|
 A day after German industrial orders saw their biggest monthly
drop since the height of the global financial crisis in 2009, its
industrial output figures for August plunged by 4.0 percent, also
the biggest fall in five years.
"Industrial production is currently going through a weak phase...
but the current decline is exacerbated by holiday effects,"
Germany's Economy Ministry said in a statement.
"All in all, one should expect weak production for the third quarter
as a whole."
By contrast, the mining sector was boosted as Rio Tinto rose 5.2
percent after saying it rejected a merger approach from smaller
rival Glencore Plc to create a $160 billion mining and trading giant
in August.
Asian shares had made minor gains overnight but the weak data saw
European bourses jolt lower, led by a 0.7 percent drop on Germany's
Dax which has now lost 7.5 percent in the last three weeks.
London, Paris, Milan and Madrid all took tumbles, while
Italian, Spain, Portuguese and also French government bonds yields
rose amid doubts about what a slowing Germany meant for their more
fragile economies.
Germany's and the euro zone's renewed weakness is part of broader
world wide picture. Apart from the United States, indicators of
global growth have slipped sharply over the past few months.
Economists at Barclays highlighted on Tuesday that their global
manufacturing index is at its lowest level since May and the IMF is
expected to cut back its growth forecasts later.
"Over the summer, there has been quite an apparent divergence in the
global growth story," said Kerry Craig, a global markets strategist
at J.P. Morgan.
"What we are seeing is quite an ugly and uneven recovery. Growth in
euro zone has stalled... and then you have to contrast that with
what is going on in the U.S. where we saw the really strong jobs
data on Friday."
YEN EFFECTS
The euro also weakened slightly after the German data, though with
traders still looking for an excuse to take some profits on the
dollar's recent surge, the dip was only minor.
[to top of second column] |
At the same time, the dollar was struggling versus the yen after
Japanese Prime Minister Shinzo Abe raised the negatives as well as
positives of a weaker yen for his country's economy. It had been a
choppy session but the outcome was that after going as high as
109.25 yen, the dollar was back down at 108.62 yen as Asia trading
started to tail off.
MSCI's broadest index of Asia-Pacific shares outside Japan was last
up about 0.4 percent, after wobbling between positive and negative
territory though the higher yen meant Tokyo's Nikkei ended the day
firmly in the red.
The dollar's weakness helped, however, bolster recently slumping
commodity prices.
Brent oil was steady in early London trading at $92.62 a barrel
alongside growth-attuned copper, while gold held above $1,200 an
ounce.
The Reserve Bank of Australia held its cash rate steady at 2.5
percent at its regular policy review on Tuesday, and said that its
currency remains high by historical standards.
The Australian dollar erased earlier gains and slipped about 0.3
percent to $0.8738, moving back towards Friday's low of $0.8642
which was its weakest level since July 2010.
(Reporting by Marc Jones; Editing by Tom Heneghan)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
