What Germany’s dismal GDP number really means for Europe and interest rates

Germany’s gross domestic product shrank 0.1% in the second quarter of the year, confirming the lackluster performance of the German economy hit by rising trade fears, the slowdown of Chinese imports and home-grown industrial and economic problems.

The GDP decline, expected as it was by most economists, puts Germany at risk of a technical recession this year (defined by two consecutive quarters of declining GDP) and contrasts with the overall eurozone’s 0.2% GDP growth in the three months to June.

Yields on the benchmark 10-year Treasury TMUBMUSD10Y, -6.74% fell on...