Bob Savage of Bank of New York noted that China criticized the EU's proposed Industrial Acceleration Law, calling it discriminatory and warning of potential countermeasures that could affect trade and investor confidence. He also observed a sharp deterioration in German consumer sentiment, with the German GfK consumer confidence index hitting its lowest level since February 2023, amid rising energy prices and geopolitical tensions related to Iran, which are negatively impacting the Eurozone's outlook and the euro's exchange rate against the US dollar.

 

 

Political Friction and Inaccurate German Data

China’s Ministry of Commerce criticized the European Union over its proposed Industry Acceleration Law. It formally submitted its comments on April 24, expressing serious concerns about what it considers discriminatory provisions against foreign investors.

“These measures violate the fundamental principles of the World Trade Organization, including most-favored-nation (MFN) rules and national treatment, and could undermine fair competition and investor confidence,” the ministry stated.

Germany’s consumer climate deteriorated sharply in May, with the headline GfK index falling to -33.3 from -28.1 in April. This represents a 5.2-point drop, its weakest level since February 2023.

“Economic expectations worsened further to -13.7, reflecting concerns that geopolitical tensions, particularly the Iranian conflict, could derail Germany’s fragile recovery prospects.”