German factory orders slump will give ECB more food for thought next week

Author: Justin Low | Category: News

German factory orders slumped to its weakest level since September 2016

Germany factory orders
ForexLive
The weak data earlier is putting a bit of a drag in the euro early in the session as EUR/USD holds just under 1.1020 currently. It once again raises more doubts about the German economy and begs the question, for how long more can Germany avoid a recession?

As factory/manufacturing activity continues to deteriorate, it's only a matter of time and we may already be in the midst of one already as Q3 growth appears to be not any better than the downturn experienced in Q2.

With the ECB meeting next week to introduce a fresh stimulus package, a lack of decisive easing measures may not necessarily be good news for the euro once markets realise that such efforts will not go a long way in bolstering economic conditions in the region.

That said, they can't also introduce QE without amending the issuer/purchase limits so policymakers may be facing a real problem here in having to try and shore up market confidence but at the same time lacking the right tools to do so.

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