Electricity Watch: Why Ze Germans are OK for now
We have so far seen a very contained market reaction to the electricity aid package from Germany last week, but there are loads of reasons why markets can absorb the demand-fuelling news in energy markets short-term. Maybe there is a window of opportunity for the German industry before price pressures return?
As per usual we deliver the conclusions upfront before getting to the details:
1) The IFO index covering the Germany industry is likely going to improve in the coming months
6) There is a window of opportunity for the EUR and German stocks short-term. We remain long Germany in our portfolio but await better fundamentals in the Nat Gas trade for now.
Chart 1: The ZEW details point to 5-10 index points higher IFO in the coming months