Eurozone Industrial Production surged in August

Bert Colijn ING Economic and Financial Analysis

A strong 1.8% month-on-month increase in production provides some support for third-quarter growth expectations after some dismal survey readings, but longer term issues for the industry sector have yet to be resolved.

Finally a strong number out of the Eurozone industry. The production boost was driven by Germany, which saw production increase by 3.3% in August, erasing losses from the 3.3% decline in July. France and the Netherlands also experienced fast growth at 1.4 and 2.2% month-on-month. This mid-quarter growth spurt will be helpful in supporting economic activity in the quarter, which has been under pressure judging from weakening survey data evidence on economic growth.

Still, expectations about industry remain lacklustre for the rest of the year. The list of concerns for Eurozone industry is long at the moment, and ranges from increased competition from China to volatile energy costs, labour shortages and supply chain uncertainties. This means that it’s pretty hard to see the start of a vibrant recovery for the sector at this point.

At the same time, the runoff of inventories is underway, which at some point should support activity. We don’t think the strong August production data is the start of this though. In fact, it looks like improvements in the inventory cycle will be more of a story for next year. For the manufacturing sector, this means that we don’t expect a sustained recovery to start before 2025.

Read the original analysis: Eurozone Industrial Production surged in August

Author

Bert Colijn

ING Economic and Financial Analysis

Bert Colijn is a Senior Eurozone Economist at ING. He joined the firm in July 2015 and covers the global economy with a specific focus on the Eurozone.

EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

The weekender: When software turns the blade on itself

Autonomous AI does not just threaten trucking companies and call centers. It challenges the cognitive toll booths that legacy software has charged for decades. This is not a forecast. No one truly knows the end state of AI.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.