(eToro Blog) Preliminary data from the German Federal Statistics Office suggests that the Germany economy remains relatively resilient to the Eurozone’s debt woes, despite data points which suggest a weaker first quarter. According to the data released earlier today, Germany’s economy grew 3.0%, in line with the consensus call though off the 3.7% pace of a year ago.
The Statistics Office confirmed that the growth was driven primarily by the export sector, though strong consumer demand, at 1.5% growth for 2011 compared to 0.6% the previous year, gave the data a boost as well. With the fall in the German unemployment rate to 6.8% from 6.9%, the German economy will surely be relied upon to keep the peripheral economies afloat.
One strategist believes that the German economy will continue to improve, given the presence of several very strong, profitable companies, but that the Euro will remain weak, and be allowed to remain weak, deliberately, to ensure the existence of the Eurozone’s less robust economies which would suffer with a stronger Euro.
Germany’s relative economic success is clearly evident to investors, but more it translates into a safe investment; earlier this week, the Germany government sold €3.9 billion of 6-month bonds at an unprecedented negative yield of -0.0122%. Today’s auction of €3.153 billion worth of 5-year instruments saw high demand, with a bid-to-cover ratio of 2.8 and an average yield of 0.9%.
On the OpenBook platform, sentiment remains bearish for the EUR/USD pair, still close to the day’s low at 1.2699. Among the OpenBook gurus, trader pyruss earlier opened several short positions while closing to a profit several more. The European bourses have all pulled back from an earlier rally and are trading in the red as anxiety over the upcoming Spanish and Italian debt auctions prevails. The German DAX is lower by 0.65%, the London FTSE down by 0.62% and the French CAC-40 off by 0.46%.
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