Italy's 10y risk spread over Germany rose >2OObps, for the 1st time since March w/Italy 10y yield on course to 5%
Source: HolgerZ, Bloomberg
HAVE YOU EVER HEARD ABOUT DE-EUROIZATION ?
Based on SWIFT international payments, we are witnessing 'de-euroization' and not 'dedollarization. The euro's share in SWIFT global payments has dropped to 23% from 38% at the start of the year. Are Russia's SPFS and China's CIPS eating up the euro? Meanwhile, China's share in SWIFT payments reached an all-time high of 3.47% in August. Source: HolgerZ, Bloomberg
Sentiment among consumers in Germany keeps deteriorating as persistently high inflation encourages people to save & blots out chances of a recovery before year-end
GfK German Consumer Sentiment Index drops to -26.5 in Oct from -25.6 in Sep. An indicator BELOW 0 signals YoY contraction in private consumption. Source: HolgerZ, Bloomberg
The business outlook in Germany has improved slightly amid a shrinking economy
Source: Bespoke
In case you missed it: German PPI deflation deepened w/PPI down 12,6%, most since the start of the statistic in 1949
Source: HolgerZ, Bloomberg
Some interresting comments by Themacrocompass.com / Alfonso Peccatiello
on yesterday's ECB hike and Lagarde's comments: "The demand for corporate loans in Europe has plummeted as borrowing costs remain prohibitively high. The Eurozone credit creation process is quite reliant on bank lending, so this matters. And indeed markets aren't reacting as if the ECB just hiked - quite the opposite: bond yields have moved lower and the EUR has taken another dip. The risks of an ECB policy mistake keep growing".
While Germany is deindustrializing US construction spending on manufacturing is going thru the roof. Viel glück Deutschland...
Source: Michael A. Arouet
German builders warn of crisis as they scrap record number of projects
According to a FT article, cancelled building projects and financial distress among landlords and builders in Germany have hit their highest levels since reunification three decades ago, intensifying the construction crisis in the EU’s biggest economy. Hit by rising interest rates, soaring costs and weaker demand, 20.7 per cent of construction companies said they had been forced to scrap a project in August, up from 18.9 per cent in the previous month, according to a survey of 500 businesses by researchers at the Ifo Institute in Munich. Source: https://lnkd.in/etkDryVY
