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Germany witnessing strong domestic demand but no excesses – Deutsche Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 5, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at Deutsche Bank, note that the Germany is seeing strong domestic market despite negative surprises.

    Key Quotes

    “Just like last year, the weakness of the industrial data is overstated by holiday effects. Nevertheless, there is a risk of an even lower foreign demand than stated by our already cautious estimates. This, however, is balanced by the upward risks for the domestic economy.”

    Spending on refugees eroding budget surpluses: Due to the migration dynamics over the summer months, we are reducing our budget forecasts for 2015 and 2016. Relative to gross domestic product we now expect surpluses of 0.3% and 0.0%, respectively (previously 0.7% and 0.5%).”

    Private households in Germany: Low interest rates trigger increased borrowing. Despite a sustained low interest rate environment, the savings ratio of German households increased recently. German households continue to show a very cautious investment behaviour. H1 2015 saw the highest increase in indebtedness of German households since the Dotcom bubble in the early 2000s it was mostly used to finance property investments.”

    The view from Berlin. Refugee crisis: Tipping point in public sentiment and policy moves. The generally supportive public sentiment has started to turn with more people in Germany emphasising the risks than the opportunities related to the influx of refugees. To contain the political backlash a more restrictive asylum law has entered into force and Merkel is stepping up diplomatic efforts for cooperation with third countries, in particular Turkey.”
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