German Factory Orders Increase by 3.9% in August

FXEmpire.com -

Highlights

  • German factory orders rose by 3.9% in August.
  • Orders for electronic components surged, while orders in the automobile sector declined.
  • Next up is the US Jobs Report.

German Factory Orders

German factory orders increased by 3.9% in August vs. an 11.3% slump in July. Economists forecast factory orders to increase by 1.8% in August.

According to Destatis,

  • The manufacture of computer, electronic, and optical products surged 37.9% in August.
  • Destatis attributed the jump to the manufacture of electronic components.
  • There were also notable increases in orders for the manufacture of electrical equipment (+8.7%) and in Pharmaceuticals (+4.0%).
  • However, auto industry orders declined by 0.7%.
  • Notably, orders from overseas increased by 3.9%, with domestic orders rising by 4.0%.
  • On a three-monthly basis, orders were up 4.9% from June to August 2023 compared with the previous three months.
  • However, compared with August 2022, orders were down 4.2%.

The German manufacturing sector contributes less than 20% to the economy, limiting the impact on ECB policy goals. However, the uptick in new orders may offer relief after a string of weak German economic indicators.

EUR/USD Reaction to German Factory Orders

Before the German factory order numbers, the EUR/USD rose to a high of $1.05508 before falling to a pre-stat low of $1.05352.

However, in response to the German factory orders report, the EUR/USD fell to a post-stat low of $1.05341 before rising to a high of $1.05402.

This morning, the EUR/USD was down 0.08% to $1.05382.

061023 EURUSD 3 Minute Chart

Up Next

The US Jobs Report will be in the spotlight later today. After a mixed set of labor market reports this week, the US Jobs Report will influence investor bets on a December Fed rate hike.

Economists forecast average hourly earnings to increase by 0.3% in September and nonfarm payrolls to rise by 170k. Significantly, economists predict a decease in the US unemployment rate from 3.8% to 3.7%.

A pickup in wage growth and tighter labor market conditions would favor a more hawkish Fed rate path.

Beyond the US Jobs Report, FOMC member reaction to the report also needs consideration. FOMC voting member Christopher Waller is on the calendar to speak today.

 

This article was originally posted on FX Empire

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