No end to uncertainty yet

Uncertainty remains the determining factor for the economy and financial markets. The Brexit and the US-Chinese trade dispute, two of the most important political issues, may have come closer to a solution in the last few days. However, it is not yet clear where the journey is heading.

As for the week ahead, important economic data is expected from both sides of the Atlantic. Economic growth in both the euro zone and the United States is likely to have slowed again in the third quarter. Investment in particular is suffering from continued uncertainty, while companies remain cautious in the face of a lack of clarity regarding future prospects.

Growth in the euro zone is likely to have been considerably weaker than in the USA, and between July and September it was only just above zero. Industry in particular is suffering as a result of the international pressures. This is particularly evident in Germany, where the manufacturing sector is of above-average importance for the economy as a whole and specializes in the production of capital goods for the export market.

The US economy is also moving more slowly, and the continued uncertainty has prompted the central bank to lower its key interest rate twice this year. At next week's meeting, a further rate cut could be made - despite the still solid fundamentals.


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