% YoY to 130,082 units), the second-highest monthly total ever, with August expected to continue strong as buyers move ahead of tax credit expiration.

• Incentives on EVs reached record highs in July, with 11 brands achieving their best EV sales of the year.

• Market conditions remain supported by low unemployment, a strong stock market, and muted tariff-driven price increases.

• Looking ahead, sales momentum is expected to slow in Q4 as EV tax credits expire, inventories tighten, and auto prices gradually rise.

U.S. commercial crude oil inventories fell -2.4 million barrels (vs -2.0 million bbls expected) in the week ending August 22 to 418.3 million barrels, about 6% below the 5-yr seasonal average, reflecting continued supply tightness.

• Total commercial petroleum inventories declined -4.4M bbl, led by draws in motor gasoline (-1.2M bbl) and distillates (-1.8M bbl), while propane/propylene rose +1.7M bbl.

• Refinery inputs averaged 16.9M bpd (-328k bpd WoW), with utilization at 94.6%; gasoline production rose to 10M bpd, while distillate output fell -112k bpd.

• Crude imports decreased to 6.2M bpd (-263k bpd WoW) and were down -0.4% YoY on a 4-week average basis.

• Motor gasoline product supplied averaged 9M bpd over the past four weeks (-1.1% YoY), while distillate demand rose +7.7% YoY and jet fuel demand increased +1.7% YoY.

• Total products supplied averaged 21.2M bpd (+2.5% YoY), signaling steady overall demand despite weaker gasoline consumption.

U.S. M&A deal activity decreased in July, going down 3.6% with 1,038 announcements compared to 1,077 in June. However, aggregate M&A spending increased. In July, 58.5% more was spent on deals compared to June.

• In terms of M&A deal activity, 4 of the 21 sectors tracked by FactSet saw an increase in M&A deal activity over the past three months relative to the same three-month period one year ago: Non-Energy Minerals (83 vs. 61), Electronic Technology (82 vs. 67), Technology Services (742 vs. 732) and Miscellaneous (19 vs. 15).
• On the other hand, 17 of the 21 sectors tracked by FactSet saw a decrease in M&A deal activity over the past three months relative to the same three-month period one year ago. The five sectors that witnessed the largest declines in M&A deal volume were: Finance (594 vs. 699), Distribution Services (107 vs. 161), Health Services (79 vs. 121), Producer Manufacturing (175 vs. 209) and Industrial Services (181 vs. 206).

UK car production rose +5.6% YoY in July 2025 to 69,127 units, the second consecutive monthly increase, though total vehicle output fell -10.8% to 72,006 units due to a sharp -81.1% drop in commercial vehicle output.

• Car production for domestic and export markets grew +13.6% and +3.7% YoY, with exports accounting for 79.4% of output.

• The EU remained the top destination (45.6% share), followed by the US (18.1%), China (7.7%), Turkey (7.2%), and Japan (3.4%).

• Shipments declined to the EU (-7.9% YoY) and China (-7.1% YoY), but exports to the US rose +6.8% (nearly 10k units), reversing three months of declines, supported by the UK–US trade deal effective June 30.

• Turkey (+35.4% YoY) and Japan (+14.9% YoY) saw strong gains, while other top-10 markets (Australia, Canada, Korea, UAE, Switzerland) made up only 6% combined.

• Year-to-date vehicle output is down -11.7% at 489,238 units, though independent forecasts see a +6.4% rebound to 803,000 units in 2026, aided by the DRIVE35 strategy and competitiveness measures.

Total Vehicle Manufacturing

Car Manufacturing

Commercial Vehicle Manufacturing

Australia’s private new capital expenditure rose 0.2% QoQ in Q2 2025, with modest gains across both equipment and building investment.

• Equipment, plant & machinery capex increased 0.3% QoQ, contributing to the overall rise.

• Buildings & structures capex rose 0.2% QoQ, showing steady but limited growth.

• Mining sector capex fell -1.4% QoQ, while non-mining investment rose 0.9% QoQ, highlighting sectoral divergence.

• Estimate 3 for 2025–26 capex was revised up 12.0% to $174.8b, pointing to stronger investment intentions compared with Estimate 2.

Japanese investors were net sellers of foreign long-term debt securities for the second straight week with net selling totaling ¥167.2 billion last week.

