Danske Research Team
Danske Bank A/S
- With the risk of a sudden Russian gas supply-stop still lurking in the background and a government that seems falling back into old fiscal habits, just at a time when the post-pandemic consumption boost is fading, Germany's economy is in for challenging times. We revise down our growth outlook, while expecting inflation pressures to linger for longer due to higher energy prices.
- To kickstart its growth prospects, Germany needs a Zeitenwende (paradigm shift) beyond foreign and security policy in our view. Accelerated investment spending on infrastructure, digitalisation and the green transition provide a silver lining, but until Europe's energy crisis is resolved, Germany is unlikely to return as the euro area's economic powerhouse anytime soon.
- A complete Russian gas cut-off would result in a recession lasting for several quarters, accompanied by rising unemployment and prolonged high inflation in our view. Government support could cushion the blow, however, ultimately the severity of the ensuing recession would depend on the duration of rationing and success in energy saving measures by consumers and firms.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
AUD/USD holds solid-Aussie jobs data-led gains above 0.6400
AUD/USD holds sizeable gains above 0.6400 early Thursday, capitalizing on stellar Australian jobs data, which pointed to a still resilient labour market and forced investors to scale back their bets for a rate cut by the RBA in February.
USD/JPY extends losses to near 152.00 amid risk-aversion, US Dollar retreat
USD/JPY drifts lower to near 152.00 in Thursday's Asian trading, snapping a three-day winning streak to a two-week high.The pair remains weighed down by a broad US Dollar pullback, risk-aversion and uncertainty around the BoJ rate hike next week. Focus shifts to US data.
Gold buyers take a breather ahead of US PPI inflation data
Gold's price seems to have paused its four-day recovery stint in Asian trading on Thursday after hitting fresh five-week highs near $2,725. Traders assess the odds of US Federal Reserve (Fed) interest rate cuts next year amid the ongoing upsurge in the US Treasury bond yields across curve.
Ripple's XRP could extend its rally to $4.75 after recent consolidation, rising profit-taking poses threat
Ripple's XRP continued its rally on Wednesday as it looks to test the upper boundary of a key flag channel. Following the recent price rise, investors booked profits worth nearly $800 million while options traders bet on the remittance-based token hitting the $5 mark.
BTC faces setback from Microsoft’s rejection
Bitcoin price hovers around $98,400 on Wednesday after declining 4.47% since Monday. Microsoft shareholders rejected the proposal to add Bitcoin to the company’s balance sheet on Tuesday.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.