19
Sep
Can European growth recover without Germany?
GDP up +0.2% in Q2. Germany poses a problem. The ECB to inject 20bn/month for two years. Rebound of the euro. Asset rotation favourable to European equities.
Key points
- Contraction of Germany’s GDP hampers growth in Europe
- Underlying trends in consumption and investment remain positive
- Leading indicators may have seen the worst and finally seem to be looking up
- German manufacturing sector at its lowest
- -0.5% decline in industrial production in April
- Gradual improvement in confidence
- Possible rebound of the euro
- ECB firmly committed to supporting economic growth
- Real yields still attractive despite falling inflation
- Is the recession factored into long-term euro rates?
- Next rotation of investment flows in favour of European equities
