GERMAN INDUSTRIAL PRODUCTION

This brought Q2 on a positive note, expanding 0.4% m/m and meeting forecasts, easily the best growth since October. This more impressive when considering the 60bp upwards revision to March, now -0.1% m/m. This left the 3m/3m at -0.5% but the index is at a 2026 high.

Construction was the main upside (+2.4% m/m) and has now expanded for two months from February's more than 10yr low. Chemicals, metals also higher but autos weighed (-4.7% m/m). Hence, manufacturing/mining was flat. and the index remains just above the cyclical low.

Intermediates were +1.4% m/m, consumer goods +1.9%. Capital goods, however, contracted 1.5%. Energy production was +0.2%. Energy intensive output was +1% m/m (seen as temporary on precautionary inventory demand).

Meanwhile, TRUCK TOLL MILEAGE rose 1.6% m/m in May, what should be an IP positive going forward.

April TRADE produced a surprise 0.9% m/m EXPORTS expansion (-0.5% expected), but imports also surprised to the upside with 1.2% m/m growth (-2% the forecast). Thus, the nominal trade surplus marginally narrowed, to Eur 14.5bn, matching November's smallest of the cycle.

Very little to get over excited here although the construction rebound is welcome. The hope comes from truck mileage. Not an economy screaming rate hike.