EZA 919 report: Germany / euro area economic recovery – turning from a V-shape to a W

27 October 2009

• 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

 

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