German Industrial Production unexpectedly rises by 0.3% MoM in Feb, EUR/USD keeps gains

Industrial Production in Germany unexpectedly increased in February, the official data showed on Tuesday; confirming that the manufacturing recession in Europe's largest economy is slowing its pace.

The industrial output came in at 0.3% MoM, the federal statistics authority Destatis said in figures adjusted for seasonal and calendar effects, vs. a 0.9% drop expected and +3.0% last.

On an annualized basis, the German industrial production arrived at -1.2% in February versus -3.9% expected and -1.3% booked in January.

Just ahead of the industrial figures, the German IFO institute said that its index for industrial production expectations took a dive in March. The index slipped from +2.0 to -20.8.

Further comments

This is the most drastic slump since the survey began in 1991.

Assumes that this development is still somewhat underestimated as well.

Considering that most of the survey responses were received by mid-March.

About German Industrial Production

The Industrial Production released by the Statistisches Bundesamt Deutschland measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

FX Implications

The shared currency failed to cheer the upbeat German industrial figures, keeping EUR/USD in a familiar range around 1.0830. The spot hit a new two-day high at 1.0841 before the data release, as the greenback eased across the board amid risk-on.