German factory orders rise sharply in October, robust production likely in months ahead

Manufacturing orders in Germany rose sharply in October after rising noticeably in the earlier two months. Factory orders surged 0.5 percent in the month, as compared with consensus expectations of a decline of 0.2 percent. The previous two months had already recorded orders growth, while September reading was upwardly revised a bit to 1.2 percent from 1 percent. For the third straight month, the figure has surpassed the high of order intake volumes reached in November 2007, before the onset of the financial crisis. However, excluding the big-ticket orders, the headline figure dropped slightly by 1 percent.

However, this does not take away from the big picture. The trend in orders excluding other vehicles still indicates clearly upwards. Orders from the euro area have been in an uptrend since 2016. Orders from non-euro nations were especially robust in the past months. Also, domestic orders have risen markedly after having trended sideways since 2015. Overall, this indicates towards robust production in months ahead, noted Commerzbank.

“However, tomorrow’s October production data will probably come in slightly lower, as is suggested by sales, which fell by 2.1 percent in October”, added Commerzbank.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -84.1677, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 36.0601. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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