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Europe’s Biggest Economy Stagnates | Markets Weigh US Consumer Data

Published February 14, 2020
  • Quarterly German GDP numbers showed zero-growth in Q4 2019, and just 0.6% for all of 2019.  The data shows that Germany, Europe’s largest economy, was already on the brink of recession pre-coronavirus.  Given the significant trade ties to China, the coronavirus fallout could push the German economy over the edge if the economic impact does not get contained.  Total eurozone growth was just 0.1% in Q4, its lowest rate in seven years.  With the euro already sitting at 34-month lows, the reaction to US consumer data this morning will play a critical role in determining the euro’s direction heading into the long weekend.
  • Markets will get a double dose of US consumer data this morning.  First was Retail Sales data, which rose 0.3% in January, meeting consensus expectations.  However, the control group reading showed no growth, missing market expectations. Coming up at 10:00 am EST is the Michigan Consumer Sentiment Index, which provides insight into consumer confidence in economic activity.  The index is expected to decline modestly but remains among near three-year highs.  The US consumer is an important driver of the economy so both data points could be a key driver for the US dollar today which is already sitting at four-month highs.