Germany – Early Bird in full decline

The Early Bird fell from 20 points in November to 11 points in December. This is the second consecutive sharp decline in our leading indicator. The interim high in February 2025 is now a distant memory. One of the main reasons for this is the stronger euro. According to our estimates, the indicator of the German economy's price competitiveness – the real external value of a fictitious German Mark – was around 3% higher than a year ago. This makes German goods more expensive from the perspective of US consumers, for example. In addition, the economic mood in the global economy has deteriorated slightly. Monetary policy can hardly compensate for these deteriorations. This is because the ECB's interest rate cuts are increasingly in the past and their expansionary effect on the economy is now waning. As a result, all three components of our leading indicator are falling.

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