German Industrial Output Unexpectedly Rises 0.7% in September

what happened

German industrial production unexpectedly grew by 0.7% in September from the previous month, the federal statistics office said. Reuters reported that analysts it polled had expected no change. The main driver was the car industry, where output climbed on a seasonal upswing.

The August figure was revised down to a 1% gain from an initial 2%. Year on year, industrial output rose 0.4% in September. According to dpa-AFX, citing Destatis, automotive output jumped 17.1% and pharmaceuticals gained 8.0%, while construction fell 2.6% and mechanical engineering dropped 6.5%.

why it matters

Commerzbank chief economist Joerg Kraemer said industrial output "continues to move sideways at a low level." For markets, the data beat expectations, but the overall picture remains weak, so attention will likely shift to upcoming releases that show whether the recovery in Germany and the euro area is gaining traction.

market impact

Euro and German stocks: data above forecasts supports sentiment, but weakness in construction and machinery limits the gain

• ↔EUR/USD mixed — output above forecasts supports the euro, but the downward August revision limits the gain

tags

instruments