A steady stream of bad news on the German economy has helped drive the euro to a six-month low against the dollar and pushed European government bond yields to their lowest level in three months.
The closely-watched Ifo German business climate index dropped to a three-year low of 94.8 in August from 97.5. Meanwhile, the GfK index of consumer confidence in the eurozone’s most important economy fell to its lowest in five years falling for the third time in a row according to AFP. This has been a reliable lead indicator on the health of the German economy.
Detailed German GDP data were also published, which showed that consumption was very weak.
“All in all, the data suggests the marked slowdown of German growth registered in the second quarter was probably not a one-off,” said Martin Lück, economist at UBS.
But keep in mind that the largest names in the Germany's ETFs (EWG, DAX) are companies like Siemens (SI) which reflect opportunities for global growth rather than serving as a barometer for the German economy.
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