Germany hampers European growth and confidence


20 Mar

Germany hampers European growth and confidence

Weak GDP growth in Q4 (+0.2%). Outlook for 2019 revised downward.
ECB to reinject liquidity (TLTROs). Euro resilient. Take profit on equities.

Key points

  • European growth still very weak in Q4 2018 (+0.2%)
  • Germany solely responsible
  • European GDP up +1.2% yoy
  • German economy narrowly avoids entering a technical recession
  • Leading indicators may have already seen the worst but fail to bounce back
  • Manufacturing PMI below 50
  • Situation in Germany hampering confidence
  • Euro stays resilient
  • ECB announces a new series of TLTROs
  • No rate hike but 700 billion in loans
  • Bond market yields temporarily vanish
  • European equities retain their risk premium after indices rise +13%
  • Time to take profits on equities