Slight recovery in the Eurozone despite weakness in Germany

GDP up +0.2% in Q3. Germany holds out on the edge of recession. ECB maintains status quo. Change of outlook for long-term rates. Valuations in Europe’s favour.

Key points

• Q3 slightly better than expected in the Eurozone
• Growth in Q3 driven by consumption, government spending and exports
• Leading indicators leave room for doubt
• Consumer confidence is not benefitting from reduced trade tensions
• Germany holds up despite the collapse of its industrial sector
• No new rate cuts by the ECB
• Possible strengthening of the euro
• Real yields slightly less negative but still conducive to investment
• Sharp rise in long-term rates
• European equities still more attractive than US stocks

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