Eurozone economy is still doing quite well - Rabobank

Eurozone domestic economy is still doing quite well was actually supported by German factory orders this morning as oders rebounded 0.3% MoM in February following a weak start (-3.5% MoM) to the year, explains the research team at Rabobank.

Key Quotes

“The report showed that orders were driven in particular by euro-area demand for investment goods and to a lesser extent by demand for intermediate goods. Domestic orders from Germany were remarkably weak. Non-Eurozone orders were as well (-0.6% following -3.9% in January), but that may be less of a surprise given the recent strength of the euro. Overall the report confirmed that industrial activity remains robust although momentum has started to wane – a message that was also conveyed by the latest string of PMI surveys. As such the industrial production figures to be released tomorrow may show a similar picture: a pick-up in month-on-month terms for February, but with YoY growth slowing down somewhat.”

“With a light data calendar for today, Eurozone retail sales make for an interesting figure. Amidst a strong economy and falling unemployment one would also expect strong consumer spending. But the series has been quite wobbly in recent months. The underlying pace of slightly above 2% remains consistent with our 2.4% GDP growth estimate for the year as a whole, but German data, released two days ago, were weak (with growth dropping from 2.5% to 1.3% YoY) and so there is a clear chance that today’s numbers will disappoint as well.”