No recession in Germany: the powerhouse economy managed to grow +0.1% in Q3, according to the preliminary release and didn’t suffer two consecutive quarters of economic squeeze. In addition, Q2 contraction was trimmed from -0.2% to -0.1%, so the actual number is actually quite good. Year over year, the economy grew 1.2%, better than 1% expected.
EUR/USD is on the rise, reaching towards 1.2450.
Analysis: Good news for Germany, bad news for Europe
Consumer spending was behind this growth, while construction and equipment investment weighed back.
Is this good news for the euro-zone and the euro? Or does this mean lack of incentive to do more and eventually negative?
Germany enjoys some kind of growth, a surprising fall in unemployment and the country doesn’t care about lowflation. The rift between Germany and the rest could widen.
Germany, Europe’s largest economy, was expected to report a growth rate of 0.1% in Q3. This kind of preliminary read would evade a technical recession, after Germany contracted by 0.2% in Q2. Year over year, a growth rate of 1% was expected after 0.8% last quarter.
EUR/USD traded around 1.2430 towards the publication.
Earlier, France reported a better than predicted growth rate of 0.3% in Q3, but this was marred by a downwards revision of Q2 data.
We later have Italian GDP and the initial estimation for the whole 18 country euro-zone.
More: EURUSD Price Squeeze – Looking to Catch Bearish Breakouts
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