Commenting on Eurozone GDP data and how Germany is in a cyclical decline, Artur Baluszynski, Head of Research at Henderson Rowe, said: “Global trade tensions and Brexit have now started feeding through to Eurozone GDP numbers and other lagging indicators. Its current account surplus of about 3% of gross domestic product makes it highly exposed to the global trade cycle, especially Germany which has a current account surplus of around 7% of GDP. Approximately 28% of Eurozone’s GDP goes outside of Europe. As per 2018 numbers, China is the eurozone’s third-largest goods export destination trading over €1 billion a day. German factory orders showed a month on month decline of 2.7% and this combined with recession-like PMI numbers from two weeks ago further confirms that Europe’s biggest economy is already in cyclical decline.
“The tricky thing about recessions and how financial markets and investors react to them is that we only know that it happened once we are already in one. We might already be in a global recession we just don’t know it yet.“