Morning Forex Fundamental EUR

Morning Forex Fundamental EUR

'Domestic and foreign demand for German industrial products is declining. There will be a lack of momentum from abroad in the coming months' - the Ministry for Economics and Development

German economy to weaken in Q4 and 2013

Impact High

Growth in the Europe's largest economy is likely to slow in the last quarter of 2012, and the beginning of the next year, the Ministry for Economics and Development said on Friday. German economy is expected to expand only 0.2% in the third quarter, down from 0.5% and 0.3% increases in the first and second quarters, respectively. The slowdown may be explained by a fall in both internal and external demand.

'Domestic and foreign demand for German industrial products is declining. There will be a lack of momentum from abroad in the coming months,' the ministry said.

'When coupled with the notable recent weakening in a broad swath of German economic data, we believe this news has investors more concerned about Germany's ability to continue to offset peripheral recessions. In addition, more broadly, fears are mounting weaker regional growth may short-circuit the ECB's rescue roadmap, in our view,' the research firm S&P Capital IQ said in a note.

The Stoxx Europe 600 Index plunged 0.11 per cent to 270.27. Germany's DAX Index fell 0.58 per cent to 7,163.50, while France's CAC 40 Index added 0.47 per cent to 3,423.57