The 5% annual growth rate of the German economy was predetermined. American Treasuries continue to rise

The recession in the German economy was not as strong as it was possible, according to initial estimates. A preliminary assessment by the statistical office showed that production fell by 5% amid repeated social constraints. The government's budget deficit was 4.8% of gross domestic product, the largest since 1995.

The final calculation can show even better numbers, because the data for the fourth quarter of last year, which have been expected this month, might be optimistic. Retail sales and industrial activity were surprisingly strong at the end of last year, suggesting that the economy may have recorded modest growth in the past three months.

The beginning of the year may be stagnant. Tightening restrictions put pressure on business again. However, the Bundesbank remains optimistic that Germany's recovery will continue from the second quarter. Amid growing economic confidence across the euro area, European Central Bank President Christine Lagarde also expressed confidence in recovering the currency bloc economy this year.

These factors support the stock market, which continues to be traded near the highs. The announcement of additional economic assistance to the US economy from the government was another positive news. Joe Biden's cabinet is planning to release about $2 trillion to stimulate.

Against this background, American Treasuries returned to growth and stabilized around 1.100%. Small-cap US Russell 2000 futures were the top gainers, while the Nasdaq tech sector fared slightly worse. In Europe, the Stoxx 600 Index rallied, with tech, bank, and automaker stocks leading the way.

Main market quotes:

S&P 500 (F) 3,812.62 +8.87 (+0.23%)

Dow Jones 31,060.47 -8.22 (-0.03%)

DAX 14,013.95 +74.24 (+0.53%)

FTSE 100 6,790.36 +44.84 (+0.66%)

USD Index 90.255 -0.079 (-0.09%)

• – 10:00 (GMT+2) German GDP (q/q);
• – 15:30 (GMT+2) Statement on the monetary policy of the ECB;
• – 16:30 (GMT+2) The number of initial applications for unemployment benefits in the United States.

by JMarkets, 2021.01.14

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.