Euro Weakens Intraday after Data Shows Drop in German Industrial Production

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By David Schutz, 06 June 2012 10:26 GMT THE TAKEAWAY: German industrial production weakened in May -> Euro well bid on the day but weakens after data

German industrial production fell more than expected in April, the German stats bureau said today. The data added to fears that growth in Europe’s largest economy is slowing as the far-reaching credit crisis curbs demand and consumer confidence. Production fell 2.2% on the month versus the expected 1% drop. The number was -0.7 weaker than April 2011.

Germany has remained the region’s strongest economy since the onset of the crisis, recently posting Q1 economic growth of 0.5% which helped the Euro-area avoid recession. Today’s numbers increased fears that that economic woes will catch up with Germany, which has thus far benefitted from low unemployment and increased exports to emerging markets.

The Euro remained well bid on the day, but suffered from the weak German numbers intraday. Fears of political instability have driven the single currency down since the beginning of May.

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06 June 2012 10:26 GMT

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€ Euro under pressure despite of strong German industrial data

THE TAKEAWAY: Strong German industrial data-> Euro and risky currencies Markets digest French, Greek election results
German industrial production was stronger than expected in March, removing some of the bite from a weak open weekly for the single currency. Production rose 2.8% on the month, more than the - 0.3% markets had expected. The yearly number was 1.6% versus the expected - 1.2%, the German stats Office said today. Both the monthly and yearly figures saw upward revisions.
Germany has struggled to maintain industrial growth as declining global demand continues to erode. Even so, Europe's largest economy remains its strongest, although yesterday's election results from France and Greece threaten to test Berlin's mettle in demanding tough reforms across the Eurozone. Both nations elected anti-austerity parties in a repudiation of the German-led drive to reduce sovereign debt in the Euro-area.
Germany's leader Merkel reportedly told French President-Elect Holland that the Eurozone fiscal compact approved last fall is not up for renegotiation. Berlin has taken a similar hard position regarding Greece, where last weekend's election results are likely to bring increased opposition to austerity.

The Euro remained pressured today as risk-correlated currencies took a beating in the wake of uncertainty over the Eurozone's future.

Euro Unmoved Following Positive Industrial Production Data

12 April 2012 10: 02 GMT the takeaway: industrial production in the euro area increased by 0.5% in February, bat the expectations of analysts-> low production in Germany prevails over 13% increase to the Netherlands-> stays at the same level after the report to the EUR/USD

Eurozone industrial production increased 0.5% for the month of February, led by the France and the Netherlands. Actual production beat average estimates of a decline of 0.2%. However, the figures were 1.8% lower in February of the previous year, as expected by analysts.

The number can be seen as a sign of economic stabilization for the euro area; and a drop in industrial production in Germany and Spain was offset by the improvement of the production in France and the Netherlands. The German numbers released last week were not fully represented in number of today as the collapse of the production of the construction was not included in the survey of the euro area.

EUR/USD do not strongly respond to better than expected data. The pair rose and fell following the release, but who later moved back to the initial level.

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12 April 2012 10: 02 GMT