Overview
Germany, Eurozone's manufacturing powerhouse, will publish Industrial Production data for February at 06:00 GMT.
The output is forecasted to have contracted by 0.9% month-on-month, having risen by 3% in the previous month. The annualized figure is expected to come in at -3.9% compared to -1.3% in January.
Downturn eased in February?
The downturn in Germany's manufacturing sector eased in February, despite coronavirus-led supply chain disruption, according to IHS Markit/BME Manufacturing Purchasing Managers' Index (PMI).
The headline figure rose to a 13-month high of 48.0 in February, up from January's reading of 45.3. The upward pressure came from of its component, with output, new orders, employment and stocks of purchases each falling at slower rates, according to the official report.
A reading below 50 indices contraction, however, the rise from 45.3 to 48.00 represents an easing of the rate of contraction.
As a result, the possibility of Germany's industrial production bettering estimates cannot be ruled out.
Impact on EUR/USD
Macro data dating back to February is of little relevance now, as it is generally accepted by now that the coronavirus outbreak, which gathered pace across the Eurozone in March, may have pushed the economy into a recession.
As a result, a big beat in Germany's industrial production for February may not yield a big positive reaction in EUR/USD, more so, as the futures tied to the S&P 500 futures are currently reporting a 0.60% drop and could draw bids for the US dollar.
On the other hand, if the data shows the manufacturing output was already facing renewed slowdown ahead of the coronavirus crisis seen in March, the single currency may go on the offer, possibly challenging support at 1.0770. The pair has bounced at least two times from that level since Friday.
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).
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