Economic Data Sinks the EUR as the Delta Variant Continues to Spread

It was another busy start to the European session. German and Eurozone economic sentiment, German factory orders, and Eurozone retail sales figures were in focus.

German Factory Orders

In May, factory orders slid by 3.7%, reversing a 0.2% fall from April with interest. Economists had forecast a 1.0% increase.

According to Destatis,

• Domestic orders increased by 0.9%, while foreign orders tumbled by 6.7%, month-on-month.
• New orders from the euro area decreased by 2.3%, while sliding by 9.3% from other countries.
• In May 2021, the manufacturers of intermediate goods saw new orders fall by 3.6%.
• Orders for capital goods tumbled by 4.6%, while orders for consumer goods rose by 3.9%.
• Excluding major orders, real new orders in manufacturing were 3.7% lower than in the previous month.

Economic Sentiment

ZEW economic sentiment figures for Germany and the Eurozone also disappointed.

Germany’s Economic Sentiment Indicator fell from 79.8 to 63.3 versus a forecasted decline to 75.2.

For the Eurozone, the Economic Sentiment Indicator fell from 81.3 to 61.2, which was worse than a forecasted decline to 78.9.

Eurozone Retail Sales

In May, retail sales increased by 4.6%, reversing a 3.9% fall from April. Economists had forecast a 4.4% rise.

According to Eurostat,

• Sales of non-food products increased by 8.8% and by 8.1% for automotive fuels.
• By contrast, food, drinks, & tobacco sales slipped by 0.3%.
• France and the Netherlands recorded retail sales of 9.9% and 9.3% respectively to lead the way.
• Compared with May 2020, retail sales was up by 9.0% in the euro area.
• The jump was driven by a 28.4% surge in automotive fuel sales and a 14.8% increase in non-food product sales.
• Food, drinks, & tobacco sales rose by just 0.1%, however.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat low $1.18585 before rising to a pre-stat high $1.18332.

In response to today’s stats, the EUR rose to a post-stat and current day high $1.8951 before sliding to a post-stat and current day low $1.18364.

While the EUR hit today’s current high following Germany’s disappointing factory order numbers, it was the economic sentiment figures that did the damage.

At the time of writing, the EUR was down by 0.21% to $1.18382.

Next Up

June’s ISM Non-Manufacturing PMI figures from the U.S…