Rebound in German factory orders expected in September

The August factory orders turned out to be dismal in Germany, falling 1.8% mom after a decline of 2.2% in July. Some reports have argued that this was due to holiday effects - while true that we have seen a similar pattern in previous years, it does not fully explain all aspects of the data. For instance, orders for motor vehicles saw a second month of steep decline, driven mainly by non-euro area orders. 

While domestic orders could rebound more strongly following the regular volatility in this series and continued resilience in the domestic sector. The September data is also unlikely to fully capture the fallout from the VW scandal, and thus orders of motor vehicles are expected to take a bigger hit as of the October data.