EU Weighs Caps on Chinese Hybrids as Global Equities Slide

• Brussels said to plan auto quotas after Chinese brands hit record 12% market share
• Bank of France’s Moulin says threshold for ECB intervention has not been met
• IMF warns of AI, debt, and energy ‘risk cocktail’; Iran targets Gulf shipping
• Stoxx 600 falls 1.6% on political, fiscal strain; Brent crude climbs to $102

The European Union is considering import limits on Chinese hybrid vehicles to shield its domestic automotive sector, as Chinese carmakers capture a record 12% share of regional sales, according to people familiar with the plans.

The prospective trade restrictions arrive amid deepening market strain across the continent. Bank of France Governor Moulin pushed back against expectations of central bank support, stating that conditions for the European Central Bank to intervene have not yet been met, even as a persistent selloff in French sovereign debt continues to rattle regional benchmarks.

Global policy risks also took center stage in Washington, where International Monetary Fund Managing Director Kristalina Georgieva warned that the world economy confronts a compounding “risk cocktail” driven by artificial-intelligence disruption, volatile oil markets, and elevated debt loads. Geopolitical anxieties intensified alongside her remarks, as Iran stepped up attacks on commercial vessels despite an increase in maritime traffic navigating the Strait of Hormuz.

In corporate moves, the Dutch government announced plans to halve its stake in ABN Amro Bank NV to 10.5%, unwinding a significant portion of its post-crisis holding. In Asia, Hong Kong’s exchange operator expanded the Hang Seng Tech Index constituent count from 30 to 50 members, a step designed to amplify the weighting of emerging robotics and AI firms. Meanwhile, German industrial production delivered a rare upside surprise, climbing 2% in August—its steepest advance since March 2025—bolstered by a recovery in construction.

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Markets at a Glance

• Equities: Political jitters and sovereign bond pressures triggered a sharp pullback in Europe, sending regional indexes down 1.6%. In Asia, benchmarks in Tokyo and Hong Kong slipped 0.7%, while mainland Chinese shares managed modest gains.
• Futures: US stock contracts pointed to a weaker Wall Street open, with futures declining between 0.5% and 0.7%.
• Commodities: Brent crude advanced 1% to $102 a barrel as escalating security risks across Middle Eastern shipping lanes supported energy prices.
• Sovereign Debt: French government bonds remained under selling pressure, with traders weighing Moulin’s comments against widening spreads across European sovereign curves.