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The health of Europe's largest economy is in trouble while Germany is on the brink of a recession.
A drop in exports slowed down the German economy, which contracted by 0.1% in the second quarter of 2019.
"Germany is in a dire situation with a negative GDP this week and, with expectations of another negative GDP in the third quarter, the Germans are going to have to open their pockets and put in. place of fiscal stimulus, "Andy Brenner, Global Head of Fixed Income at NatAlliance told Liz Claman of FOX Business on Friday.
"In Europe, its mode of crisis."
The German government would be under pressure, fearing a recession, to give up its balanced budget that it has imposed itself, or Black Zero rule, and to fund further fiscal stimulus with new debts. The country's 10-year Bund yield, which had reached an all-time low earlier in the day, responded to the rally by recovering slightly.
"In Europe, its mode of crisis," said Brenner. "And even one of the European governors came earlier this week and said that he was going to amaze us on September 12."
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Brenner added that Europe's lack of control over the trade war between the US and China would most likely create a global recession.
"I think Europe is going to have a lot of trouble and I do not see a solution in the short term," he said.
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