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Signs of industrial recession in Germany open European markets today

While waiting for the opening of the European stock markets today, confirmation has arrived from Germany that industrial production is in crisis and has worsened in the monthly survey in December.
The German result signals an industrial recession in the European economy once the engine of the entire continent and now labeled the sick man of Europe due to a slowdown in growth and production that has added to state budget problems.
While world markets come to terms with the glimmer of optimism launched yesterday by China to support its shares which have been selling off in recent weeks due to a decline in confidence and with various statements from Fed officials, European investors are keeping macro data monitored.
The old continent, also poised between the end of the rate hike and the expectation of a decrease in the cost of money, is faced with general economic weakness that leaves traders skeptical.
The terrible result on German industrial production adds to the less than encouraging forecasts for a full recovery in 2024.
Is the sentiment of European markets destined to weaken? The German industrial recession inaugurates the day of the European stock markets.
German industrial production extended its fall in the monthly figure for December, thus highlighting the seventh consecutive month of declines.
Output fell 1.6% from November, led by the chemicals and construction sectors, according to the statistics office.
The decline was far worse than the -0.5% forecast by analysts in a Bloomberg survey and its overall level is now the lowest since June 2020.
Excluding the shock of the pandemic, the last time this was weak was in 2010.
read also Germany's green dream is collapsing Germany faces a potential recession after output fell 0.3% in the fourth quarter of 2023 and this year started on fragile footing.
The data underlines the difficulty in reviving the economy in a context of weak global demand, high interest rates and lasting consequences of the energy crisis.
Mixed news came earlier this week, when data showed an unexpected increase in December industrial orders alongside a continued decline in exports.
The inflation and employment environment remains more positive.
Consumer price growth slowed more than expected in January to 3.1% and falling unemployment underlined the surprising resilience of the labor market.
But Finance Minister Christian Lindner warned that Germany was suffering from its failure to revive production.
“We are no longer competitive,” he said at a Bloomberg event in Frankfurt on Monday.
“We are getting poorer because we have no growth.
We are falling behind." read also Germany is dragging Central Europe into recession However, the 4.0% increase in production in the automotive industry had a positive effect on the overall result.
In the last quarter of the year, a less volatile figure, industrial production fell by 1.8% compared to the previous three months.
The EUR/USD pair remains above 1.0750, benefiting from a retreat in the strength of the US dollar and market optimism which weakens demand for the greenback.
The Euro, therefore, seems to ignore the conflicting data on German industrial production.

Author: A.W.M.

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