Disappointing German industry prompts fear for EU powerhouse
GERMAN industrial output climbed by just 0.3 per cent in June, figures showed yesterday, flagging the danger of a slowdown in the Eurozone’s usually reliable powerhouse economy.
The reading fell well short of analyst expectations. Markets had pegged an increase at 1.4 per cent.
The data comes just a day after an unexpectedly sharp decline in German factory orders in June which has sparked concern that the German economy may have contracted during the second quarter.
“June’s small rise in German industrial production was a huge disappointment, and suggests that activity in what has been the Euro-zone’s strongest economy stagnated in the second quarter,” said Jennifer McKeown of Capital Economics.
Despite the dreary news, Germany’s two year bond yields dropped into negative territory during trading hours yesterday. The drop means that investors actually lose money by purchasing the debt, which is regarded as an extremely safe asset.