German January industrial production dropped 7.5% m/m and 19.3% y/y, after already declining 3.9% m/m and 11.3% y/y in December. Expectations had been for a decline of 3.1% m/m, so data were once again much weaker than expected, albeit not a total surprise after the weaker than anticipated orders numbers. The breakdown showed manufacturing production down 8.4% m/m and construction production down 7.8% m/m. Production dropped 10.8% in the three months to January and data confirms that economic activity continues to decline sharply at the start of the year with Germany likely to see at least two more quarters of negative growth. The recent improvements in the ZEW and the details of the Ifo show some pockets of hope, however.