FOREX: Aussie Outperforming, EURAUD Approaches Bear Trigger

For an updated full view of private sector consensus on German economic indicators see below. Again, momentum to generally pick up over the coming quarters.

• Growth estimates for 2025 and 2026 stand at 0.3% Y/Y and 1.0% Y/Y, respectively. This would mean an end to the two-year contraction period which just passed, and does represent an improvement in sentiment over views for a potential third consecutive year of negative growth present ahead of the German fiscal stimulus announcement.
• For comparison, the German government continues to be more pessimistic than this, seeing flat real GDP (0.0% Y/Y) this year ahead of "around 1%" in 2026 in their forecast published late April. Note that this was before the current government took over in the economy ministry, which is responsible for the forecast. IFO institute meanwhile sees a stronger 0.3% in 2025 and 1.5% in 2026, citing "numerous indicators suggest that the crisis in the German economy reached its low point in the winter half-year 2024/2025" back in June.

Revisions to consensus on German GDP during the last months swayed towards growth being a bit more pronounced on a Y/Y basis in the coming quarters than seen previously. The chart below shows growth estimates (from seven primary dealer analysts via Bloomberg) for Q3 / Q426 stand higher than where they were one (and also three) months ago. Growth then continues to be expected to pick up towards 2026, with a similar pace as before.

• However, note that these forecast updates came after the Q2 Destatis GDP print seeing an inline Q/Q reading (of -0.1%) but a higher-than-expected Y/Y print (of 0.4% vs 0.2% cons) amid some partially notable revisions of the prior GDP data. This may well have had an influence on analysts' projections for the quarters ahead.
• From a fundamental perspective, the analyst updates came following the US-EU trade deal, finance minister Klingbeil's presentation of the 2026 budget (amid his updated financial plan for 2027-29, recap here) as well as the reveal of the details of a private sector investment initiative in Germany.
• Revisions for both private investment and government spending in Germany appear materially unchanged over the last month (a contained pick-up of the private investment near-term f'cast stands out to some degree - now seen at 1.1% Y/Y in Q325). Net exports meanwhile are seen a little lower in the short term than before.
• Elsewhere, RBC today has published a report on fiscal stimulus in Germany, finding that "a high share of additional spending is going to go on 'high multiplier'" items - leading to their conclusion that "what we do know looks very promising for German growth" at least for 2025 and 2026. Beyond that, they see the effects to fade, though.

The premium of the first COMEX Gold future over London spot has been mostly erased, currently at ~$6 after peaking at over $50 on Friday. A White House official told Bloomberg late Friday that the administration would issue an executive order clarifying gold tariffs in “the near future”. 

• The driver of the COMEX future/London spot widening on Friday was an FT report suggesting US imports of gold bars from Switzerland would be subject to the recently announced 39% tariffs, potentially hampering (or at least making more expensive) the supply of physical gold into the US.
• This morning, spot prices are down over 1% to $3,358, with the first COMEX future down 2.2% at $3,364.
• A thawing in tensions between Russia and the West ahead of Friday’s Trump-Putin meeting in Alaska may be weighing on Gold this morning, even as the reported conditions for a ceasefire agreement appear untenable to European leaders and Ukraine.
• The bull cycle in spot gold that started Jun 30 remains intact, with initial support not seen till $3,268 (Jul 30 low). More broadly, spot remains comfortable within the $3,250 to $3,450 range which has contained price action since the start of June. 

Figure 1: First COMEX Gold Future vs London Spot Spread (Source: Bloomberg Finance L.P)