Germany Aug Industrial Production Preview - 0700BST 7/10/20

Consensus: +1.5% m/m; -8.7% y/y; Prev (Jul): +1.2% m/m, -10.0% y/y

• In Aug, markets are looking for an uptick of 1.5% for m/m production, while y/y output is seen 8.7% lower than in Aug 2019.
• M/M IP ticked up 1.2% in Jul, marking a third successive increase in output after an upwardly revised figure for Jun (+9.3%), although Destatis noted that Jul production was still 10.8% below Feb's level.
• The automotive sector recovered further as well with output rising 6.9% m/m, nevertheless, output remains around 15% below levels seen before the crisis.
• Survey evidence is in line with market expectations of another uptick:
• Germany's mfg PMI surged to a 26-month high in Sep, signalling further recovery of the sector.
• Similarly, the ifo business climate index ticked up again in Sep with business climate in the industrial sector increasing to the highest level since Jun 2019.
• Recently released industrial orders surprised to the upside, rising by 4.5% in Aug on a monthly basis but they remained 3.6% below Feb's level.