The EUR Brushes aside a Slump in Consumer Confidence. Next Up, the ECB Minutes and Lagarde

Following November’s prelim private sector PMIs and German business sentiment numbers, GDP and consumer sentiment figures from Germany were in focus this morning.

The German Economy

In the 3^rd quarter, the German economy expanded by 1.7% quarter-on-quarter, according to 2^nd estimate figures. This was down from a prelim 1.8% and a 2^nd quarter 2.0%.

According to Destatis,

• Household final consumption expenditure rose by 6.2% on the previous quarter.
• General government final consumption fell by 2.2%, however.
• Gross fixed capital formation in machinery and equipment declined by 3.7% and in construction by 2.3%.
• Foreign trade also decreased in the quarter, with exports of goods and services down 1.0% on the 2^nd quarter of 2021. Imports fell by a more modest 0.6%.
• Year-on-year, the economy expanded by 2.5%. In the 2^nd quarter, the economy had expanded by 10.4%.

German Consumer Sentiment

Consumer sentiment figures also disappointed, with the GfK consumer climate index falling from +1.0 to -1.6. Economists had forecast a decline to -0.5.

According to the November survey,

• Consumer confidence took a marked hit in November, with both economic and income expectations in decline.
• While the economic outlook of consumers slid by 15.6 points to 31 points, the indicator was still 31 points up from the same month a year earlier.
• The income expectations indicator fell by 10.4 points to 12.9.
• Falling to a 9-month low was the propensity to buy indicator, which declined by 9.7 points to 9.7. A lower value was last recorded in Feb-2021 at 7.4%.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.11969 before finding support.

In response today’s business sentiment figures, the EUR rose to a post-release and current day high $1.12203.

At the time of writing, the EUR was up by 0.19% to $1.12203.

Next Up

With the U.S markets closed for Thanksgiving, there are no stats from the U.S to influence later in the day.

The ECB’s monetary policy meeting minutes and ECB President Lagarde will draw attention, however.