Germany's economy powered ahead in the third quarter thanks to buoyant exports and investments as it cemented its role as the euro zone's growth engine. But, as David Pollard reports, there was disappointment in Asia as China's economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations.
China's been showing a red light to pollution - in its cities.... And from its factories. Where a clampdown has hit industrial output. If at 6.2 per cent in October, the slowdown is, officially at least, under control. (SOUNDBITE) (Mandarin) CHINA'S NATIONAL BUREAU OF STATISTICS SPOKESWOMAN, LIU AIHUA, SAYING: "Whether in terms of supply, demand or what the markets expect, we can say that it is entirely possible to maintain steady growth next year." And judging by the 25 billion dollar record set by Saturday's Singles Day - China's annual shopping extravaganza - consumer appetites are strong. Though at 10 per cent, annual growth in retail sales is below forecast. Lower fixed-asset investment rates and softer import and export flows are also reshaping expectations. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "The market may have to adjust to growth in China growing at a slower clip than it's become accustomed to." Unlike Europe, where the opposite may apply. As Germany powers upwards on a 0.8 per cent growth rate in Q3. That's higher than expected - on stronger investment and exports. And robust domestic demand that's lifting its neighbours in the euro zone too. SOUNDBITE (English) SWISSQUOTE BANK, HEAD OF MARKET STRATEGY, PETER ROSENSTREICH, SAYING: "It's the consumer side, the consumption side that's starting to improve. And what we're seeing is that when you have this consumer, consumption-led recovery it tends to have a much longer period than if it's just a pure sort of interest rate driven sort of acceleration. So we do think that the European story continues to have legs." Inflation though is still the laggard. Germany's month-on-month rate edged backwards in October. Its headline annual rate still a half per cent below where - at around two per cent - the European Central Bank wants it to be.