In the latest confirmation that the Brexit "doom and gloom" scenarios proposed by experts are unlikely to materialize, moments ago in the latest monthly report from the German Bundesbank, even if they did provide a great excuse for the BOE to resume QE and to buy corporate bonds at the same time, the central bank said that the German economy should expand during summer in line with strong underlying economic trend, while saying that the consequences from Brexit will be limited, at least in the short term.
Some of the highlights via BBG:
- Despite weak orders in 2Q, sentiment in German industry has noticeably improved
- Brexit impact on expectations by German companies has been mild so far; supports view that economic consequences in Germany will be limited, at least in short term
- Positive company expectations for export activities support solid export growth in 3Q; manufacturing will contribute more strongly to economic growth
- Bundesbank sees higher investment in equipment and machinery due to above-average capacity utilization
- Construction investment also to pick up in 3Q
- Private consumption could drive domestic growth on favorable outlook for wages and jobs, and on oil prices
The full report can be read here and is reproduced below.