German economic growth seems to have slowed slightly in Q3, likely to accelerate again in Q4

The German economic growth is expected to have slowed down slightly in the third quarter from the June quarter. According to a Societe Generale research note, the preliminary estimate of the German GDP growth is likely to have come in at 0.3 percent sequentially, as compared with the 0.4 percent growth seen in the second quarter.

Even if economic confidence has slightly fluctuated since the Brexit referendum, the disturbance is seen rather coming from huge fluctuations in industrial production, which is expected to have stemmed from unstable patterns in the production of motor vehicle and the summer holidays.

The surveys again indicate towards a more rapid economic activity in the industrial sector. The economic growth is expected to accelerate again in the December quarter, said Societe Generale. This would counter the lack of momentum seen in the third quarter.

Construction and household consumption are expected to have slightly rebounded in the third quarter, while the robust labor market is likely to continue to give support for consumption, even in 2017 when real disposable incomes might be curtailed by increased inflation. Therefore, the German economy continues to remain stable and strong and is likely to remain strong going into 2017 and the general election in the second half of 2017, added Societe Generale.

At 08.00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at -44.4714 (lower than -75 represents neutral trend).