The idea of German decoupling is bunkum

By Walter Kurtz, Sober Look

The concept of German decoupling from the Eurozone recession may have been wishful thinking. The latest German Manufacturing Purchasing Managers’ Index (PMI) has converged with that of the Eurozone as a whole. Manufacturing PMI is a closely watched index and tends to be a leading indicator for the GDP.

German (white) vs. Eurozone (orange) Manufacturing PMI ( Source: Bloomberg)

In response, Spain’s 5yr sovereign CDS hit a new record high of 511bp (previous high was 510 on 4/16). The Eurozone is headed for a double dip.

Spain 5yr sovereign CDS (Source: Bloomberg)

This post first appeared here: German decoupling may have been wishful thinking

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About Walter Kurtz

Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, banking, asset management, risk management, derivatives, global economy, policy, and regulation, with the emphasis on finance education.