Monday ‘Green Shoots’ As Germany, Japan Deliver Upside Surprises On Key Data

If you’re looking for “green shoots” on Monday, you’re in luck.

First, German exports rose 1.2% MoM in October, well ahead of consensus, which had anticipated a 0.7% contraction. The range was -1.3% to 0.3%. YoY, exports were up 1.9%, thanks almost entirely to external demand (i.e., from outside the EU).

“After last week’s disappointing industrial data, this morning’s trade data brought some welcome relief for the economy”, ING’s Carsten Brzeski remarked. By that, he means factory orders and industrial production, which plunged the most in a decade in October.

“At the same time, the unexpected increase in exports is also a bit of a headscratcher”, Brzeski went on to say, noting that “it does not fit the more general picture of a continued global slowdown”. No, it does not.

In any case, the market will take whatever it can get at this point given that Germany is teetering on the brink of recession and there’s scant evidence to suggest a concerted fiscal push is in the cards, recent political tumult notwithstanding.

Meanwhile, Japan revised up a disappointing third quarter GDP print – and “bigly”. The economy expanded at an annualized pace of 1.8% during the period, versus the initial 0.2% read, the Cabinet Office said Monday. Analysts had been expecting a big revision (to 0.6%), but nothing of that magnitude.

This was due in no small part to capex, which was revised up to 7.3% QoQ or, more than double the initial estimate. Private consumption, meanwhile, was 2.2% in Q3 versus the original estimate of 1.4%.

Still, nobody should get too excited. After all, Q4 is going to be some stripe of bad thanks to the tax hike and the typhoon. Last week, the government announced a new stimulus package aimed at averting a recession.

As Shinzo Abe’s golf buddy Donald Trump would put it, “we’ll see what happens”.

Read more: Japan To Roll Out Stimulus Package Totaling 26 Trillion Yen

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