• Japanese investors went back to selling foreign equities with net selling totaling ¥306.1 billion.
• Foreign investors of Japanese assets were also net sellers last with equity sales totaling ¥496.8 billion and long-term debt sales of ¥106.0 billion.

EU new car registrations fell -0.7% YTD through July 2025 but rose +7.4% YoY in July, reflecting modest recovery amid structural shifts in fuel mix.

• Battery-electric cars reached 1.01M units YTD (+15.6% share, up from 12.5% in 2024), with strong gains in Germany (+38.4%), Belgium (+17.6%), and the Netherlands (+6.5%), while France declined -4.3%.

• Hybrid-electric registrations climbed to 2.26M units (+34.7% share), supported by growth in France (+30.5%), Spain (+30.2%), Germany (+10.7%), and Italy (+9.4%).

• Plug-in hybrid sales rose to 561,190 units (8.6% share vs 6.9% in 2024), with sharp increases in Spain (+94.5%), Germany (+59.2%), and Italy (+60.3%).

• July YoY gains were broad: battery-electric (+39.1%), hybrid-electric (+14.3%), and plug-in hybrids (+56.9%), marking the latter’s fifth straight month of strong growth.

• Petrol registrations fell -20.1% YTD to 28.3% share, led by France (-33.6%) and Germany (-25.9%), while diesel dropped -26.4% YTD to 9.5% share, with both fuel types also contracting in July YoY.

Japan’s total machinery orders fell -3.6% MoM in July but were up +3.6% YoY, both in line with the preliminary estimates, with domestic demand weakening while foreign demand provided moderate support.

• Domestic demand dropped -11.1% MoM and -0.7% YoY, led by declines in general machinery (-18.4% MoM), while motor vehicles (+15.9% MoM) partly offset the fall.

• Total machinery orders were down -10.4% MoM and -1.2% YoY in July, and in the first 7 months of the year, orders are down -7.8% compared to the same period last year.

• Aircraft orders posted strong gains (+107.8% MoM, +115.5% YoY), offsetting some of the weakness in other machinery categories.

• Foreign demand edged down -0.4% MoM but rose +5.3% YoY, continuing to underpin overall orders.

• Sales decreased -6.7% MoM but grew +2.4% YoY, with sales of NC machine tools tracking a similar pattern (-6.2% MoM; +2.2% YoY).

• Backlog orders rose +1.1% MoM but declined -10.9% YoY, showing a continued erosion of pipeline momentum despite monthly stabilization.

France’s trade sales volume rose +0.5% MoM in June 2025 (after -0.5% in May), with gains in wholesale and motor vehicle-related trades while retail trade remained flat.

• Wholesale trade (ex-motor vehicles) increased +0.8% MoM (prev -0.6%), driven by “other specialised wholesale” (+3.3%) and a sharp rebound in metals and metal ores (+16.3%).

• Wholesale & retail trade and repair of motor vehicles/motorcycles rose +0.4% MoM (prev -1.3%), led by motor vehicle parts (+0.8%), though motorcycle sales/repairs fell -2.8%.

• Retail trade (ex-motor vehicles) was unchanged MoM, as specialised stores (-0.5%) declined, offset by rebounds in non-specialised stores (+0.5%) and non-store retail (+1.1%).

• Within retail, sales fell in “other goods in specialised stores” (-1.1%) but rose for automotive fuel (+1.5%).

• In Q2 2025, total trade volumes rose +0.8% YoY, with retail up +3.4% and wholesale +0.4%, while motor vehicle trade fell -2.9%.

• Early estimates suggest July retail trade (ex-motor vehicles) will remain stable MoM, but sales for May–July were +3.4% YoY.

Italy’s consumer confidence index declined -1.0 pts to 96.2 in August, with all subcomponents weakening.

• Economic climate dropped -1.2 pts to 97.0.

• Personal climate fell -1.0 pts to 95.9.

• Future climate declined -1.7 pts to 92.2.

• Current climate eased -0.5 pts to 99.2.

Italy’s business confidence index (IESI) was unchanged at 93.6, though sector trends diverged.

• Manufacturing confidence slipped -0.4 pts to 87.4, as weaker production expectations and higher inventories outweighed improved order books.

