Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Is Germany turning a corner? After many months of gloom, Europe’s largest economy may finally be bottoming out.
German factory orders jumped by 1.3% month-on-month in September, comfortably beating expectations of a 0.1% rise.
That follows a 0.6% decline in August, and is one of the best months for German manufacturing this year (although that’s not difficult!)
The pick-up in demand was driven by orders within Germany, and from countries outside the eurozone.
Destatis, the statistics body, explains:
Domestic orders increased by 1.6% and foreign orders rose 1.1% in September 2019 on the previous month. New orders from the euro area were down 1.8%, new orders from other countries increased 3.0% compared to August 2019.
Encouragingly, orders for expensive, heavy-duty machinery and equipment rose strongly.
Destatis says:
In September 2019 the manufacturers of intermediate goods saw new orders decrease by 1.5% compared with August 2019. The manufacturers of capital goods showed increases of 3.1% on the previous month. For consumer goods, a rise in new orders of 0.8% was recorded.
Encouraging stuff. But on an annual basis, sales were still 5.4% lower than in September 2018.
This may not prevent Germany falling into recession, but it does offer hope that growth could pick up again soon.
Also coming up today
Over in Japan, technology investor Softbank has just posted a whopping operating loss of ¥700bn for the last quarter (almost £5bn), due to disappointing bets on companies such as WeWork and Uber.
That’s a stark reversal on the ¥706bn profit in July-September 2018, and much worse than the ¥48bn loss which analysts expected.
SoftBank chief Masayoshi Son is presenting the report now, and admitting that “we are in a rough sea”…
The latest surveys of eurozone purchasing managers are expected to show that Europe’s services sector continued to grow last month. But with manufacturing shrinking, the euro economy remains subdued.
After a few days of gains, stocks are dipping today. Equity indices in Asia have dropped back, and a weakish open is expected in Europe.
Traders are now questioning whether a US-China trade pact is achievable, with Beijing pushing Washington
On the corporate front, UK retailer Marks & Spencer has just posted a 17% drop in profits as clothing sales continue to slide – down another 5.5%! BMW and Adidas are also reporting financial results (more shortly…)
The agenda
- 9am GMT: Eurozone service sector PMI for October
- 10am GMT: Eurozone retail sales for September
- 3.30pm GMT: US crude oil inventory figures