Summary: Euro-zone industrial production up 0.7% in June, greater than expected; annual growth rate improves to 2.4%; German, French 10-year yields hardly move; expands in three of euro-zone’s four largest 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 in more-recent months has generally stagnated.
According to the latest figures released by Eurostat, euro-zone industrial production expanded by 0.7% in June on a seasonally-adjusted and calendar-adjusted basis. The rise was greater than the 0.2% increase which had been generally expected but it was significantly less than May’s 2.1% increase after revisions. The calendar-adjusted growth rate on an annual basis improved from May’s revised rate of 1.6% to 2.4%.
German and French sovereign bond yields hardly moved on the day. By the close of business, the German 10-year bund yield had returned to its starting point at 0.98% while the French 10-year OAT yield finished 1bps lower at 1.53%.
Industrial production expanded in three of the euro-zone’s four largest economies. Germany’s production grew by 0.6% over the month while the growth figures for France, Spain and Italy were 1.3%, -2.1% and 1.0% respectively.