- Former preference for U-shaped recovery (EZA884) seems to be rejected by economic data, as current data support a V-shape – similar to the one seen in 1984 and 1994.
- Despite this dataflow we stick to our previous growth projection, given the temporary forces behind the current boost to GDP.
- For 2010 we expect a setback in GDP – following the withdrawal of fiscal stimulus, stalling of net export growth and little change in inventories.
- Monetary stimulus will kick in only gradually, helping sustained and accelerating growth only in the second half of 2010 (H2 10).
Asset conclusions: data weakening implies delay of ECB exit, good for short end of bonds, in the medium term supportive for stocks, while near term risk of stock market setback increasing
Please see attached the analysis from Michael Clauss as a pdf to read onscreen or simply print.
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Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
Discussion Partners
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
© EZA
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