Germany Could Be On Its Way into Recession

Print This!

Germany saw its economy contract by 0.4 percent in the fourth quarter.  With decreasing demand for its exports, Germany could fall into recession.

earth image Germany Could Be On Its Way into RecessionGermany could be joining the Eurozone recession during the current quarter (NYSEARCA:EWG).  Hidden between the lines of a seemingly upbeat report from Destatis, was the news that the German economy contracted by 0.4 percent during the fourth quarter of 2012.  Despite the attempted positive spin, the opening language of the report was more defensive than optimistic:

The price-adjusted gross domestic product (GDP) increased by 0.7% compared with the previous year.  This is the result of the first, provisional calculations of the Federal Statistical Office (Destatis).  In the previous two years, GDP growth had been much larger (4.2% in 2010 and 3.0% in 2011), but that was due to a catching-up process following the worldwide economic crisis of 2009.  “In 2012 the German economy proved to be resistant in a difficult economic environment and withstood the European recession”, said Roderich Egeler, President of the Federal Statistical Office at a press conference on the gross domestic product of 2012 in Wiesbaden today.  In the second half of the year, however, the economic activity in Germany slowed down considerably.

As of 11:17 EST, the Euro STOXX 50 Index declined 0.60 percent to 2,699 – staying above its 50-day moving average of 2,593.  The STOXX 50 is holding above its March 19 high of 2,608 and it continues to be experiencing resistance at the 2,700 level, as its Relative Strength Index is 68.22.  Most analysts consider an RSI above 70 as an “overbought” signal (NYSEARCA:FEZ).  The FTSE 100 Index dipped 0.04 percent to 6,105 (NYSEARCA:EWU).  The German DAX Index sank 0.87 percent to 7,662 (NYSEARCA:EWG).  France’s CAC 40 Index fell 0.36 percent to 3,695 (NYSEARCA:EWQ).  Spain’s IBEX 35 Index declined 0.40 percent to 8,597 (NYSEARCA:EWP).  Italy’s FTSE MIB Index advanced 0.37 percent to 17,456 (NYSEARCA:EWI).

As of 11:24 EST, the euro advanced 0.38 percent against the dollar, trading at $1.3331 (NYSEARCA:FXE).  Euro Holds Gains from Breakout

Spain’s ten-year bond yield declined to 5.00 percent on Tuesday from Monday’s closing level of 5.03 percent.  Spain’s two-year bond yield jumped to 2.47 percent on Tuesday from Monday’s closing level of 2.20 percent (NYSEARCA:EWP).

Italy’s ten-year bond yield advanced to 4.23 percent on Tuesday from Monday’s closing level of 4.22 percent (NYSEARCA:EWI).

On London’s ICE Futures Europe Exchange, March futures for Brent crude oil declined by 34 cents (0.31 percent) to $110.61/bbl. (NYSEARCA:BNO, NYSEARCA:USO).

February Gold futures advanced by $12.50 (0.75 percent) to $1,681.90 per ounce (NYSEARCA:GLD).

Pages: Next

Be kind & share...Share on Facebook0Tweet about this on Twitter0Share on LinkedIn0Pin on Pinterest0Share on Google+0Digg this
.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.

Go to Wall Street Sector Selector Home or Check our Special Wall Street News Section

Visit Us On TwitterVisit Us On FacebookVisit Us On YoutubeVisit Us On Linkedin
Make sure you create your redirects.txt file and that it's readable by the redirect script.