Germany’s DIW institute warned that second wave of coronavirus infections “has arrived” and “threatens to stifle the economy upswing”. After growing around 6% in Q3, further prospects are “gloomy considerably”. DIW economic barometer for Q4 dropped from 122 pts to 105 pts.

“The upswing will very likely be slowed down significantly,” says DIW economic chief Claus Michelsen. “There are again the threat of sharper restrictions on social and economic life – the pandemic is taking consumers and companies away from confidence. And that at a time when many companies are still struggling with the consequences of the lockdown in spring and have hardly any financial reserves”.

Full release here.

German Economy Minister Peter Altmaier said the country is dealing with “exponential growth” of coronavirus infections while “the number of new infections is rising by 70-75% compared to the week before.” He expected number of daily new cases to jump to 20k a day at the end of this week.

Separately, Finance Minister Olaf Scholz also said the development was “very worrying”. Additional measures to curb the spread “should be targeted, temporary and focussed.” “They should be taken as uniformly as possible across Germany and be generally understandable.”

“So far, our country has fared quite well during the coronavirus pandemic and it will be decided in the coming weeks whether it will stay that way. It’s in our hands,” he added.

Bundesbank said economic output in Germany is “likely to have increased sharply” in Q3. In terms of quarterly GDP, the economy “could have made up for a little more than half of the drastic slump” in 1H. But it’s still around -5% below pre-crisis level at Q4 2019. From today’s perspective, “the economy recovery is likely to continue in the current quarter, albeit at a much slower pace”.

Industry “caught up remarkably” with mood improving. But That for service companies was “clouded a little”, affected by recent sharp rise in coronavirus infections and containment measures. The “slight recovery” on the labor market “has recently continued”. Consumer prices fell slightly and will fall significantly below previous year’s level “due to the lower oil prices and base effects”.

Full report here.

Germany Ifo Business Climate dropped slightly to 92.7 in October, down from 93.2, matched expectations. That’s the first decline after five consecutive rises. Current Assessment rose to 90.3, up from 89.2, beat expectation of 89.7. Expectations Index dropped to 95.0, down form 97.4, missed expectation of 96.0.

Ifo President Clemens Fuest said: “Companies are considerably more skeptical regarding developments over the coming months. In contrast, they gave a slightly more positive assessment of their current situation than last month. In view of rising infection numbers, German business is becoming increasingly worried.”

Looking at some details, manufacturing rose from -.5 to 1.6. That’s the first positive reading since June 2019. Services dropped from 6.9 to 3.9. Trade dropped from 0.3 to -0.1. Construction also dropped from 3.3 to 0.8.

Full release here.