GERMANY

摘要

Following a solid contribution towards Q1's impressive 0.7% (q-o-q) GDP expansion, industrial production has slowed so far in Q2 on signs of negative knock-on effects from uncertainty in the global economy. Production in May fell by 1.3% (m-o-m) after a downwardly revised 0.5% increase in April, as capital goodsoutput declined by 3.9%. Our industrial production forecasts have dipped this month, as have those for GDP. The effects of the UK's decision to leave the EU may hinge on future access to the single market. According to Destatis, the UK was Germany's third biggest export market in 2015 and a lucrative destination for German car makers. Total auto sales climbed by 7% (y-o-y) in the first six months of this year, with exports rising by 2%. Demand within Europe and China remains key, although domestic spending has been robust. The Gf K consumer sentiment indicator (conducted before the UK vote) hit its highest level in almost a year in June, supported by higher income expectations and rising employment. Cheap borrowing and low inflation have also driven retail sales, which advanced by 2% (y-o-y) between January and May. Concerns over the global outlook have been illustrated by tumbling yields (below 0%) on German 10-year bonds, as they are often regarded as a safe haven for investors against financial market volatility.