• Construction confidence declined -1.0 pts to 101.3, with order books deteriorating, though employment expectations improved.

• Market services confidence rose +1.2 pts to 95.0, supported by stronger order books, business trends, and expectations.

• Retail trade confidence fell -2.9 pts to 102.8, driven by weaker sales assessments and expectations, alongside rising inventories.

Euro area M3 money supply growth edged up to 3.4% YoY in July 2025 (from 3.3% YoY in June), supported by stronger M1 growth while marketable instruments slowed.

• M1 growth rose to 5.0% YoY (June: 4.7%), contributing 3.2 ppts to M3 growth, while M2–M1 deposits contracted -0.8% YoY and marketable instruments eased to +6.4% YoY (June: +10.4%).

• Household deposits increased +3.4% YoY (prev 3.3%), and deposits by non-financial corporations accelerated to +2.7% YoY (prev 1.6%).

• Deposits by investment funds fell sharply to +6.3% YoY (prev 13.1%), limiting overall momentum.

• Claims on euro area residents grew +2.1% YoY (prev 2.0%), with government claims accelerating to +0.6% YoY while private sector claims held at +2.7% YoY.

• The growth of adjusted loans to the private sector was 2.8% YoY in July, down from 3.0% YoY in June.

• Adjusted loans to households rose to +2.4% YoY (prev 2.2%), and loans to non-financial corporations edged up to +2.8% YoY (prev 2.7%).

The EU Economic Sentiment Indicator (ESI) edged down in August 2025 (EU: -0.3 pts to 94.9; euro area: -0.5 pts to 95.2), while the Employment Expectations Indicator (EEI) improved slightly (EU: +0.6 pts to 98.1; euro area: +0.3 pts to 97.8), with both indicators below their long-term averages.

• Spain saw the sharpest ESI drop (-2.6 pts), followed by Germany (-1.0) and Italy (-1.0), while the Netherlands (+3.5) and Poland (+0.5) posted gains; France was stable (+0.1).

• Industry confidence fell -0.2 pts as weaker production expectations outweighed stable order books; managers’ export order books also worsened.

• Services confidence slipped -0.3 pts on lower past demand assessments, partly offset by improved future demand expectations.

• Consumer confidence declined -0.3 pts, reflecting weaker household financial outlooks, though intentions for major purchases improved.

• Retail trade confidence inched up +0.2 pts, while construction eased -0.3 pts, with fewer citing insufficient demand but more pointing to labor shortages.

• Selling price expectations fell in industry, retail, and construction, but rose again in services; consumer inflation expectations for the next 12 months increased.

• The Economic Uncertainty Indicator eased -0.4 pts to 16.9, with lower uncertainty in services, industry, and retail, but slight increases in construction and among consumers.

India’s industrial production rose +3.5% YoY in July 2025 (from +1.5% YoY in June), supported by manufacturing gains despite sharp mining weakness.

• Mining output fell -7.2% YoY, while manufacturing grew +5.4% YoY and electricity rose +0.6% YoY, showing sectoral divergence.

• The IIP index stood at 155.0 in July 2025 (vs. 149.8 in July 2024), with manufacturing at 156.9, mining at 107.7, and electricity at 221.5.

• Fourteen of 23 manufacturing groups posted positive growth, led by basic metals (+12.7% YoY), electrical equipment (+15.9% YoY), and non-metallic mineral products (+9.5% YoY).

• Within basic metals, strong gains came from MS slabs, HR coils/sheets, and alloy steel flats; electrical equipment growth was driven by heaters, switchgear, and small transformers.

• By use-based classification, Infrastructure/Construction Goods (+11.9% YoY), Intermediate Goods (+5.8% YoY), and Consumer Durables (+7.7% YoY) were top contributors, while Primary Goods declined -1.7% YoY and Consumer Non-Durables were nearly flat (+0.5% YoY).

US initial jobless claims fell -5k to 229k in the week ending August 23, in line with expectations, while the 4-week moving average rose +2.5k to 228.5k.

• On an NSA basis, initial claims declined -2.9k to 191.3k, broadly in line with the prior year level of 192.7k.

• Total continued claims (SA) decreased -7k to 1.954 million (vs 1.97 million expected) in the week ending August 16, while the NSA measure fell -10.5k to 1.945 million.

