Trade tensions weighing on European GDP


04 Oct

Trade tensions weighing on European GDP

Slowdown in growth. Ambiguous leading indicators. End of quantitative easing. Paradigm shift with regard to long-term rates. Attractive European equity risk premium.
Weekly Analysis

Key points

  • Slower GDP growth in Q2 (+0.4%), +2.1% yoy
  • GDP growth hampered by decline in foreign trade
  • Trade surplus down 45% in July
  • Leading indicators losing momentum
  • German economy is resilient, but risks are rising
  • Trump is the main cause of uncertainty
  • Confidence put to the test
  • Euro remains stable
  • ECB remains confident but postpones rate hike
  • Quantitative easing to end on 1 January 2019
  • Pressure expected on long-term rates
  • Why are European equities underperforming US shares?
  • 25% Eurozone equity risk premium