German GfK Consumer Climate Index Jumps but Recession Fears Intensify
The ECB faces a delicate balance, with improved consumer confidence potentially reducing rate-cut expectations, but recession fears maintaining pressure for accommodative policies. Uncertainty about December’s ECB interest rate decision is evident as markets give a 50% chance of a 50 bps December rate cut.
Expert Views on the German Economy and ECB Rate Path
Pictet Wealth Management Head of Macroeconomic Research Fred Ducrozet commented on the German economy and the need for further ECB policy support, stating,
“The nail in the coffin? Job cuts deepen in Germany, and pricing power wanes. The ECB will be under growing pressure to move below neutral, and fast.”
Oliver Rakau, Chief Germany Economist at Oxford Economics remarked on October’s PMI data, stating,
“The PMIs’ GDP signal hasn’t been too accurate lately, but what really should concern the ECB is the price and employment signals from today’s October PMIs. Will they go big in Dec? Odds are rising. Should they go big? Yes, surely. And drop this “sticky” nonsense narrative.”
EUR/USD Reaction to German GfK Consumer Climate Survey
Before the German GfK Consumer Climate report, the EUR/USD climbed to a high of $1.08190 before falling to a pre-report low of $1.08057.
However, EUR/USD reacted to the GfK Consumer Confidence report, the EUR/USD rose to a high of $1.08128 before falling to a low of $1.08052.
On Tuesday, October 29, the EUR/USD was down 0.02% to $1.08098.
This article was originally published by a www.fxempire.com
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