Euro-Zone April industrial orders dropped 1.0% m/m and 35% y/y. This was much weaker than our forecast and median of 0.0% m/m, but March was revised up to -0.2% m/m from -0.8% m/m reported initially. The three months change improved for a second consecutive time, but at -6.1% still remains very weak and in line with expectations for another negative GDP number in the second quarter of the year. Orders for durable consumer goods declined 0.9% m/m and orders for capital goods dropped 2.4% m/m, while orders for non durable consumer goods improved 1.8% m/m. The latter is likely a reflection of stronger car sales on the back of government incentives in several Euro-Zone countries.
Meanwhile, ECB’s Provopoulos warns that stabilization doesn’t mean quick recovery. The Greek central bank head said today that “it is true that recently there have been indications of a slowing in the worsening, or a gradual stabilization, of economic activity in the U.S. and Europe, creating optimism that a recovery could begin earlier than expected”. At the same time he warned that “these signs however don’t necessary prejudge a quick return to growth”, adding that “the degree of uncertainty for the course of the global and European economy remains high”. Officials continue to warn against overblown growth optimism and markets are starting to realize that improved sentiment doesn’t mean there will be a quick recovery.