China Beats Expectations
China’s economy grew faster than expected in Q3 2025, with solid industrial production and exports offsetting weakness in consumption and investment. The data suggest external demand remains resilient, but domestic momentum is still fragile, prompting the government to ramp up fiscal support in Q4 to sustain growth into 2026.
Key takeaways:
- GDP: +4.8% YoY (vs. 4.5% forecast), +1.1% QoQ SA
- Drivers: Stronger industrial output and export recovery in September
- Weak spots: Retail sales slowed to +3.0% YoY; fixed asset investment -6.8%
- Policy response: CNY 1tr in new fiscal measures via policy banks and local bonds
Downgrade of France (again…)
Last Friday S&P downgraded French government debt by one notch from AA- to A+ dealing further blow to the country’s credibility
- The reason behind the move lies in the elevated uncertainty of the country’s budget despite the submission of a 2025 draft budget as well as the recent political instability
- The agency expects that the budget deficit will only narrow to 5.3% next year with the rating that could be further lowered if budgetary position deteriorates or economic growth prospects worsen
- S&P’s decision follows that of Fitch and means that France has lost AA rating at two major credit agencies – this could lead to forced selling by funds with ultra strict investment criteria
- Next on the agenda will be Friday’s review by Moody’s which currently rates France as Aa3 with stable outlook
Swiss Franc Nears Decade High
The Swiss franc is closing in on its highest levels in a decade against the euro, as haven demand ripples through global markets
- It’s the only Group-of-10 currency to appreciate against the dollar over the past month following a resurgence in US-China tariff worries, political uncertainty in France and Japan, and renewed strains at US regional banks
- In doing so it has emerged as the standout risk hedge in FX, given Europe, US, China and Japan face concerns ranging from growth to fiscal expansion and debt sustainability
Nestlé to Slash 16,000 Jobs
The new CEO, Philipp Navratil, announced the reductions as part of a plan to turn around the world’s largest food company
- Nestlé said on Thursday that it would shed about 16,000 jobs over the next two years, accelerating a cost-cutting program six weeks after the company fired its chief executive
- Navratil, who took over as CEO last month, announced the changes as part of a wider move to cut 3 billion Swiss francs, or $3.7 billion, in spending by 2027
- It said increased automatization and shared services among divisions would compensate for the lost workers
- Nestlé has been seeking to cut costs in the face of stalling growth and a drop in demand from China
- President Trump’s sweeping tariffs on imports to the United States, including a tariff of 39 percent on Swiss goods, added further challenges. The US is Nestlé’s largest market.
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