Euro area industrial production rises sequentially in May

Euro area industrial production rose on a sequential basis in May, as was widely suggested by the data from the large member states, and thanks especially to a sharp rise in Germany. Industrial output was up 1.3 percent sequentially in May, the steepest rise since last November, to reverse the 0.8 percent sequential decline in April.

All major components also saw marked rises, with manufacturing output up 1.4 percent sequentially, and consumer goods output rising at the most rapid rate in one-and-a-half years, by 2.2 percent sequentially. However, the average level for the second quarter so far is around 0.2 percent below the first quarter average, implying that a fall in June might bring a second successive quarterly fall in the industrial sector, which had represented the key impetus to accelerated GDP last year, noted Daiwa Capital Market Research in a report.

That would be in line with the stable deterioration in sentiment indicators such as the manufacturing PMI, which has been gradually moving lower since the end of last year and in June reached its lowest level since the end of 2016.

“And looking further ahead, the risks to the outlook for the sector appear skewed to the downside, with Trump's trade war making manufacturers feel particularly uneasy”, added Daiwa Capital Market Research.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bearish at -32.4399, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 138.049. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex