European markets in red as global economic worries weigh
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 21 2025
0mins
Should l Buy GF?
Source: SeekingAlpha
Market Overview: European markets experienced declines, with the Stoxx 600 down 0.45%, as investors reacted to global economic uncertainties and recent monetary policy updates from central banks, including the U.S. Federal Reserve.
Geopolitical Developments: The EU plans to significantly increase defense spending amid rising geopolitical tensions, while Germany's upper house is set to vote on a debt brake amendment that has already passed in the lower house.
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Analyst Views on GF
Wall Street analysts forecast GF stock price to rise
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Current: 11.140
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Current: 11.140
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About GF
The New Germany Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund seeks long-term capital appreciation primarily through investment in middle-market German equities. The focus of the Fund's investments lies within Germany. Under normal market conditions at least 80% of the Fund’s net assets are invested in equity or equity-linked securities. The Fund invests in range of sectors, which include aerospace and defense; auto components; automobiles; banks; building products; chemicals; electrical equipment; independent power and renewable electricity producers; insurance; Internet and direct marketing retail; information technology (IT) services, life sciences tools and services; metals and mining; real estate management and development; software; textiles, apparel and luxury goods; trading companies and distributors; diversified financial services; commercial services and supplies, and others. The Fund's investment advisor is DWS International GmbH.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
European Economic Data and Market Dynamics
- Czech Industrial Production Growth: In January, industrial production in the Czech Republic rose by 2.8% year-on-year, indicating resilience in the manufacturing sector, which could support economic recovery despite broader challenges in Europe.
- Retail Sales Increase: Retail sales in the Czech Republic increased by 5% year-on-year in January, suggesting strong consumer spending that may drive domestic economic growth and bolster market confidence.
- Finland's Trade Deficit Widening: Finland's trade deficit sharply widened to €0.55 billion in January, reflecting a faster growth in imports compared to exports, which could exert pressure on the national economy and necessitate future trade policy adjustments.
- Euro Depreciation Trend: The euro continues to decline against the dollar, nearing $1.15, reflecting market concerns about the eurozone's economic outlook, which may affect investor confidence and exacerbate capital outflows.
See More
EU Warns Iran Conflict Could Drive Inflation Above 3%
- Inflation Warning: EU economy chief Valdis Dombrovskis has warned that the ongoing conflict involving Iran could push eurozone inflation above 3% in 2026, primarily due to Brent oil prices hovering around $100 per barrel and elevated gas prices, which could negatively impact economic growth.
- Growth Slowdown: Should inflation rise as anticipated, economic growth in 2026 could be as much as 0.4 percentage points lower than the previously forecasted 1.4%, indicating that high inflation poses a threat to economic recovery and may compel policymakers to reassess economic outlooks.
- Rate Hike Expectations: As inflation rises, the European Central Bank may be forced to raise interest rates, with traders increasing bets on such a move later this year, although no immediate rate hike is expected in the upcoming policy decision on March 19.
- Market Impact: Dombrovskis also warned that the conflict could have broader negative effects on the economy through financial markets, trade, and supply chains, further exacerbating economic uncertainty and affecting investor confidence.
See More
Germany's Inflation Drops to 1.9% in February
- Inflation Decline: Germany's inflation rate fell to 1.9% in February, a decrease that could influence the European Central Bank's monetary policy decisions, potentially supporting economic recovery efforts.
- Market Volatility: European markets experienced a downturn, with the Stoxx 600 index dropping 0.72% amid increased uncertainty in the Middle East, indicating a cautious sentiment among investors regarding future market conditions.
- Energy Price Fluctuations: European natural gas futures rose above €48/MWh on Wednesday, although they retained most of the previous session's losses, as the IEA proposed the largest-ever release of oil reserves to combat rising energy prices, highlighting concerns over energy supply.
- Rising Bond Yields: The U.S. 10-year Treasury yield increased by 3 basis points to 4.16%, while Germany's and the UK's 10-year yields rose by 1 and 5 basis points respectively, reflecting changing market expectations regarding future interest rate movements.
