European figures show a slight rise on GDP giving volatility to German and French indices.
Germany has escaped recession as Europe’s strongest country reports prelim GDP q/q of 0.1%, up from -0.2%. The Federal Statistical Office (Destatis) commented that the German economy turned out to be stable in a difficult global economic environment. But expectations are receding for interest rates to rise. This is against a background of calls for more structural measures to assist the economy as recovery has now gone into near stagnation. This follows a European negative spending policy in place for nearly 12 years. According to the most recent calculations, the GDP had slightly decreased (–0.1%) in the second quarter of 2014 after the German economy had started the year with much momentum (+0.8% in the first quarter of 2014).
Highlights of the German data:
The latest positive figure has mainly been driven by consumptive contributions as households increased their final expenditure in the third quarter of 2014.
Foreign trade also supported the German economy.
The increase in exports was higher than that of imports. Consequently, the balance of exports and imports had a slightly positive effect on the GDP in a quarter-on-quarter comparison.
Gross fixed capital formation especially in machinery and equipment in the third quarter was considerably down on the previous quarter.
Gross fixed capital formation in construction decreased slightly.
In a year-on-year comparison, the German economy grew. The price-adjusted GDP in the third quarter of 2014 was up by 1.2% on the third quarter of 2013.
German DAX chart following figures up by 0.10%
France also showed a slight jump in Prelim GDP q/q 0.3%, forecast at 0.1%, previous -0.1%.
Highlights of French GDP:
Households’ consumption expenditure kept increasing moderately (+0.2% after +0.3%).
General government expenditure increased by 0.8% in the last quarter (after +0.5%).
Total gross fixed capital formation (GFCF) went down again (–0.6% after –0.8%). Thus, final domestic demand (excluding inventory changes) was still going up and contributed for +0.2 points to GDP growth (after 0.1 points in Q2).
Exports recovered (+0.5% after –0.1%) while imports accelerated (+1.1% after +0.3%).
The foreign trade balance contributed negatively to activity (–0.2 points after –0.1 points in previous quarter) while changes in inventories contributed positively to GDP growth (+0.3 points after –0.1 points).
French 40 [CAX] index shows reaction of slight rises and volatility.
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