A decline in exports dampened the German economy, which shrunk by 0.1 percent in the second quarter of 2019.
“Germany is in terrible shape with negative GDP this week and with their expectations looking for another negative GDP in the third quarter, the Germans are going to be forced to open up their pockets and do fiscal stimulus,” NatAlliance global fixed income head Andy Brenner told FOX Business’ Liz Claman on Friday.
“In Europe, its crisis mode.”
Concerns over a recession have the German government reportedly under pressure to ditch its self-imposed balance budget, or Black Zero rule, and finance more fiscal stimulus with new debt. The country’s 10-year Bund yield, which hit an all-time record low earlier in the day, responded to the stimulus, bouncing up slightly.
“In Europe, its crisis mode,” Brenner said. “And even you had one of the European governors come out earlier this week and say they are going to give us a shock and awe on September 12.”
“I think that Europe is going to have a lot of hurt, and I don’t see a solution in the near term,” he said.