Germany – Early Bird keeps on rising

The Early Bird still only knows one direction: upwards! It rose again in November, by 8 points to 26 points. The main reason for this was once again monetary policy. The short-term real interest rate is now significantly lower than a year ago and it is likely to fall further in the coming months. As in previous months, the other two sub-components of our leading indicator have hardly moved. The global economic environment has improved slightly, as the rise in the ISM index for US manufacturing more than offset the decline in the respective PMI in the eurozone (excluding Germany). However, the sub-component for the global economy continues to signal a weak environment for German exports. Obviously, the interest rate cuts made by other central banks are not yet having a real impact. There is still little movement in the indicator of the price competitiveness of the German economy, the real external value of a notional Deutschmark, which remains at a similar level to a year ago.

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