German industrial orders
German industrial orders

The market has largely ignored the strong German industrial orders data released a short time ago. The euro is down 17 pips on the day, mostly since the release at 0800 CET, though bund yields are up 1.6 bps.

Orders rose 3.9% in August compared to 1.8% expected. In addition, the July reading was revised higher to -11.3% from -11.7%. I suspect the market is having a hard time getting excited about the rebound given the worrisome plunge in last month's data.

The bounce may also have been a one-off with a 37.9% increase in the manufacture of computer, electronic and optical products. The stats office said it was the electronic ones that were largely responsible for the increase.

Deutsche Bank on the report:

"Given the extreme monthly volatility, it is difficult to identify the underlying trend. Comparing May/August with the first four months of the year gives a 2% increase (dom. 1.0%, for 2.6%). Still, real turnover is down by a good half-percent in July/August compared to Q2, which is in line with our call of a 0.3% q/q drop in Q3 GDP. "