Market Overview

EUR Unglued By Ugly GDP Assault

A reading of global GDP reports has revealed another litany of woes. Contraction is no longer a vulgar economic word. It seems to be a staple amongst the maturing or cyclical economies defined under economics 101. The emerging economies, or new world order, are currently not in the same position to reproduce such damaging data. They are not the countries actively guiding or cajoling their currencies to underperforming levels. The claustrophobic growth squeeze remains healthy amongst the G7.

Abenomics has not arrived, but for Japan's sake it hopes it comes soon. The prolonging of Japan's recession into a third quarter shows that benefits from a weaker yen and rising stocks have yet to be felt. The country's GDP contracted -0.1% in Q4, following an aggressive -1% fall in Q3, weaker than consensus expectations for a modest +0.1% rise. Perhaps painting an even damaging picture was exports falling -3.7%, q/q and hot on the heels of a -5.1% fall in Q3.

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