A study conducted by the Ifo Institute, published on Monday, showed that the German industrial sector has lost about half a million jobs since 2019, as manufacturers face increasing competitive pressures.
According to the study, the number of workers in the German industrial sector was 496,000 fewer people at the end of 2025, compared to the beginning of 2019, a decrease of 7.1 percent.
In contrast, more than 2.2 million jobs were created in the service sector, especially in the fields of health and social services, as well as in public administration.
“Germany is witnessing an accelerating structural transformation,” said Joachim Ragnitz, Director General of the Ifo Institute. The irony is that the same sectors that have so far maintained our prosperity are witnessing a contraction.”
He added that the new jobs are not being created, for the most part, in sectors where Germany has particularly high productivity and innovation, warning that this could slow the potential for future economic growth.
The study indicated that employment is declining in almost all industrial sectors, likely as a result of decreased competitiveness, especially vis-à-vis China.
In detail, the automobile industry and the companies that supply it reduced the number of jobs by 123,500 jobs, a decrease of 13 percent, while metal product manufacturers shed 115,600 jobs, and the mechanical engineering sector lost 64,500 jobs.
According to Ragnitz's calculations, these three sectors represent about 60 percent of the total jobs that have been cut.
French bond yields rose on Monday, and the difference between them and German bond yields widened, after the widespread turmoil that France witnessed over the weekend highlighted the difficulties the government faces in reducing the large fiscal deficit in the second largest economy in the euro zone.
France, which is suffering from weak growth and worsening public debt, witnessed some of the worst unrest in years over the weekend. Thousands of people were arrested, while stores were looted or damaged, following protests against high prices and the decline in the level of public services, according to Reuters.
The French ten-year bond yield rose by 6 basis points to 4.84 percent, while the corresponding German bond yield, which is a benchmark for the euro zone, settled at 3.41 percent.
London Stock Exchange Group data showed that the two-year French bond yield briefly rose by 10 basis points, before settling at a rise of two basis points at 3.57 percent.
Concerns about the volume of French borrowing had pushed the ten-year bond yield to 4.99 percent in early October, before market movements calmed down last week.
Political maneuvering, with the presidential elections scheduled for next year approaching, may further complicate the situation, with potential repercussions on the markets.
Jim Reed, global head of macroeconomic research at Deutsche Bank, said in a morning note that the turmoil “will not make international investors completely comfortable buying French Treasuries, so the limited gains made by French bonds over the past week or so will be tested today.”
He added, “France is indeed facing a difficult financial situation.” “With the 2027 elections approaching, the weekend’s events add a new layer of political risk to markets.”
Traders' interest is focused on whether the rise in French bond yields will spread to other countries in the euro zone that suffer from high debt levels, and Italy stands out as the first country worth monitoring. On Monday, the Italian ten-year bond yield rose by 4 basis points to 4.52 percent.
Developments in France also cast a shadow on the euro, which fell by between 0.1 and 0.2 percent against the dollar, the British pound, and the Japanese yen.
On the stock market, French stocks were likely to perform weaker than their counterparts in the region, as futures contracts for the French CAC 40 index of leading stocks fell by 0.8 percent, compared to a decline of 0.5 percent for futures contracts for leading stocks in the euro zone.
The Reserve Bank of India's first liquidity injection in more than three months witnessed strong demand from banks on Monday, as overnight borrowing rates remained close to the upper end of the central bank's interest rate range.
The operation comes months after the central bank withdrew surplus liquidity from the banking system, after it reached record levels as a result of large inflows of deposits from Indians residing abroad, which were mobilized to support the rupee, which is facing pressure on its exchange rate, according to Reuters.
The persistence of large liquidity surpluses for long periods may exacerbate inflation and raise asset prices. But short-term borrowing costs among banks have risen sharply in recent weeks, after the central bank raised interest rates earlier this month for the first time in about and signaled the possibility of continued monetary tightening in the face of rising inflation.
During Monday's operation, the central bank pumped one trillion rupees ($10.53 billion) through a reverse repurchase agreement with a variable interest rate for a period of seven days, while bank offers exceeded 1.5 trillion rupees, ahead of the exit of large amounts of liquidity as a result of tax payments.
Sakshi Gupta, an economist at HDFC Bank, said that pumping liquidity is a “situational response to fluctuations in liquidity conditions,” adding that the return of excess liquidity to more moderate levels means that the central bank will resume its operations to carefully control liquidity, and the need for additional measures to absorb it in a sustainable manner, such as selling bonds on the open market or implementing foreign currency buying and selling swaps, may decrease.
On Friday, the weighted average interest rate on interbank lending for one night recorded the first close above the marginal deposit facility rate since the beginning of the current fiscal year, while it remained close to that level on Monday.
The central bank's repurchase rate is 5.50 percent, compared to 5.75 percent for the marginal deposit facility rate.
The surplus liquidity in the Indian banking system fell to less than two trillion rupees, equivalent to 0.7 percent of deposits, on October 16, for the first time in two and a half months.
A trader at a private bank said that Tuesday's holiday means a large portion of liquidity will be released to pay the goods and services tax on Monday, which may have required quick intervention from the central bank.
