European markets are trading lower this morning after the German industry output data printed another dreadful reading. Although, anyone could have predicted this fall in the number after a weak manufacturing reading which we received yesterday. Traders have completely lost the memory of the robust US non farm payroll number and the focus is back on the European growth which is causing a sell off in the markets. Perhaps, it is safe to say that feel good factor among them has completely lost its lustre.
The slowdown in today’s economic data’s reading could easily be blamed on the number of factors such Russian sanctions, slow down in China and a weak demand in Europe. The irony is that we do not see any solution in place yet for any of these problems and this could make things worse for the Eurozone and for the euro. However, a continues weakness in the euro should help its export in the coming days.
The slow down in economic growth and its spill over effects can be also be seen in the neighbouring country, the United Kingdom, where the economy is catching a little chill and cold winds of economic growth are on its shores. The manufacturing and industrial data due later today is expected to show another weak number today.
Back in the US, it is all about the Fed and their speeches this week after the concrete US non farm reading. The speculations will keep on building when the Fed will increase their interest rate once they have winded up their QE program. A clear message could obviously help the market but when we have a mix message from different members, it creates unnecessary volatility in the markets.