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Eurozone and German economy bottoming-out? – DBS

FXStreet (Barcelona) - The DBS Team notes interprets the Nov Zew and IFO indicies bouncing off lows as an indication for bottoming-out of the German and the Eurozone economy, but doubt if it will sustain.

Key Quotes

“Nov Zew and IFO business condition indices have bounced off lows, in a slide that began early this year. These can be interpreted as initial signs of bottoming-out for the German and the Eurozone economy but it is difficult to say if this will sustain. Especially as other hard data suggest the economy is heading for an¬other quarter of flat 0.1-0.2% QoQ growth in 4Q.”

“PMIs out this week saw Nov‘s advance reading slip to 51.4, to a 16-month low and down from 52.1 in Oct. This week’s Nov CPI and unemployment rate will point to further disinflation worries, which will push the European Central Bank (ECB) to consider further measures.”

“The OECD warned yesterday that the Eurozone economy was at risk of falling into a ‘persistent stagnation trap’ and was a risk to global growth. The agency called for more monetary support and softening of fiscal discipline to keep the economy from sliding further.”

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