German consumers continue to remain positive, private consumption to contribute to Q2 GDP growth
Source: FxWire Pro - Commentary / 24 May 2018 15:13:38 America/New_York
German consumers continue to remain upbeat. In spite of the weak tone to much recent data, there have been some bright spots, note least with respect to household confidence. Yesterday’s flash Commission index implied that consumer sentiment in the currency bloc continued to be widely stable at an elevated level in May. The German GfK indicators released today also implied that the same is true in the largest member state. Indeed, the indicator reached a six-month low of 10.7, the headline index of German consumer confidence dropped just 0.1 point and continued to be above the range of the first half of 2017 and recent years, noted Daiwa Capital Market Research in a report.
Delving into details, expectations regarding the economy and personal finances also continued to be elevated by historical standards, although the former was admittedly considerably lower compared to recent months and households’ propensity to consume moderated. However, the average headline index for the second quarter continued to be virtually unchanged from the first quarter when it reached the highest level since 2001.
“So, while there have been concerns about the sluggishness of German spending since the middle of last year, we think that private consumption will have provided decent support to GDP in Q2, and also forecast a small pickup in German economic growth this quarter to 0.5 percent Q/Q”, added Daiwa Capital Market Research.
At 18:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at -31.232, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -48.6572. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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