• The insured unemployment rate held steady at 1.3% (SA and NSA), up slightly from 1.2% a year ago.

• The 4-week moving average of continuing claims increased +4.5k to 1.956m, remaining above the 1.866m level of the prior year.

• Federal employee claims (UCFE) eased -54 to 581, though they were higher than the 284 seen a year earlier.

US real GDP grew at an annualized rate of +3.3% in Q2 2025, revised up from +3.0% in the advance estimate, following a -0.5% contraction in Q1.

• The upward revision reflected stronger investment and consumer spending, partly offset by weaker government spending and higher imports.

• Personal consumption growth was 1.6% at a SAAR in the second estimate, revised up from 1.4%.

• The decline in private investment was revised up from -15.6% in the 1st estimate to -13.8%.

• Federal government consumption growth was the weakest since 2022 Q1 at -8.5% as nondefense spending growth was the weakest since Q2 2021 at -14.3%.

• Real final sales to private domestic purchasers rose +1.9% (revised up +0.7 ppts), showing firmer underlying private demand.

• The gross domestic purchases price index increased +1.8% (revised down -0.1 ppt), while the PCE price index rose +2.0% (also revised down -0.1 ppts) and core PCE held steady at +2.5%.

• Real gross domestic income (GDI) jumped +4.8% after just +0.2% in Q1, bringing the average of GDP and GDI to +4.0%.

• Corporate profits rebounded +$65.5 billion in Q2, reversing part of the -$90.6 billion decline in Q1. The increase in profits was driven by a $59.1 billion increase in the nonfinancial sector.

Drewry’s World Container Index fell -6% WoW to $2,119 per 40ft container, marking an 11th straight weekly decline as post-tariff volatility continues.

• Shanghai–Los Angeles spot rates dropped -3% to $2,332/feu, while Shanghai–New York fell -5% to $3,291/feu, reflecting weaker US retail demand after the early peak season.

• Asia–Europe routes also softened, with Shanghai–Rotterdam down -10% to $2,661/feu and Shanghai–Genoa down -5% to $2,842/feu, as vessel oversupply outweighed solid demand and port delays.

• The rate slide follows a sharp May–June surge triggered by US tariffs, with declines persisting through July and into late August.

• Drewry expects further near-term weakness as the supply-demand balance deteriorates, with added uncertainty from potential new US tariffs and penalties on Chinese ships.

Pending home sales fell -0.4% MoM in July 2025 but were up +0.7% YoY, showing modest year-over-year improvement despite regional divergences.

• The Northeast saw sales decline -0.6% MoM and -0.6% YoY, marking weakness on both measures.

• The Midwest dropped -4.0% MoM but was up +1.3% YoY, reflecting a sharper monthly fall but better annual momentum.

• The South was essentially flat (-0.1% MoM) but gained +1.8% YoY, showing steady improvement.

• The West rose +3.7% MoM but declined -1.9% YoY, highlighting short-term strength amid softer annual comparisons.

• NAR’s survey showed 16% of members expect higher buyer traffic (unchanged YoY), while 21% expect higher seller traffic, up from 17% last year.

Natural gas storage levels increased 18 Bcf to 3,217 Bcf last week, below expectations of a 26 Bcf increase. Inventory levels are down -3.4% YoY (vs -2.9% YoY last week) and are now up 5.0% compared to the 5-year average (vs 5.8% last week).

The Kansas City Fed’s Tenth District Manufacturing Composite Index held steady at +1 in August 2025, unchanged from July and up from -2 in June, signaling broadly flat activity.

• Production improved to 0 (from -3), while the Number of Employees Index rose sharply to 0 (from -11), indicating stabilization in labor conditions.

• Shipments strengthened to +6 (from +3), though the Backlog of Orders remained deeply negative at -15 (from -30), reflecting weak demand momentum.

• The Average Employee Workweek turned positive at +3 (from -9), showing modest gains in hours worked.

• Prices Paid for Raw Materials eased to +37 (from +41), but Prices Received for Finished Products edged higher to +21 (from +18).

• New Orders for Exports stayed weak at -15 (from -13), while Materials Inventories slipped to -7 (from +8), pointing to leaner supply management.