France’s Deepening Economic Decline in Manufacturing and Renewed Reduction in Services

The French economy has flipped int a tailspin after four consecutive monthly expansions according to the latest PMI data for June. Headline HCOB Flash France Composite PMI Output Index slipped from 51.2 to 47.3 to signal the fastest rate of decline since February 2021. Service sector activity showed renewed weakness in June as it also fell into contractionary territory. With ongoing aggressive ECB rate hikes 2023 faces further downside across these metrics that still are not reflecting a fraction of … Continue reading “France’s Deepening Economic Decline in Manufacturing and Renewed Reduction in Services”

Germany Population in 2022 Grew Largest Since Reunification, Led by Ukrainian Refugees

Germany’s population in 2022 grew by 1.12 million, or 1.3 percent, to 84.4 million. In 2021 the population grew just 0.1 percent. It was the largest annual surge in population numbers since Germany’s reunification of East and West over three decades ago. The surge was mainly due to increased pregnancy’s due to Covid lockdown and a notable influx of 1.46 million individuals through net immigration mainly caused by the arrival of refugees from Ukraine. Net migration was 329,000 in 2021. … Continue reading “Germany Population in 2022 Grew Largest Since Reunification, Led by Ukrainian Refugees”

German Industrial Base Still Struggling, April Factory Orders -0.4% vs +3.0% m/m Expected

Germany’s industrial powerhouse has still not recovered from the supply line crisis and then the difficulties of being so reliant on Russia for energy and the shocks that came with that. German industrial orders unexpectedly dropped by 0.4% m/m in April 2023, missing market estimates of a 3.0% rise and following an upwardly revised 10.9% fall in March. This was the second straight month of decline in industrial orders, dragged down a fall in large-scale orders. If you take out … Continue reading “German Industrial Base Still Struggling, April Factory Orders -0.4% vs +3.0% m/m Expected”

Germany Inflation Continued to Ease in April, However Energy Prices Did Rebound

Germany’s consumer price inflation eased further to 7.2 percent year-on-year in April 2023, down from 7.4 percent the month before and slightly below market expectations of 7.3 percent. Well down from 8.7% just two months ago. The rate hit its lowest level since August 2022, but remained well above the ECB’s target of 2.0 percent. Energy inflation accelerated bounced to 6.8 percent from 3.5 percent in the previous period but it still down sharply from 19.1 percent in February. However, … Continue reading “Germany Inflation Continued to Ease in April, However Energy Prices Did Rebound”

Germany Inflation Fell Further in March as Energy Prices Slowed Sharply

Germany’s consumer price inflation eased further to 7.4% year-on-year in March 2023, down from 8.7% in the previous two months. Market expectations were 7.3%. The rate hit its lowest level since August 2022, but remained well above the ECB’s target of 2.0 percent. Energy inflation slowed sharply to 3.5 percent from 19.1 percent in February. However, food prices still remain elevated, increasing at a faster 22.3 percent, compared with a 21.8 percent rise the month before. At the same time, … Continue reading “Germany Inflation Fell Further in March as Energy Prices Slowed Sharply”

Germany Business Shrugs off Banking Crisis, Inflation and Strikes – Ifo

Despite constant negative headwinds in Germany sentiment in German business has improved. The Ifo Business Climate indicator for Germany increased to 93.3 in March of 2023. The index is the highest since February of 2022 beating market forecasts of 91 and up from 91.1 the previous month. Confidence among businesses rose for a fifth consecutive month, despite the recent banking turmoil surrounding Deustche Bank, inflation, strikes and borrowing costs. This upward development was driven primarily by business expectations; companies also … Continue reading “Germany Business Shrugs off Banking Crisis, Inflation and Strikes – Ifo”

Russia Likely to Seal Nord Stream Pipelines as German Dependence on Russian Gas Has Collapsed

Russia is set to seal up and mothball both Nord Stream 1 (NS1) and Nord Stream 2 (NS2) pipelines that runs from Russia to Germany sources familiar with the plans have told Reuters. Three of the four pipes (each has two) were ruptured by unexplained blasts in September which have been subject to many different theories of who to blame, one of the Nord Stream 2 pipes remains intact. Russia’s invasion of Ukraine had already seen Nord Stream 1 at … Continue reading “Russia Likely to Seal Nord Stream Pipelines as German Dependence on Russian Gas Has Collapsed”

European Manufacturing Production Rose First Time Since May 2022

European countries manufacturing PMIs in February remained in contraction (actual 48.5; prior 48.8) S&P Global flash indices show. Manufacturing production increased for the first time since May 2022, though fractionally. We continue to see mostly milder contractions but ongoing contractions, nonetheless. On a separate note, the European Central Bank began reducing holdings in its Asset Purchase Program portfolio today. With ongoing aggressive ECB rate hikes 2023 faces further downside across these metrics that still are not reflecting a fraction of … Continue reading “European Manufacturing Production Rose First Time Since May 2022”

Germany’s Economy Unexpectantly Contracts in Q4

Germany’s gross domestic product (GDP) contracted 0.2 percent for the quarter in the final three months of 2022, following an upwardly revised 0.5 percent expansion in the previous period. The market expectations of 0.0% q/q. The contraction in Europe’s largest economy was mainly led by a decline in household consumption, amid rising interest rates and stubbornly high inflation. By comparison the US economy increased at an annual rate of 2.9% in the fourth quarter, ahead of consensus 2.6%. On a … Continue reading “Germany’s Economy Unexpectantly Contracts in Q4”

German DAX Rallies 8% to Start 2023 as Euro Rallies and Natural Gas Falls

Germany’s Blue-Chip DAX 40 index has rebounded sharply in the first two weeks of 2023, jumping 8.35%, after falling 12% in 2022. The Euro Stoxx 50 Index is up 9.42% for the year. European equity markets closed lower in the last trading session of 2022, with the benchmark Stoxx 600 suffering a 12.8% yearly loss, the biggest since 2018. Support is coming from plummeting energy prices with natural gas back down to pre-Ukraine invasion levels. Support is also coming from … Continue reading “German DAX Rallies 8% to Start 2023 as Euro Rallies and Natural Gas Falls”