German decoupling is an illusion
By Sober Look
The concept of German decoupling from the Eurozone recession may have been wishful thinking. The latest German Manufacturing Purchasing Managers’ Index (PMI) has converged with that of the Eurozone as a whole. Manufacturing PMI is a closely watched index and tends to be a leading indicator for the GDP.
In response, Spain’s 5yr sovereign CDS hit a new record high of 511bp (previous high was 510 on 4/16). The Eurozone is headed for a double dip.
Editor’s note: This post first appeared on Sober Look’s website.
For more at Credit Writedowns predicting a double dip in the Euro Zone because of austerity, see January’s "Germany is in recession already with the rest of the euro zone". But also see October’s "Is Europe Sliding Into a Double-Dip Recession?" and March 2010’s "Spain’s debt woes and Germany’s intransigence lead to double dip", where it is all explained.