• The Germany economy is enduring a moment of flux as it tries to shake off the coronavirus crisis.
• In the United States, investors will be watching April data on personal spending.
• Chinas central bank said Sunday it will maintain the exchange rate of the yuan at “basically stable” levels.

The Germany economy is enduring a moment of flux as it tries to shake off the coronavirus crisis, just as the era of Chancellor Angela Merkel draws to a close.

In just four months on Wednesday, voters will choose a new government in an election that augurs a turning point as she leaves a political void after 13 years in office – accompanied by a sense of unfinished business in retooling the continent’s growth engine.

The task that will now pass to Merkel’s successor, who must confront the challenge of how to re-engineer Europe’s biggest economy and reap the opportunities of the post-crisis world, without losing its edge.

While the pandemic may be a catalyst for change, the job still won’t be easy.

Firstly, the country’s recovery must still fully take hold, with data due this week to show the extent of economic damage caused during lockdowns at the start of the year. At least business confidence on Tuesday may keep increasing above pre-crisis levels.

After that, the new government will need to deploy both imagination and drive to rethink a growth model founded on high-end manufacturing, in a global economy where the greatest prosperity is generated in even more lucrative areas such as technology.

United States

Bank Indonesia meets Tuesday with no change to its monetary settings expected. New Zealand’s central bank is also expected to keep rates and QE settings unchanged on Wednesday with Governor Adrian Orr likely to insist policy will remain stimulatory for a prolonged period even as the economic outlook improves.

In a week shortened across much of the continent by a holiday on Monday, the most significant reports due aside from German data range from euro-region economic confidence to a final reading of French gross domestic product for the first quarter.

In Brazil, forecasts see the mid-month reading of the benchmark inflation index pushing past 7%, well over target, followed by reports on the country’s broadest measure of inflation as well as wholesale prices.

Source: News24