German trade soared more than expected in January in a further sign that Europe's biggest economy is firing on all cylinders. As David Pollard reports, the new data - coming just a day after the latest ECB policy meeting - may add to pressure on Mario Draghi to row back on monetary stimulus.
A German economy in full swing... Exports up by 2.7 per cent in January, imports by 3 per cent. Both far above what analysts had expected. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "The German economy continues to hum on all motors. The one point of slight weakness there is actually domestic demand, domestic consumption." Even there consumers might be picking up any slack. Germany's trade surplus edging higher to 18.5 billion euros for the month. The wider current account surplus dropping almost half to just under 13 billion. That, a possible sign, say economists, of domestic demand rebalancing a traditional export base. It could be more good news for the ECB. Mario Draghi's hint of a more hawkish stance at Thursday's policy meeting sent the euro up half a per cent against the dollar. Investors now bet on a rate hike within a year as the euro zone economy improves. And a programme to manage down a massive 2.3 trillion euro QE programme as demanded by Germany. If there are also reasons to hold off, for a while. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "In terms of more forthright language of more aggressive tapering, shall we say, we'll probably have to wait until September. By then, hopefully the dust will have settled in Europe and we'll have more clarity from the US. Oh, and of course, the negotiations on Brexit, presumably, will have been proceeding for about six months by that stage." And amid the stronger trade and recent industry data, German construction is weaker. Down 1.3 per cent in January because of cold weather. With key elections in Germany as across Europe this year, it and other sectors may yet need to brace for headwinds too.