German industrial production defied worst-case fears in April, but stagnation persists

Italian industrial production proves resilient in April

German industrial production defied worst-case fears in April, but stagnation persists

Following the recent report on German industrial production, the desk interprets this as an indication of continued stagnation despite a modest uptick in activity. April saw a 0.4% month-on-month increase in industrial production, yet this remains insufficient to offset a persistently weak growth rate, with levels still 12% below pre-pandemic benchmarks. Per the full note [source], while construction activity positively contributed with a 2.4% rise, broader economic concerns fueled by geopolitical tensions and high energy costs weigh heavily on the outlook. As the macroeconomic landscape remains challenging, traders should remain cautious about sustainable rebounds in the Eurozone economy, particularly regarding EUR sentiment amidst shifting expectations.

German Ifo index stabilises in May but remains too weak to bring substantial relief

ING Economics reports that the German Ifo index stabilized in May, but remains too weak to provide substantial economic relief. The business climate index edged up slightly, yet the reading continues to signal stagnation in Europe's largest economy. This offers limited support for the euro, which remains pressured by broader growth concerns and ECB policy expectations. The lack of a strong recovery keeps EUR/USD anchored below recent highs, with consensus forecasts clustered around 1.075. No high-impact calendar events are imminent, leaving sentiment-driven flows dominant.

Eurozone industrial production holds up but trade surplus under pressure