Euro-zone industrial production down 0.7% in October, fall greater than expected; down 6.7% on annual basis; German, French 10-year yields fall; output contracts in four largest euro economies.
Following a recession in 2009/2010 and the debt-crisis which flowed from it, euro-zone industrial production recovered and then reached a peak four years later in 2016. Growth rates then fluctuated for two years before beginning a steady and persistent slowdown from the start of 2018. That decline was transformed into a plunge in March and April of 2020 which then took over a year to claw back. Production levels in recent quarters have generally stagnated in trend terms.
According to the latest figures released by Eurostat, euro-zone industrial production contracted by 0.7% in October on a seasonally-adjusted and calendar-adjusted basis. The fall was a larger one than the 0.3% contraction which had been generally expected but it was smaller than September’s 1.0% contraction. The calendar-adjusted contraction rate on an annual basis slowed, from September’s revised rate of 6.8% to 6.7%.
German and French sovereign bond yields fell on the day. By the close of business, the German 10-year bond yield had lost 6bps to 2.16%, as did the French 10-year bond yield which finished at 3.71%.
Industrial production contracted in all of the euro-zone’s four largest economies. Germany’s production slipped by 0.1% over the month while the comparable figures for France, Spain and Italy were -0.3%, -0.6% and -0.2% respectively.