GERMAN DATA: September Factory Orders Strength Partly 'Core' Driven

MNI (LONDON) - German factory orders surprised to the upside in September, at 4.2% M/M (vs +1.5% cons). August's print was revised by +0.4pp to -5.4%. While the headline figure was driven higher by less persistent large-scale one-offs, also underlying 'core' orders looked solid this month. Despite the monthly rise, sentiment remains close to cycle lows - so the slightly stronger September print should bring little change for the overall bleak picture in German manufacturing.

• Underlying ‘core’ orders (excl. large-scale one-offs) rose 2.2% M/M.
• Destatis specifically mentions strong one-off revenues in the airplanes, ships, trains, and military vehicles category - those will have at least somewhat driven the difference between the core and headline category.
• On a regional split, the picture looks mixed: orders from the eurozone jumped (+14.6% M/M), non-EZ foreign orders declined 1.6% M/M, and domestic orders rose 3.6%.
• Real turnover in manufacturing, which can provide some signal for the September industrial production release (due tomorrow), was -1.4% M/M and -4.4% Y/Y. Current consensus for September IP stands at -1.0% M/M (+2.9% prior) and -3.0% Y/Y (-3.0% prior) - so there may be some slight downside risks to tomorrow’s print.