Despite the pervasive weakness in the Euro keeping German exports competitive, industrial production failed to grow in May as concerns about the downturn in global trade continue to spread. Even though Greece has proven a looming risk factor, this is not the first sign that the German manufacturing machine is slowing. Factory orders released yesterday morning showed that orders contracted -0.20% in May after climbing 2.20% in the prior month. Aside from the growing softness in German exports, eyes are still trained on Greece as capital controls and the holiday are extended. Yesterday marked the installation of newly ordained Greek Finance Minister Euclid Tsakalotos following the departure of Yanis Varoufakis. While unlikely to make a substantial difference in creditor negotiations, it marks a new leg of the crisis. Indices were most impacted yesterday as the EURUSD pair filled in the gap lower before resuming the trend lower overnight.
German Exports at Risk
Daily Analysis - 07/07/2015