• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Expect 'Dramatic Slowdown' in Germany: Saxo Bank Analysis

Saxo Bank chief economist Steen Jakobsen had some interesting comments on Germany and German exports given a slowdown in China and a rising Euro.

To help put things in perspective, here is a chart on the Euro.

$XEU Euro - Philadelphia INDX

Technical analysts will point out this is a bearish break of the trendline, thus the euro may be headed lower.

Fundamentally, the chart reflects an unexpected rate cut by ECB president Mario Draghi as well as statements by various ECB members regarding the possibility of negative interest rates.

Let's continue the fundamental view as presented by Steen Jakobsen.


Expect Dramatic Germany Slowdown

Via email, Steen writes ...

The German economy is heavily exposed to global growth which we see dramatically slowing down - the strong EURO will impact export 5-7 month from now which creates dramatic slow-down where we even could see the German economy going below 1% growth and come close to recession.

Our Economy-Physics models sees slow-down for the next three to six-month then small rebound before dramatic slow-down in tail-end of 2014 - overall the German GDP will be challenged.

German industry and its consumer is increasingly becoming uncompetitive through one of the worst energy policies in Europe. Right now German companies (Read: BMW and Daimler) are either already moving or about to move jobs to mainly the US due to steep rises in energy cost.

The new coalition furthermore wants to pursue less flexible labor market model to "reset" inequality. Nice top line effort wrong method.

Finally, the European economy is almost perfect symmetrical in its peaks and valleys: (Source: Bloomberg LLP & Citigroup CESI Index)


Eurozone Symmetry

Eurozone Symmetry Chart
Larger Image

I agree with the viewpoint stated by Steen.

For further discussion and analysis, please see ...

 

Back to homepage

Leave a comment

Leave a comment