German Economy Flagging Amid Period of Uncertain International Trade
What a year we’re having. Brexit has actually happened (slow clap), the world is grappling with the fear of the coronavirus turning from pandemic to epidemic and Trump has been exonerated of any wrong-doing. All that, and it’s still only February! Today, we’re looking at the struggling German economy, before giving you a roundup of all the events you need to keep your eye on this week. Ready to rumble?
Decline in Overseas Exports Hits German Economy Hard
It’s official, the German economy isn’t having the best time of it. Europe’s largest economy (by far) had another weak three months at the end of 2019, compounding fears that international trade is looking more than a little wobbly at the moment.
In a nutshell, the country’s Gross domestic product (GDP), the total production of goods and services, was almost unchanged from the previous quarter. Compared with the same period in 2018, GDP was higher by just 0.4%.
These underwhelming figures partly reflect a problem for all national economies, i.e. a fall in overseas exports, and if there’s one thing that Deutschland really relies on it’s overseas exports! The country is third only to the US and China in terms of exports and a large chunk of that (around 20%) comes from its famous manufacturing sector.
The Trump Effect
It’s fair to say that Germany isn’t crazy about The Don. His administration’s aluminium and steel tariffs have done some damage, so too has the lingering trade war between the US and China, albeit more indirectly.
Because both the US and China are important markets for German industry, the damage they do to one another can have a knock-on effect to the sales of German goods. Which is not good!
To make things worse, Germany would also be in a sticky situation if Trump were to act on his threat of imposing 25% tariffs on car imports from the European Union.
Whether you’re a FX trader or you’re into your manufacturing stocks, you’ll probably want to keep your eyes on this!
This Week’s Trading Events
Trading can be a tough nut to crack, let’s be honest. The hardest bit? Finding a source that you can believe and trust. Enter Contentworks! We’ve dug up almost every source we can find, sorted the wheat from the chaff and can now bring you a short list of the events you really need to take notice of this week.
● On Tuesday, you’ll want to keep your eyes open for the RBAs Meeting Minutes (AUD) and the UKs ILO Unemployment rate (Dec) (GBP).
● Wednesday brings us the UK Consumer Price Index (GBP). We’ll also get a look at the FOMC Minutes (USD).
● The Australian Bureau of Statistics will announce some important (un)Employment stats (AUD) on Thursday, and we’ll also hear the Chinese Interest Rate Decision (CNY).
● Finally, a busy, PMI-heavy Friday will kick off with the Markit Manufacturing PMI and the Markit PMI Composite (Feb) (EUR). Later, we’ll learn about the wider EU Composite PMI (EUR). After that, the UK’s Markit Services PMI (Feb) (GBP) will be announced. Just for a little variation, we’ll close the week in Canada, with their monthly Retail Sales figures (CAD).
If you’re looking to supply your traders and investors with a short, snappy, preview of the week ahead, a review of the week behind, or any kind of finance-related content, contact us for a tailored solution.
The Contentworks team