Last quote by Carsten Brzeski
Carsten Brzeski quotes
If we really take Mr. Trump's words for granted then we do see the end of free trade. This is the start for a trade war. It's the start for a period of protectionism. The hope is that in the end his policies will not be as harmful as they sound right now. But if you look at these policies of 'own country first', trying to isolate the country from foreign companies, trying to impose tariffs – this will lead to retaliations from other countries, namely that the EU then will also increase border tariffs. And this clearly is the end of free trade.
The German economy in 2016 once again defied an entire series of downside risks, thanks to strong domestic demand.
The German economy in 2016 once again defied an entire series of downside risks, thanks to strong domestic demand. The economy urgently needs new impetus from new structural reforms and stronger public and private investment. It is very unlikely that it will get any of these before the elections.
Today's data finally bring some evidence that the German economy gained momentum in the final quarter of the year. Even though industrial data is still not living up to the expectations created by buoyant soft indicators, the surge in exports and the gradual recovery of industrial production brings some relief for a battered industry.
An interesting element of Dutch politics is that in many ways it is a front-runner for political trends in all of Europe. Populist parties already made it into government in the early 2000s and coalition-forming has become more complicated due to the rise of populist parties on both the right and the left wing of the political spectrum.
Unfortunately, as with so many good things, the current positive growth cycle is also coming to an end. Gradually, not abruptly.
Real risks to the German outlook mainly seem to stem from the outside. The still unknown impact from President-elect Trump on trade and economic policies, the ongoing Brexit uncertainty and renewed political tensions in Europe due to several elections or a new flaring up of the Greek crisis are in our view the biggest risks for 2017.
It is the combination of extending and tapering that we thought would not yet happen as it could risk an unwarranted increase in bond yields. Even without calling this tapering, the ECB just announced tapering.
The president could even lead to new elections and a populist government. It needs a series of very unlikely if's and when's but this did not prevent markets from speculating on a worst-case scenario in Italy.
Markets are focusing on the size of the economy and the potential for drama… totally overlook(ing) the symbolic effect, the Austrian elections could have.
Schulz, if supported by his party, could stand for a clear pro-European platform in the elections and would force Merkel to put her cards on the table. Schulz's rhetorics are clearly better than Merkel's. So, at first glance, this would be bad news for Merkel but good news for Germany.
Since the first Brexit shock, the Ifo index has staged an impressive comeback, suggesting that the summer slowdown of the entire economy was only a blip and not a new trend.
It is hard to see how German industry can shift to a higher gear. Against this background, the optimism reflected in surging confidence indicators is in our view striking.
The initial relief after the Brexit shock provided by two positive months with increasing new orders has now given room for realism. German industry is still running low on fuel.
Maybe the most interesting development in recent weeks has been the verbal shift of several ECB members towards a more hawkish tone. Other members warned against the unintended risks of maintaining interest rates too low for too long.
This clearly has the flavour of an election present. However, before anyone gets carried away by the idea of big-scale fiscal stimulus in Germany, the announced tax relief should amount to only 6 billion euros, spread over two years. Less than 0.1 percent of GDP per year.
Going into 2017, however, weaker real wage growth and the dropping inflow of refugees should weigh on consumption growth.
The "strong industrial data take away some growth concerns for the third quarter.
Testing market reactions to trial balloons is not new to the ECB. The (Federal Reserve) experience with a too early announcement of tapering, however, should still be a good warning to the ECB not to start these tests too early.
Today's Ifo index suggests that at least the Brexit fears have disappeared as quickly as they had emerged. Whether the strong (Ifo) reading is the start of another golden economic Fall or just a flash in the pan is too early to tell.
All in all, disappointing hard data in July and falling soft data since the Brexit vote had provided further evidence that the German economy was losing momentum.
Generally speaking, unless the AfD dismantles itself in the coming twelve months, the likelihood of a three-party coalition will increase as two parties will find it hard to get more than 50 percent of all votes.
Merkel's Christian alliance will now have to carve out a migration compromise, ideally in time for their party conferences in November and December.
The month of July was clearly not a good month for Germany. A further cooling of the economy in the months ahead should give more support to just-started discussions about fiscal stimulus.
A further cooling of the economy in the months ahead should give more support to just-started discussions about fiscal stimulus.
