German factory orders rise surprisingly in September

German industry orders rose sequentially in September. Factory orders rose surprisingly by 0.3 percent, as compared with consensus expectations of a decline of 0.5 percent. Meanwhile, the Statistical Office upwardly revised the prior month’s data to 2.5 percent. Nevertheless, orders excluding big ticket orders dropped 1.6 percent in September. Orders in the automotive industry dropped 0.3 percent.

This implies that car manufacturers are still apparently witnessing difficulties in converting to the new WLTP. The prior month has shown that the car manufacturers had at least partly overcome these. Orders excluding motor vehicles continue to move just sideway. After stagnation in the third quarter, the economy as a whole is therefore at least exposed to downside risks in the fourth quarter.

Nevertheless, the upswing would generally continue. This is because carmakers would overcome the changeover difficulties in the near future, noted Commerzbank in a research report. Moreover, the economic environment continues to be favourable. The softer euro is giving a slight tailwind, the global economy is in good shape in spite of the fall in early indicators, and the ECB continues to be on the accelerator pedal, stated Commerzbank.

At 11:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bullish at 28.9658, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -22.2009. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex