German Factory Orders Unexpectedly Surge by 4.8% in February

It is a busy day on the European economic calendar. German factory orders drew interest this morning. Following the German trade data from Tuesday, the numbers needed to impress.

Factory orders surged by 4.8% in February versus a 0.5% rise in January. Economists forecast a 0.3% increase in February.

According to Destatis,

• New orders in the capital goods sector jumped by 7.3% in February, while orders in the intermediate goods sector increased by 1.3% and by 1.9% in the consumer goods sector.
• Motor vehicles and motor vehicle engines (+3.7%) saw strong orders.
• Excluding large-scale orders, orders increased by 1.2% in February.
• New orders in the manufacturing sector increased for a third consecutive month.
• However, new orders are 5.7% lower than in February 2022.

The latest figures reflected increased demand and improving manufacturing sector conditions. In March, the German manufacturing PMI survey reported weaker demand. New orders fell at a more marked rate in March, suggesting a likely fall in factory orders next month.

EUR/USD Reaction to German Factory Orders

Ahead of the factory order numbers, the EUR/USD fell to an early low of $1.09506 before rising to a high of $1.09512.

However, in response to the German factory order numbers, the EUR/USD rose to a high of $1.09596 before falling to a low of 1.09496.

This morning, the EUR/USD was down 0.01% to $1.09555.

Next Up

Later today, euro area member states and the Eurozone service and composite PMI numbers will also influence. Spain, Italy, and the Eurozone’s PMI numbers will likely garner the most interest.

Investors should also consider ECB member speeches, with the economic calendar on the busier side. ECB Chief Economist Philip Lane will lecture at the University of Cyprus today.

Looking ahead to the US session, it is a busy day on the US economic calendar. US ISM Non-Manufacturing PMI and ADP nonfarm employment change will draw interest.

The reports will move the dial, considering the market sensitivity to the JOLTs job openings,

Other stats include trade data and finalized markit survey services PMI numbers, which should have a muted impact on the EUR/USD.

Investors should also monitor Fed chatter on monetary policy and the US economy.