This website uses cookies in order to improve user experience. If you close this box or continue browsing, we will assume that you are happy with this. For more information about the cookies we use or to find out how you can disable cookies, see our Cookies Notice.

Chart of the week

For now, politics is largely irrelevant

Why have financial markets been so unimpressed by the impasse of coalition talks in Germany? Both on Monday, after talks on forming a new government have collapsed, and over the past week, the German equity market has been broadly flat overall. One reason is the heavy weighting of German exporters, not just in its blue-chip Dax companies, but among midcaps too. Another is that the political consequences might not be all that large, as we pointed out in our CIO Flash on November 20th . A third reason, and a very revealing one, is depicted in our "Chart of the Week". Recent growth in Germany's gross domestic product (GDP) is roughly in line with historic averages. Over the past two years, however, the main drivers have changed dramatically. In particular, both consumption growth and long dormant construction activity have accelerated sharply. Meanwhile, exports have slowed down. That makes German GDP growth a lot more balanced and, one would hope, sustainable. For the first time in more than 20 years, Europe's leading economy is starting to fire on of all cylinders. It currently looks solid enough to withstand the odd political setback.

Sources: Bloomberg Finance L.P., Deutsche Asset Management Investment GmbH, as of 11/24/17

Related Articles

Jul 16, 2018 New Americas CIO View

Americas CIO View

How much Value is to be found abroad?

Jul 13, 2018 New Chart of the week

Chart of the week

China's monetary base looks set to grow faster again soon

Jul 06, 2018 Chart of the week

Chart of the week

On trade, the Trump administration might have some powerful allies.

Jul 03, 2018 Investment Traffic Lights

Investment Traffic Lights

Our tactical and strategic view

Jul 03, 2018 CIO Special

Dollar pros and cons

The dollar has already reached our target. Currently, the arguments are balanced.

Jun 29, 2018 Chart of the week

Chart of the week

Do weak currencies hurt emerging markets?

Jun 22, 2018 Chart of the week

Chart of the week

In the line of fire

Jun 21, 2018 Macro Outlook

Ten years after

The long reach of the financial crisis

Jun 15, 2018 Americas CIO View

Americas CIO View

Inflation: Sometimes it skips a generation

Jun 15, 2018 Chart of the week

Chart of the Week

Looking at real federal funds rates, not a lot has happened after 7 hikes

Jun 08, 2018 Americas CIO View

Americas CIO View

Is it time for U.S. Small Caps to shine? If you pick them right

Jun 08, 2018 Chart of the week

Chart of the week

In some areas, Italy is actually doing quite well

Jun 04, 2018 Investment Traffic Lights

Investment Traffic Lights

Our tactical and strategic view

Jun 01, 2018 Chart of the week

Chart of the Week

Why emerging markets may be less vulnerable than they used to be

May 29, 2018 CIO Flash

Euro crisis 2.0?

Italy's political woes are dragging down markets while boosting our dollar call.

May 29, 2018 Americas CIO View

Americas CIO View

What do investors want from active managers?

May 25, 2018 Chart of the week

Chart of the week

A tale of two economies in the Eurozone periphery

May 24, 2018 CIO Flash

Italy's new coalition

Italian political turmoil might prove less worrisome than many think.

Feedback

Please let us know what you think about this article/page.