- German industrial new orders (March): down
- Output in the German producing sector (March): down
- German retail sales (March): down
- ECB: set to cut rates to 1.00%
German industrial new orders and output in the German producing sector will probably have continued decreasing in March, albeit at a slower pace again, because the correlated indicators deteriorated at diminishing rates or even improved. German retail sales are likely to have declined somewhat in March, as both retailers' business assessment and consumer confidence deteriorated.
Following the seasonal pattern, the German trade balance and current account could have improved in March. The Purchasing Managers' Indices for the German and EMU manufacturing sector in April are unlikely to be revised significantly.
Public comments display some dissent among ECB council members about the scope for further rate cuts. However, they do seem to agree about cutting the refinancing rate to 1% at the forthcoming meeting, on May 7. At the April press conference, ECB President Trichet announced a council decision about additional non-standard measures. We do not expect the ECB to engage in Fed-style quantitative easing. Taking into account the ECB's preoccupation with an "exit strategy", the council is likely to favour some form of QE "light": The ECB could lengthen the maturity of refinancing transactions beyond the current 6 months and/or make a longer term commitment to keep rates stable. It is less clear whether the ECB will actually decide to purchase private debt securities. At most, the central bank will start some limited activities in this area.
BHF-BANK http://www.bhf-bank.com
This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHFBANK Group") solely for the information of its clients.
The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results.
This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities.
