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Analysts at Deutsche Bank notes that the pace of Eurozone’s growth momentum is deteriorating rapidly and as a result they are cutting their 2019 growth forecast to 0.9%.

Key Quotes

“Eurozone growth momentum is slowing rapidly. We cut our 2019 growth forecast further to 0.9% from 1.2%, the 3rd downward revision in the last 2m. Weak external demand is a key drag, compounded by concerns of cracks appearing in domestic resilience weakening job and capex indicators.”

“In January, German manufacturing PMI fell below 50 and we now expect Germany to contract again in Q1-19. Eurozone composite PMI for January fell for the fifth month in a row. Our SIREN Momentum index also continued to slide in Jan falling to its lowest level since later 2014.”

“Finally, our Eurozone trade cycle indicator also suggests drift towards recession. Risks are mainly on the downside. “No deal” Brexit, trade war escalation (auto tariffs by US) could tip euroarea economy into recession.”