German economy shows chinks in its armor

As no one is immune to the travails of debt troubled sovereign nations in Europe, the slowdown in Asia and Latin America and mediocre growth in the US, Germany’s economic stats today showed chinks in its armor. The May German IFO business confidence # fell 3 pts to a 6 month low and was 2.5 pts less than expected. Also, German mfr’g PMI fell to 45, the lowest since June ’09 and this led to the euro zone mfr’g and services composite index to drop also to the weakest since June ’09. French mfr’g PMI fell to 44.4 from 46.9 and business confidence dropped 2 pts to a 3 month low. The UK economy was confirmed to be in an official recession as Q1 GDP was not revised up to a positive reading but was instead revised lower to an even weaker one. On the heels of a non event EU summit and just weeks before another Greek election, every comment from an ECB member will be parsed. ECB member Nowotny this morning said a Greek exit will be a mess but also said “a good central bank is ready for everything” and the “ECB hasn’t used its full arsenal.” In Asia, China’s HSBC flash mfr’g PMI for May fell .6 pts to 48.7, the 7th month in a row below 50.

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