German Factory Orders Unexpectedly Fall In January

German factory orders sharply dropped in January at the fastest pace in seven months, defying expectations for further gains, mainly due to a slump in external demand, preliminary data from the Federal Statistical Office showed on Friday.

Manufacturing orders decreased a seasonally and calendar adjusted 2.6 percent month-on-month, while economists were looking for a modest 0.5 percent gain.

The latest fall in orders was the worst since a 3.6 percent slump in last June.

After considering major orders received subsequently, December’s 1.6 percent decline in orders was revised to a 0.9 percent increase.

Excluding major orders, manufacturing orders fell 2.5 percent monthly in January.

Domestic orders decreased 1.2 percent and foreign orders fell 3.6 percent in January. Demand from the euro area shrunk 2.6 percent and bookings from other countries fell 4.2 percent.

Orders for intermediate goods dropped 1.1 percent and those for capital goods plunged 3.6 percent. Demand for consumer goods decreased 1.4 percent.

On a year-on-year basis, factory orders decreased 3.9 percent in January after a 4.5 percent decline in December, revised from 7 percent. Economists had forecast a 3.10 percent fall.

Swiss Inflation Steady At 0.6%

Switzerland’s consumer price inflation was stable in February after slowing slightly at the start of the year, figures from the Federal Statistical Office showed on Tuesday.

The consumer price index rose 0.6 percent year-on-year, same as in January. The latest inflation rate was in line with economists’ expectations.

Compared to the previous month, the CPI climbed 0.4 percent year-on-year after declining 0.3 percent in each of the previous three months. The latest increased matched economists’ expectations.

The statistical office attributed the monthly increase of 0.4 percent to several factors including rising prices for air transport and for international package holidays, while prices for hotel accommodation and berries decreased.

Core inflation, which excludes fresh and seasonal products, energy and fuel, eased to 0.4 percent in February from 0.5 percent in January. The core CPI rose 0.4 percent, reversing the similar size decline in the previous month.

The harmonized index of consumer prices, or HICP, which is meant for EU comparison, rose 0.7 percent year-on-year in February, same as in January. On a monthly basis, the HICP climbed 0.3 percent after a 0.6 percent decline in the previous month.

Geopolitical risks put a damper on global shares as US dollar gains

US stocks declined for a third day as lingering concerns over trade and geopolitical risks offset a report showing the economy cooled by less than expected last quarter. The dollar climbed and Treasury yields increased.

   Equities received brief bumps higher after White House economic adviser Larry Kudlow and Treasury Secretary Steven Mnuchin gave optimistic outlooks on the status of trade negotiations with China. Stocks dropped earlier in Europe and Asia as disappointing manufacturing data out of China and an abrupt end to the US-North Korea summit added to a litany of concerns facing investors.

“This report would have given a bigger boost to equities and other risk assets if not for the negative news coming out of Vietnam,” said Chris Gaffney, president of world markets at TIAA Bank in St. Louis.

“This, along with the re-emergence of hostilities between India and Pakistan, has increased the geopolitical risks.”

The 2.6pc annualised rate of gains in gross domestic product from October to December compared with the 2.2pc median estimate of economists surveyed by Bloomberg.

It followed a 3.4pc advance in the prior three months, according to a US Commerce Department report that was delayed a month by the government shutdown.

“This really helps at least reduce imminent recession fears and is just another indicator that the economy certainly slowed down but it looks less recessionary than just a mid-cycle slowdown at this point,” said Jim Paulsen, chief investment strategist at Leuthold Weeden Capital Management in Minneapolis.

“And certainly the bond market’s initial reaction seems to be that way, with it lifting yields for example.”