On Friday, the German economy was in focus again after the better-than-expected German Services PMI numbers. Factory order numbers from Germany garnered investor interest early in the European session.
German Factory Orders
German factory orders increased by 0.2% in February after tumbling by 11.4% in January. Economists expected factory orders to rise by 0.8%.
According to Destatis,
- Orders for mechanical engineering surged 10.7%, with the chemical industry (+3.1%) and pharma sector (+6.6%) contributing to the 0.2% monthly gain.
- However, automotive industry orders tumbled 8.1%, with orders for manufacturing metal products down 5.3%.
- Orders for capital goods declined by 0.6%.
- However, orders for intermediate and consumer goods increased by 1.0% and 2.2%, respectively.
- Orders from overseas fell by 0.7% in February, while orders from the Eurozone tumbled 13.1%.
- Domestic orders increased by 1.5%, with orders from outside the Eurozone rising by 7.8%.
Compared with the same month of the previous year, factory orders were down 10.6%. In January, factory orders fell by 6.2% compared with the same month of the previous year.
German Economic Indicators Sent Mixed Signals
Factory orders changed course in February, albeit modestly, signaling an improving overseas macroeconomic environment. Nonetheless, the German manufacturing sector struggled throughout the first quarter of 2024. The German Manufacturing PMI fell from 42.5 to 41.9 in March 2024.
US Dollar Index Price Forecast
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See all US Dollar Index forecastsEUR/USD Reaction to the Economic Indicators from Germany
Before the factory order numbers, the EUR/USD rose to a high of $1.08441 before falling to a low of $1.08233.
In response to the numbers, the EUR/USD rose to a high of $1.08295 before sliding to a low of $1.08230.
On Friday, the EUR/USD was down 0.12% to $1.08241.
Next Up
On Friday, eurozone retail sales figures will draw investor interest early in the European session. Economists forecast retail sales to decline by 0.4% in February after rising by 0.1% in January. A pullback in retail sales would support ECB sentiment toward demand-driven inflation and a June ECB rate cut.
Later in the session, the US Jobs Report will warrant investor attention. Hotter-than-expected labor market data could sink investor expectations of a June Fed rate cut.
Economists forecast average hourly earnings to increase 4.1% year-on-year in March after rising 4.3% in February. Moreover, economists expect nonfarm payrolls to rise by 200k after a 275k increase in February.