New data out of Germany is pretty ugly.
Industrial production fell 0.9% in September. Economists were looking for an unchanged level.
This comes after a 1.6% gain in August.
Today’s report was also much worse than High Frequency Economics’ expectation for a 1.6% increase. But before the report, they warned that they saw “nothing but downside risk to our forecast, given the miserable declining trend in exports on a year-over-year basis.”
“For Q4 however, growth may decelerate slightly further in line with mixed survey data recently, but should still be sufficient to deliver annual growth of around 0.4%,” said Societe Generale. “So far, we have not seen any signs of major troubles coming from the negotiations for a new government in Germany, which should provide sufficient stability for growth to remain close to potential over next year, with the potential of both monetary and fiscal stimulus in response to faltering growth in Europe.”