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German economic surge is still subdued
In the first quarter, German economic surge was still sluggish. It’s due to the fact it was suppressed by downbeat industrial output, decreasing export demand for vehicles as well as pessimistic manufacturing sentiment, as the Bundesbank revealed in a month report on Monday.
Well, struggling with sudden weakness in among its car makers, the EU’s number one economy, Germany managed to dodge a recession the previous quarter. In fact, fresh indicators drop a hint that any recovery is going to be slow. Perhaps, in this case, the best scenario would be a drag on surge across the whole euro zone.
This quarter, car manufacturing suffered from a strike at a major engine factory, although a dive in export orders from outside the euro zone might suggest deeper problems, rather than one-off factors.
Therefore, manufacturing sector could drag down the entire economic surge for the third quarter. That’s what the Bundesbank ascertained in a regular monthly economic report.
A boom in construction as well as buoyant private consumption should underpin the German economy during the first quarter, Germany’s key financial institution pointed out, giving an emphasis to the fact that employment keeps soaring, notwithstanding the surge weakness.
Germany’s major bank told that private consumption, as indicated by the firm soar in retail sales, could pick up again considerably.
In addition to this, the European Union's trade surplus with America as well as its deficit with China both tacked on in January, acting as potential fuel for trade clashes between the world's leading economies.
In January, the European surplus in goods trade with America expanded to up to 11.5 billion euros, in contrast with 10.1 billion recorded in January last year.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!