German GDP grew +0.1% as expected, +1.2% y/y – EUR/USD

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