See More
Positive European Economic Data, Germany Records Trade Surplus at 20-Month High
- Germany's Trade Surplus: Germany recorded a trade surplus in January, with exports reaching a 20-month high, indicating a robust economic recovery that could further boost growth in the Eurozone.
- France's Narrowing Trade Deficit: France's trade deficit narrowed in January, suggesting an improvement in its competitiveness in global markets, which may have positive implications for future fiscal policies.
- Sweden's Economic Data: Household spending in Sweden increased by 0.7% month-over-month in January, despite a 1.1% contraction in the economy for the same month, while industrial production rose by 1.9% year-over-year, demonstrating economic resilience.
- Positive Market Reaction: The pan-European Stoxx 600 index rose by 1.79%, reflecting market optimism over a potential resolution to the conflict with Iran, with all sectors performing well, particularly technology and financial stocks.
See More
Germany's Exports Surge to 20-Month High
- Significant Export Growth: Germany's exports reached €133.3 billion in December 2025, marking a 4.0% month-over-month increase and hitting a 20-month high, significantly surpassing the forecasted 1.0% growth, indicating a robust economic recovery.
- Strong Import Performance: Imports also rose by 1.4% month-over-month to €116.1 billion, exceeding market expectations of 0.2% and accelerating from a slightly revised 0.7% gain in the previous month, reflecting a rebound in domestic demand.
- Widening Trade Surplus: In January 2026, Germany recorded a trade surplus of €21.20 billion, surpassing the consensus estimate of €15.2 billion, showcasing strong export performance and stable imports, which support economic growth.
- Economic Growth Slowdown: Despite the positive export and import figures, the Eurozone economy grew only 0.2% in Q4 2025, highlighting challenges in the overall economic environment that may impact future trade performance.
See More
Global Markets Slide as Oil Prices Surge to Four-Year High
- Pound Decline: The British pound fell to a three-month low of $1.33 on Monday, extending last week's losses, primarily driven by a stronger US dollar and political pressures in the UK, which may lead to decreased investor confidence.
- German Factory Orders Plummet: Germany's factory orders slumped 11.1% month-over-month in January, far worse than the market's expectation of a 4.3% decline, indicating signs of economic slowdown that could impact future production and employment.
- Oil Price Surge: Oil prices surged past $100 a barrel for the first time since 2022 due to major Middle Eastern producers curtailing output, potentially exacerbating global inflationary pressures and affecting economic growth outlooks.
- Increased Market Volatility: The volatility index (VIX) jumped to 34.40, the highest level seen in about 11 months, reflecting market concerns over escalating Middle East conflicts and their potential impact on global economic conditions, prompting investors to reassess interest rate outlooks.
See More
European Economic Data and Market Dynamics
- Czech Industrial Production Growth: In January, industrial production in the Czech Republic rose by 2.8% year-on-year, indicating resilience in the manufacturing sector, which could support economic recovery despite broader challenges in Europe.
- Retail Sales Increase: Retail sales in the Czech Republic increased by 5% year-on-year in January, suggesting strong consumer spending that may drive domestic economic growth and bolster market confidence.
- Finland's Trade Deficit Widening: Finland's trade deficit sharply widened to €0.55 billion in January, reflecting a faster growth in imports compared to exports, which could exert pressure on the national economy and necessitate future trade policy adjustments.
- Euro Depreciation Trend: The euro continues to decline against the dollar, nearing $1.15, reflecting market concerns about the eurozone's economic outlook, which may affect investor confidence and exacerbate capital outflows.
See More
EU Warns Iran Conflict Could Drive Inflation Above 3%
- Inflation Warning: EU economy chief Valdis Dombrovskis has warned that the ongoing conflict involving Iran could push eurozone inflation above 3% in 2026, primarily due to Brent oil prices hovering around $100 per barrel and elevated gas prices, which could negatively impact economic growth.
- Growth Slowdown: Should inflation rise as anticipated, economic growth in 2026 could be as much as 0.4 percentage points lower than the previously forecasted 1.4%, indicating that high inflation poses a threat to economic recovery and may compel policymakers to reassess economic outlooks.
