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German trade disappoints, but ECB cheers markets

Friday, December 09, 2016 - 01:49

German exports are struggling to rebound in an uncertain global market, according to new data. But the euro steadies after seeing the biggest fall since the UK's Brexit vote on the ECB's decision to extend its money-printing programme, while stocks make strong gains on the decision. David Pollard reports.

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Germany's car industry - the shop window for Europe's most powerful exporter - but where the shop isn't selling quite as much as before. Exports have near stagnated in recent months - and recovered less than expected in October - a 0.5 per cent rise much weaker than forecast. Imports were up 1.3 per cent - beating expectations. And narrowing Germany's trade surplus to 20.5 billion euros. Even so, Germany still seen as robust - thanks to the single currency. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Clearly the ECB's announcement yesterday that it was going to extend quantitative easing, that weakened the euro. Again, should be a beneficiary for Germany. I don't see any problems with that economy." The ECB decision drove the euro to its biggest daily loss against the dollar since Britain's vote to leave the European Union in June - a drop of over two per cent. It wasn't only the economy weighing on the ECB's thinking. (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "Just look at the election calendar for the year to come ... Look at the rest of the world. Look at what is happening with the emerging market economies... So there is a big uncertainty, much of which is political ...." Markets caught unawares as Mario Draghi extended QE for longer than expected - but with asset purchases set at 60 billion euros a month instead of the current 80. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "It's a considerable amount of quantitative easing. It continues to provide very accommodative credit conditions. It should keep downward pressure on the euro against its major trading currencies. I think therefore it was the right decision." Europe's stock markets think so too - those touching their highest levels in 11 months - and heading towards their best week since February - on the promise of another wave of monetary stimulus.

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German trade disappoints, but ECB cheers markets

Friday, December 09, 2016 - 01:49