German growth surprise lifts Europe as China subdues Asia | The Daily Star
12:00 AM, November 15, 2017 / LAST MODIFIED: 12:00 AM, November 15, 2017

German growth surprise lifts Europe as China subdues Asia

Strong German economic growth data drove the euro to a three-week high on Tuesday and gave European stocks a lift after five days of falls put them at a two-month low.

The uplift to sentiment came after disappointing Chinese industrial and retail figures had subdued Asia, with investors also pondering whether a marked flattening in the US yield curve might be a harbinger of a more global slowdown.

There was no sign of that in German where an 0.8 percent third-quarter growth reading beat forecasts and showed the economy growing at annualized rates of more than 3 percent.

The euro jumped to $1.1696 versus the dollar on the figures and reached a one-year top against Sweden's crown after inflation figures there came in weaker than expected.

“It is not the dollar that is weak, it is the euro that is strong,” said John Hardy, Saxo Bank's head of FX strategy.

Combined with signs of a move up again in European bond yields, that suggested some traders were back to pricing in an end to the European Central Bank's stimulus, he said.

Also ahead on Tuesday were 13 central bank speakers, including the heads of the US, European, British and Japanese central banks The mood in Asia wasn't nearly so bullish.

China's retail sales rose 10 percent on the year in October, while industrial output grew 6.2 percent. But both were under market forecasts and briefly hit the Australian dollar, which is often used as a liquid proxy for China because of the country's vast exports of raw materials to China.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.17 percent after two sessions of declines, while Australia fell 0.9 percent.

Japan's Nikkei managed to recoup 0.4 percent after four sessions of losses, but that was not enough to shift MSCI's 47-country world index out of the red until Europe opened.

On Wall Street, a sharp drop in General Electric shares on Monday had been offset by gains in high dividend-paying sectors including consumer staples and utilities.

The Dow rose 0.07 percent, while the S&P 500 added 0.10 percent and the Nasdaq 0.1 percent.

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