That’s A Record Plunge In German Investor Confidence For Anyone Keeping Score

German investor confidence plunged in March as the coronavirus epidemic and associated declines in equity prices weighed heavily on already fragile sentiment.

The expectations gauge plummeted to -49.5 from 8.7 in February, an unprecedented drop, and the lowest reading since the dark days of the European debt crisis.

The current conditions gauge printed -43.1.

Like the rest of Europe, Germany is implementing draconian social distancing measures in a bid to contain the spread of the virus.

“There shouldn’t be any holiday trips undertaken inside the country or outside it”, Angela Merkel said Monday, at a press conference in Berlin. “There have never been measures like this in our country before. They are far-reaching, but at the moment they are necessary”.

President Frank-Walter Steinmeier had a simple message for Germans: “So wherever possible: stay at home! Avoid close contact and have understanding for all restrictive measures”.

ING summed it all up:

The situation is Germany is fast-moving. Chancellor Angela Merkel announced the so-called general guidelines for a lockdown of Germany. All shops will be closed except for groceries, pharmacies, banks and gas stations. No more gatherings, no touristic travels, neither domestically nor internationally, no church services and even playgrounds should be closed. Cultural and sport events are also no longer allowed. Restaurants can stay open, but only until 6pm.

Border checks are in place with Austria, France, Switzerland, Luxembourg and Denmark. If you don’t have a good reason to come into Germany, you’re not coming in, apparently.

“With the lockdown, there will be a sharp fall in private consumption to at least 4% compared with the levels at the end of last year”, ING remarked, in an e-mailed note. “In our view, the German economy is likely to experience a recession in the first half of the year, in terms of the plain GDP data probably getting close to numbers seen during the financial crisis”.

The German economy came into 2020 hobbled by the trade war and laboring under the worst industrial slump in recent memory.

Pressure on the government to loosen the purse strings and otherwise deploy federal funds to curb the crisis is now unrelenting. On Friday, German Finance Minister Olaf Scholz and Economy Minister Peter Altmaier teased a “bazooka”, but some of their statements were seen as ambiguous, even as their pronouncements were full of superlatives and nebulous pledges.

Scholz’s remarks – which included a €550 billion pseudo-pledge – prompted the biggest selloff in German 30-year debt in a decade.

That was a preview of what you can expect when (or if) the world’s most important nations finally unveil serious fiscal measures, but suffice to say that when it comes to fiscal stimulus from Germany, markets will believe it when they see it.

Read more: Germany Teases ‘Unlimited’ Economic Support

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