BancaMarch: The German Council of Ministers on Wednesday approved the draft budget for 2024, in which it plans to return to the path of fiscal consolidation and which envisages an increase in defence spending and cuts in all other departments, among which the most affected are transport, science and the family. Spending will thus have to fall by 6.4%, from €476.3 billion in 2023 to €445.7 billion the following year….
The German 2s10s curve has inverted to two-decade highs, surpassing the levels seen in March. Macro continues to slow and Morgan Stanley (MS) analysts lower their growth forecasts for Europe with the German IFO contracting, for the second consecutive month more than expected by both consensus and Morgan Stanley… and in line with last Friday’s disappointing European PMIs. The bad data is again concentrated in the deterioration of the expectations…
Link Securities| The German Federal Statistical Office yesterday published that Germany’s producer price index (PPI) fell 1.4% in May compared to April, significantly more than the 0.7% decline expected by FactSet’s consensus of analysts. On a year-on-year-year basis, Germany’s PPI rebounded by 1.0% in the month of May (4.1% in April), a reading that was also well below the 1.7% increase expected by analysts. May’s year-on-year PPI growth rate was…
Bankinter : German industrial producer prices decelerated sharply in April to +4.1% year-on-year vs +4.3% expected and +6.7% previously (revised from +7.5%). In the month, +0.3% vs -0.5% expected and -1.4% previously (revised from -2.6%). Assessment: Industrial production prices have come out better than expected. After peaking in August 2022 (+45.8% year-on-year) and maintaining this pace in September, the level of prices has now accumulated seven consecutive months of slowdown…
CoM| Headline inflation in Germany fell to 7.2% year-on-year in April from 7.4% in March, matching the consensus forecast and the first estimate. The harmonised rate declined by 0.2 p.p. to 7.6%, also in line with the first estimate and the consensus. The underlying rate, which excludes energy and food, remained at 5.8 per cent. “The inflation rate has weakened for the second month in a row, but remains at…
Bankinter : Industrial Production falls more than expected in March. The year-on-year rate remains positive On a month-on-month basis, Industrial Production fell by -3.4% in March versus -1.5% year-on-year and +2.1% year-on-year. On a year-on-year basis, it remains positive +1.8% from +0.7% year-on-year. Assessment: The rapid rise in global interest rates is affecting the demand for industrial goods in Germany. The same trend was evident in Germany’s March Factory Orders…
Santander Corporate & Investment’s flash services PMIs released this morning will once again be a headache for the ECB, as they show an unexpectedly strong rebound in France at a delicate time of rallies (56.3, 53.5e, 53.9p). But also in Germany (55.7, 53.4e, 53.7p). And at a time when services inflation remains one of the real workhorses as our economists recalled after the release of the final March figure a…
Banca March : Investor and analyst confidence in Germany is deteriorating. The ZEW index fell more than expected in April with the reading of economic expectations at 4.1 from 13 and below the 15.6 expected. This suggests that the outlook for economic developments in the coming quarters is dimming after the deterioration in financial conditions in March. For its part, the current situation component of the ZEW index rebounded more…
Bankinter | IFO Business Climate Survey (March) 93.3 vs 91.0 expected and 91.1 previous. Expectations 91.1 vs 88.3 expected and 88.5 previous. Current Situation 95.4 vs 94.1 expected and 93.9 previous. Analysis: The data bring a positive surprise. However, in the current context, the IFO is less influential. This week the focus is on the financial sector and inflation data in Europe. The downside is that solid economic data give…
Link Securities | Germany’s central bank, the Bundesbank, as reflected in its Monthly Bulletin, expects Germany’s Gross Domestic Product to contract in 1Q2023 relative to the previous quarter. The Bundesbank believes that the productivity of the German economy could fall again in 1Q2023, albeit less sharply than in the previous quarter. According to the bulletin, the German economy recovered at the beginning of 2023 only with difficulty from the sharp…