The weak increase in orders for industrial goods has once again cast doubt on the recovery of the German economy after the impact of the coronavirus pandemic. In the month of July, industrial orders increased 2.8% compared to the 5% expected, which points to slower progress than expected.
"We will not see pre-crisis levels as quickly as some expected," said Jens-Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg, according to Reuters.
Source: Admiral Markets Forex Calendar. Screenshot showing the evolution of orders for industrial goods in Germany.
Order intake was 8.2% lower than in February, before containment measures were imposed to slow the spread of the coronavirus. Domestic orders fell 10.2% in July, while foreign orders rose 14.4%, according to the Federal Statistics Office.
Last Tuesday, the German government had revised its economic forecasts for the whole of 2020, estimating that it will suffer a contraction of 5.8% compared to the 6.3% previously forecasted. The German Executive estimates that GDP will grow by 4.4% but will not reach levels prior to the coronavirus until early 2022.
Despite the bad data for industrial orders, the DAX managed to register small increases at the beginning of the session, in line with the rest of the European indices.
Source: Admiral Markets MetaTrader 5. DAX30 daily chart. Data range: from June 5, 2015, to September 4, 2020. Prepared on September 4, 2020, at 9.30 a.m. - Keep in mind that past returns do not guarantee future returns.
The IBEX35 was the European index that rose the most in the morning, with advances of more than 1%, after two of its largest banks, Bankia and CaixaBank, announced negotiations to merge.
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