Germany

The German manufacturing sector continues to battle headwinds. Factory orders fell 1.9% in April after an upwardly revised 3.2% gain in March (vs. the preliminary 2.2% estimate), remaining in a seven-month flat trend. Domestic orders rose for the third time in four months in April for a total gain of 3.1%. Foreign orders sank 3.6% after a 4.4% jump in March. Foreign orders from the non-euro region led April’s decline, plummeting 4.7% (after a two-month surge of 11.9%). These consumer and capital goods orders fell 11.1% and 7.3%, respectively, after soaring 11.2% and 15.2% in March. Orders from the euro area fell for the fifth time in six months (by 13.4%), with capital and consumer goods orders down 21.2% and 5.2% over the six-month period.

German production remains volatile around recent highs. Industrial output slumped 2.2% in April after a downwardly revised 2.2% (from 2.8%) gain in March. It’s within 3.7% of its cyclical high last July. Capital goods output declined for the first time this year by 3.6% in April, falling to the bottom of its recent flat trend. Consumer goods production fell for the fifth time in six months, down 4.2% over the six-month period to its lowest level since February 2010. It’s 6.8% below its cyclical high last summer.

Today's Morning Briefing: Easing Does It? (1) The Federal Open Mouth Committee. (2) Leaders and laggards in yesterday’s rally. (3) Staying sector-neutral for now. (4) Draghi is ready. (5) An August rally scenario following backing and filling in June and July. (6) Muddling along in the US economy. (7) Earnings season ahead. (8) Waiting for downward European guidance and positive surprises elsewhere. (9) European leaders won’t let crisis get in the way of their August vacations. (10) Romney rally. (11) Walker rally. (12) Yellen rally. (More for subscribers.)