Germany

The German economy, and by extension, the euro zone economy as well, appears to have lost momentum in Q4 09. Last week’s data for Germany included news of a 1.1% fall in Nov retail sales. The market had expected a 0.3% rise. Factory orders for that month fell 0.2%. The consensus had been for a 1.5% increase. The wider trade surplus was a small reflection of exports (+1.3%), but really do more to a slide in imports (-5.9%), which would also suggest poor domestic demand. The euro zone manufacturing PMI did rise to 51.6 from 5.1, but consider that it rose 2.3 point since Q4 after 6.7 points in Q3 and 8.7 points in Q2. The service sector PMI also shows a loss of momentum in Q4. The region’s industrial orders fell 2.2% in Oct, offsetting in full the Aug and Sept increase.