When is the German industrial production and how could it affect EUR/USD?
|Overview
Germany, the manufacturing power house of Europe, will publish industrial production figures for the month of May at 06:00 GMT today.
The data is expected to show the factory activity contracted at a seasonally adjusted rate of 0.4% month-on-month in May, having dropped 1.9% in the preceding month. In annualized terms, the industrial production is seen contracting 1.1% in May, following a 1.8% slide in the previous month.
Lead indicators point to weakness
German factory orders plunged 8.6% year-on-year in May, the biggest slide in almost a decade, underscoring the negative impact of trade tensions on the Eurozone’s biggest economy.
IHS Markit’s flash Purchasing Manager’s Index (PMI) for manufacturing dropped to 44.3 in May from 44.4 in April. That was the fifth below-50 monthly in a row. A reading below 50 indicates contraction. Notably, both new orders and export sales had led the decline in the PMI.
Going by the lead indicators, the probability of industrial production printing below estimates is high.
A bigger-than-expected contraction will only strengthen the case for an early stimulus by the European Central Bank (ECB) and send the EUR/USD pair lower toward the support at 1.1181 (June 18 high).
As of writing, the pair is trading largely unchanged on the day at 1.1228. The spot fell 0.53% on Friday and hit a three-week low of 1.1207 as a better-than-expected US non-farm payrolls data dampened expectations of aggressive Federal Reserve easing and put a bid under the US Dollar.
Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.