Release Explanation: Measures of the total value of the output from mines, industrial factories and utilities is in the Industrial read. High production numbers usually denote an economy in an upward trend, or growth period. These reports are reactive to change and are well respected.
TheLFB-Forex.Com Trade Desk Thoughts: Industrial production fell in March in the Euro-area by 2.0%, more than what the market had expected. Compared with one year ago, industrial production is down by 20.2%, the largest annual drop on record.
Monthly data shows that energy production fell by 2.8%, and is down by 9.2% from one year ago; intermediate goods decreased 3.1% and are off by 27.0% year-over-year; non-durable consumer goods fell 1.0% from one month earlier, while durable consumer goods tumbled 2.5% in March from February, and are down by 23.2% from March 2008.
“Industrial production has dropped in 12 out of the 16 Euro-area countries. The only countries that recorded a positive contribution were Portugal, Slovenia, Netherlands and Finland. Compared with one year ago, industrial production took a strong hit.”
Forex Technical Reaction: The euro dropped 20 pips during the news release, but the market retraced the move quickly. For now, the euro continues to trade in a tight range, similar to the rest of the majors.