- Rate Hike Expectations: As inflation rises, the European Central Bank may be forced to raise interest rates, with traders increasing bets on such a move later this year, although no immediate rate hike is expected in the upcoming policy decision on March 19.
- Market Impact: Dombrovskis also warned that the conflict could have broader negative effects on the economy through financial markets, trade, and supply chains, further exacerbating economic uncertainty and affecting investor confidence.
See More
Germany's Inflation Drops to 1.9% in February
- Inflation Decline: Germany's inflation rate fell to 1.9% in February, a decrease that could influence the European Central Bank's monetary policy decisions, potentially supporting economic recovery efforts.
- Market Volatility: European markets experienced a downturn, with the Stoxx 600 index dropping 0.72% amid increased uncertainty in the Middle East, indicating a cautious sentiment among investors regarding future market conditions.
- Energy Price Fluctuations: European natural gas futures rose above €48/MWh on Wednesday, although they retained most of the previous session's losses, as the IEA proposed the largest-ever release of oil reserves to combat rising energy prices, highlighting concerns over energy supply.
- Rising Bond Yields: The U.S. 10-year Treasury yield increased by 3 basis points to 4.16%, while Germany's and the UK's 10-year yields rose by 1 and 5 basis points respectively, reflecting changing market expectations regarding future interest rate movements.
See More
Positive European Economic Data, Germany Records Trade Surplus at 20-Month High
- Germany's Trade Surplus: Germany recorded a trade surplus in January, with exports reaching a 20-month high, indicating a robust economic recovery that could further boost growth in the Eurozone.
- France's Narrowing Trade Deficit: France's trade deficit narrowed in January, suggesting an improvement in its competitiveness in global markets, which may have positive implications for future fiscal policies.
- Sweden's Economic Data: Household spending in Sweden increased by 0.7% month-over-month in January, despite a 1.1% contraction in the economy for the same month, while industrial production rose by 1.9% year-over-year, demonstrating economic resilience.
- Positive Market Reaction: The pan-European Stoxx 600 index rose by 1.79%, reflecting market optimism over a potential resolution to the conflict with Iran, with all sectors performing well, particularly technology and financial stocks.
See More
Germany's Exports Surge to 20-Month High
- Significant Export Growth: Germany's exports reached €133.3 billion in December 2025, marking a 4.0% month-over-month increase and hitting a 20-month high, significantly surpassing the forecasted 1.0% growth, indicating a robust economic recovery.
- Strong Import Performance: Imports also rose by 1.4% month-over-month to €116.1 billion, exceeding market expectations of 0.2% and accelerating from a slightly revised 0.7% gain in the previous month, reflecting a rebound in domestic demand.
- Widening Trade Surplus: In January 2026, Germany recorded a trade surplus of €21.20 billion, surpassing the consensus estimate of €15.2 billion, showcasing strong export performance and stable imports, which support economic growth.
- Economic Growth Slowdown: Despite the positive export and import figures, the Eurozone economy grew only 0.2% in Q4 2025, highlighting challenges in the overall economic environment that may impact future trade performance.
See More
Global Markets Slide as Oil Prices Surge to Four-Year High
- Pound Decline: The British pound fell to a three-month low of $1.33 on Monday, extending last week's losses, primarily driven by a stronger US dollar and political pressures in the UK, which may lead to decreased investor confidence.
- German Factory Orders Plummet: Germany's factory orders slumped 11.1% month-over-month in January, far worse than the market's expectation of a 4.3% decline, indicating signs of economic slowdown that could impact future production and employment.
- Oil Price Surge: Oil prices surged past $100 a barrel for the first time since 2022 due to major Middle Eastern producers curtailing output, potentially exacerbating global inflationary pressures and affecting economic growth outlooks.
- Increased Market Volatility: The volatility index (VIX) jumped to 34.40, the highest level seen in about 11 months, reflecting market concerns over escalating Middle East conflicts and their potential impact on global economic conditions, prompting investors to reassess interest rate outlooks.
See More
