THE TAKEAWAY: German industrial production reported at -2.6% in October -> Bundesbank cuts German GDP forecast -> Euro slides further
German industrial production fell at the sharpest rate in two and a half years in October according to the German Economy Ministry. Production fell 2.6% (seasonally adjusted), lower than both expectations for no change and September’s revised 1.3% decline. Industrial production was down 3.7% (workday adjusted) from October 2011.
Earlier today, the Bundesbank cut its GDP forecast for 2012 to 0.7% from a previous 1%, and the forecast for 2013 was cut to 0.4% GDP growth. The German economy has been suffering from the Euro crisis, and GDP growth slowed to 0.2% in Q3.
The Euro slid slightly in forex markets following the news of disappointing industrial production. EURUSD has dropped 50 points over the course of the European session following the Bundesbank release and news of an earthquake in Japan. Support could be provided at 1.2900, by the 50% retracement of the decline from October’s high to November’s low.
EURUSD 15-minute: December 7, 2012