Unicredit: Technical setback for German new orders leaves upward trend intact

Quotes from Unicredit

• German new orders in the manufacturing sector declined 3.9% mom in January after plus 4.4% in the previous month. We think that there is no reason to worry.
• The latest drop does not have anything to do with a sudden deterioration in fundamentals. Instead, it is some kind of a technical breather after unusually strong rises in the previous few months. 
  
  
• New orders excluding big-ticket items rallied in the fourth quarter 2014 (+3.6% qoq or +15% qoq annualized!). 
  
  
• Tomorrow morning, the industrial production reading for January will be released.
• We expect a significant rise of 0.8% mom in line with surging backlog orders. 
  
  
• The odds are high that GDP growth in the first quarter will remain strong. We expect a plus of 0.4% qoq with some upside risks.