Rising concerns following GDP figures in EMU and Germany – UOB

Researchers at UOB Group assessed the recent publication of advanced figures for Q2 GDP in the euro area and Germany.

Key Quotes

“Economic growth across the Eurozone slowed in the second quarter, figures from Eurostat confirmed on Wednesday. GDP came in at 0.2% q/q, down from 0.4% q/q in the first quarter of the year and in line with the first estimate. Over the year, GDP came in at 1.1% y/y for the second quarter, down from 1.2% y/y in the first quarter. Eurostat is slated to publish detailed GDP data for the second quarter on 6 September”.

“Weakness in Germany and Italy were the main drivers behind the slowdown in the Eurozone, whilst Spain and France also witnessed a moderation in their economies. Notably, Germany’s GDP shrank 0.1% q/q in the second quarter of the year, confirming the lackluster performance of the German economy, which was hit by rising trade fears, the slowdown of Chinese imports and home-grown industrial and economic problems. The GDP decline puts Germany at risk of a technical recession this year. Annual growth slowed to 0.4% y/y from 0.9% y/y in the first quarter”.

“Germany’s shrinkage in GDP growth marks the end of a decade of expansion in Europe’s biggest economy, which has grown by an average of 0.5% q/q every quarter since the end of the 2008-2009 recession, expanding in 35 of the last 40 quarters”.

“Overall, the health of Europe’s largest economy is significant to the rest of its partners, and the slump in the German economy has already had an impact on its neighbours. This further reinforces the case for another round of monetary easing by the European Central Bank (ECB) next month, which could be announced at one of the last policy meetings of outgoing ECB President Mario Draghi. The irony is German officials and public opinion have long criticized the ECB’s policy, arguing that negative interest rates in place since 2014 are hurting a nation of savers; however, now the German economic backdrop adds to the case for the ECB to further loosen its monetary policy”.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD falls off the highs amid trade wars, weak German figures

EUR/USD is falling toward 1.1100. The German IFO Business Climate dropped to 94.3 points, below expectations. Markets are concerned by the intensifying US-Sino trade wars.


GBP/USD consolidates amid Brexit uncertainty

GBP/USD is trading below 1.2300, consolidating its gains. The UK and the EU have been blaming each other for a potential no-deal Brexit. US-Sino tensions are in play as well.


USD/JPY recovers farther from multi-year lows on Trump’s positive trade-related comments

The incoming positive trade-related comments dented the JPY’s safe-haven demand. Improving global risk sentiment helped the pair to recover around 150-pips intraday. Investors now look forward to the US durable goods orders data for a fresh impetus.


Gold retreats from multi-year tops, fills weekly bullish gap on positive trade headlines

Gold extended its intraday pullback from fresh multi-year tops and dropped to fresh session lows in the last hour, filling the weekly bullish gap. The US-China trade tensions escalated further.

Gold News

Forex Today: Trade wars paint markets in red, Brexit looks worse, and central banks are limited

Here is what you need to know on Monday, August 26th: The US-Sino trade war is painting global markets in the red. The US dollar is losing some ground to major currencies as yields plunge, while it gains against commodity currencies. Gold is rising and oil is falling.

Read more