GERMANY: IFO Sees 0.3pp GDP Growth Hit In 2025 From US Tariffs
Apr-03 12:24
IFO estimates yesterday's US reciprocal tariff announcements could reduce German 2025 real GDP growth by 0.3pp according to preliminary calculations. That could push overall growth negative again this year in Germany, with its original baseline of +0.2% Y/Y for 2025.
- According to the IFO estimate, the German economy is suffering in three ways: firstly, because Germany can export less to the USA. Secondly, because Germany can export less to China due to China's lower competitiveness. Thirdly, because countries such as China will then have to switch more to other export markets, putting German companies under additional pressure.
- They projected yesterday that if US tariffs were "reciprocal" according to IFO's own calculation it would have had a rather minor effect on the German economy as they saw the difference between average tariff rates in between the EU and the US at just 0.5 percentage points.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Core Bonds recover from the lows
Mar-04 12:24
- Continued two way flows in Core Govies, and some notable buying as futures recover higher, TYM5 is bought in over 12k, Bund and Bobl in over 6k respectivelly.
- The Initial support noted in Bund at 132.13 did held, printed a 132.13 low.
- Bobl spread, OEH5/M5 is sold at -103 in ~29k.
OUTLOOK: Price Signal Summary - Gilts Remain Above Support
Mar-04 12:22
- In the FI space, Bund futures on Monday pulled back from their recent highs and the contract remains below last week’s peak. The move down undermines a recent bullish theme. A continuation lower would expose the next key support at 131.26, the Feb 19 low. Clearance of this level would be viewed as an important short-term technical break. Two important resistance points remain intact for now; 133.46, the Feb 28 high, and 133.71, the Feb 5 high.
- A bull cycle in Gilt futures remains intact - for now. The contract has recently traded higher and this highlighted scope for a test of resistance at 93.39, the Feb 13 high. It has been pierced, a clear break of it would open 93.83, the high on Feb 6 and a bull trigger. On the downside, key short-term support has been defined at 91.79, Feb 20 low. Clearance of this level would highlight a bear threat. First support lies at 92.57, the Mar 3 low.
FED FUNDS FUTURES: BLOCK: May'25 FF Sale
Mar-04 12:17
- -10,000 FFK5 95.775, sell through 95.78 post time bid at 0708:57ET. The May contract trades 95.785 last (+0.030)