This was a clear hint that the ECB will announce technical changes to its quantitative easing purchases at the October meeting, which is a prerequisite to any extension of QE beyond March 2017.
I don't see the Fed hiking in September but of course if they would, it would make life at the ECB easier.
There is this growing concern, skepticism, about what central banks can still do.
The trend already started long before the British referendum, but clearly the Brexit vote should have been one of the main drivers behind the sharp July drop.
The economy's Achilles' heel … remains the lack of new investment. To kick-start investment in an ageing economy, some government support is needed.
Increased uncertainty about the future of Europe and the euro zone in the wake of the Brexit vote should in our view leave some marks on German industrial activity over the coming months. With stagnating industrial activity, thinner order books and dropping inventories, chances remain low that the former backbone of the German economy will quickly return to its old strength.
All in all, today's meeting was one that will quickly disappear from memories. More action in September is possible but not yet a given.
New financial heart of Europe?
Higher oil prices should lead to the first upward revision of the ECB's staff inflation forecasts since... early 2015.
The results of the run-off on May 22 have the potential to further stir up Austrian and maybe even European politics … the elections also show that populist and right-wing parties and trends are not a short-lived fashion but have become mainstream and widely acceptable even in the euro zone core.
With growth driven by construction and consumption and a government which is reluctant to follow up on international advice to implement structural reforms, the German economy has almost started to resemble peripheral (euro zone) characteristics.
This would be enough to save central banks from having to do even more to tackle deflation. On the other hand, it would probably be too little to force central banks to reconsider their policy stance, particularly in the euro zone, where high unemployment rates will keep core inflation at bay.
ECB-bashing has become fashionable in Germany.
This morning's data were a painful reminder that not all is hunky dory in the euro zone's largest economy. In fact, the German 'Wirtschaftswunder' has only some domestic magic left. consumption has become the most important growth driver thanks to a strong labour market, low interest rates and higher real wages.
Despite the fact that a compromise – at least in theory – is still feasible, it is very hard to tell where the negotiations exactly stand at the current juncture.
The European Summit in February will be another attempt to accommodate David Cameron's demands and ideas (even if they are not entirely clear to everyone) on economic governance, competitiveness and sovereignty. In the area of immigration, the refugee influx could have made it easier for David Cameron to reach some kind of compromise with the European partners.
Despite the fact that 2015 overall was a good year we do see that the economy is suffering from external headwinds such as China, emerging markets, adverse effects from low oil prices and there is now a growing question about the U.S. economy.
Looking ahead, the two-speed recovery, with strong consumption and services on the one hand and sluggish industrial production and exports on the other hand, should continue in 2016.
This is a weak recovery. The risk is that low growth means unemployment remains high and that anti euro parties gain momentum.
The strong increase in exports shows that the cooling of the global economy cannot have been as severe as some feared at the beginning of the year.
Another indicator signalling that Germany's performance is currently not champion-like.
With Germany still having these relatively low inflation numbers, the eurozone as a whole will continue flirting with deflation.
It is admitting that the recovery might not come, that the eurozone's problems go beyond structural reforms and austerity measures. It might be a U-turn for how the ECB looks at fiscal policy but not so much for how it looks at monetary policy.
High youth unemployment combined with hatred for Germany can turn into populism and nationalism quite quickly and, in the extreme case, lead to an end of the currency union.
Germany's labour market remains solid as a rock, defying the winter weather and the euro crisis.
The German economy might not be an island of happiness any longer but it remains at least an island of growth in a still recessionary eurozone sea.
With today's press conference, Draghi has sent a painful reminder that the ECB cannot solve the current crisis … there does not seem to be any quick fix or alleviation for the economy in the offing.
The economic tailwind from the last two years is clearly fading away.
Today's ruling should bring some relief to financial markets as a total chaos scenario has been avoided but it should not lead to euphoria.
Demand from other euro zone countries is stronger than expected, despite fiscal austerity, and the strengthening US economy should also bring a welcome boost to German exports.
While German consumer confidence probably took a hit with a world championship title out of reach, the German economy is still a promising candidate in another race: euro zone growth champion 2010.
We can expect probably much more fiscal stimulus then we are seeing right now, boosting disposable income, boosting private consumption and a weaker euro than we have right now, they should boost exports over some time. And all these three factors together should more or less feed through into the euro zone economy in the second half of 2009.