A Distressed Cycle Coming in Germany and France?

Apollo Chief Economist

The macro outlook is simple at the moment. The US economy is strong and Europe is weak.

But there are some crucial nuances in the outlook for Europe.

Core countries such as Germany and France are weak, but the periphery countries—Spain, Portugal, and Greece—are strong, see chart below.

This unusual intra-European divergence has important implications for rates, credit, and asset allocation more broadly.

Europe: Core countries are underperforming periphery countries
Note: Country groupings are nominal GDP weighted. Source: Bloomberg, Apollo Chief Economist

Download high-res chart


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