German exports have increased owing to weakness in the euro, which yesterday dropped against all of its major currency counterparts.
After disappointment that nothing new had emerged from the EU Summit to solve the eurozone crisis, the euro was sold off against safe havens and high yielding currencies alike, noted Clear Currency.
German export figures showed one piece of positive news: they had risen 1.7% in the first quarter, year-on-year, benefiting from the added competitiveness brought on by the weaker euro.
Meanwhile, Baring Asset Management noted yesterday that German economic growth in the first quarter of the year recently came in at the same figure – 1.7%. This was significantly ahead of expectations and was thanks in large part to the robust export growth.
Although it has been one of the best performing European stock markets of the past few years, Germany has seen a sell-off in recent weeks along with other markets in Europe.
But the positive glimmer from Germany cannot mask the increasing turmoil in the rest of Europe.
John R. Taylor, Jr, chief investment officer at FX Concepts, this morning repeated his call for Greece to exit the eurozone, for its sake, and for the eurozone’s sake.
All markets are becoming domestic again, he said. Spanish bonds are only purchased by Spanish banks, corporations, and individuals, while foreign investors are divesting their Spanish assets or pledging them to the ECB.
“Soon Spain will have no financial connection to the rest of the Eurozone.”
He added that now that money from the long-term refinancing operation seems to have been spent by each country’s domestic banks, the source of future debt buyers is extremely uncertain.
“Getting the Germans, the Swiss and the Americans back into the market for Spanish and Italian debt is critical,” said Taylor.
©2012 funds europe
