_Economy and Finance

Economic Briefing Germany: Only a small minus for manufacturing in May In May, German industry cut production by 1% on the previous month. But since output had increased significantly in the two preceding months, the average over April and May was nearly 3% up on the first quarter, which leads us to expect a very large gain in GDP. However, this momentum is unlikely to continue in the third quarter. Commerzbank Corporates & Markets Economic Research https://research.commerzbank.com

Commerzbank Corporates & Markets Economic Research https://research.commerzbank.com Economic Briefing Germany: Good order figures with one blemish Germany’s industrial orders surprised on the positive side in March by rising 2.2% on the previous month. Consequently, the basis trend in orders is slightly upwards again. The one flaw in these otherwise good figures is the sharp fall of domestic core capital goods orders, which could indicate a lower willingness to invest again.

Commerzbank Corporates & Markets Economic Research https://research.commerzbank.com Economic Briefing ZEW: Poor data cause concern among analysts The ZEW Index for economic expectations in Germany tumbled from 48.5 to 36.3 in April, which was a stronger fall than expected by most analysts. The camp of economic optimists has clearly shrunk. This was probably caused by the decline in sentiment indicators in March and the poor data from German industry. Even so, we still expect the German economy to pick up considerably in the coming months. This is likely to be confirmed by the purchasing managers’ index and the Ifo business climate – due next week – that should recover from March-setbacks. Analyst: Ulrike Rondorf

Commerzbank Corporates & Markets Economic Research https://research.commerzbank.com Economic Insight German Real Estate Monitor Residential property prises are rising strongly in German cities. We consider which house price indices are worth looking at and which indicators may warn of possible overheating of the market. The property market should continue to revive in the next few years, above all due to low interest rates. Even though a property bubble is less likely in Germany than it was in Spain or Ireland, the ECB’s long-standing expansionary monetary policy, maintained for the sake of the peripheral countries, poses significant long-term risks. Analyst: Ulrike Rondorf For important disclosure information, please see https://research.commerzbank.com/portal/en/site/equity/disclaimer_1/index.jsf