Germany: Stronger than expected industrial production - BBH

Research Team at BBH, suggests that yesterday's unexpectedly poor German factory orders (-2.0% vs. expectations for a 0.5% fall) left investors ill-prepared for the stronger than expected industrial production report today. 

Key Quotes

“The 0.8% gain follows a revised 1.1% decline in March (initially -1.3%) and February (-0.7%).   Going back to through the second quarter last year, German industrial output has risen only one month every quarter.  The weak orders data warn that although output began Q2 on a firm note, there may not be much follow-through. 

If, as we have argued, the euro is correcting the slide from May 3 (~$1.1615) to May 30 (~$1.11), then at its current level (~$1.1370), it has retraced 50% of the move.  The next retracement is found near $1.1420.”