European markets opened lower on Monday, as new data showed German factories suffered their steepest decline in production on record in April.
It came as official German data showed manufacturers in Europe’s biggest economy saw output slide 17.9% month-on-month in April, worse than the 16% expected in a poll of economists, according to Reuters. Capital goods manufacturers’ output slid 35.3% and carmakers saw a 70% decline.
“With today’s data, two months of COVID-19 have already left a more adverse impact than the entire financial crisis,” said Carsten Brzeski, head of macro at ING. “Today’s data also illustrates how an open economy like Germany has been hit severely by the lockdown measures both at home and abroad.”
Germany’s economy ministry said it showed lockdown measures hitting hard, but added in a statement: "The low point has been reached. With the gradual easing of protective measures and the resumption of production in the automotive industry, the economic recovery is beginning now."
The IFO economics institute said manufacturers expect production levels to continue to decline in the next three months, but at a slower pace than previously. “That only means that the nosedive is now becoming flatter," said Klaus Wohlrabe, the IFO’s survey chief.
Thomas Gitzel, an economist at VP Bank Group, told Reuters it pointed to a 10% decline in German GDP in the second quarter, the worst since the Second World War.
Brzeski said the prospects for a rebound did not look promising, noting there was “no saviour in sight” in the way Asian demand helped Germany recover from the global financial crisis.
It comes after a mixed trading session in Asia overnight. Hong Kong’s Hang Seng index (^HSI) fell 0.1%, China’s Shanghai Composite (000001.SS) rose 0.2% and Japan’s Nikkei 225 index (^N225) rose 1.4%.
Futures pointed to a slightly higher open in the US, after Friday’s rally on a surprise jump in US employment. S&P 500 futures (ES=F), Dow Jones futures (YM=F) and Nasdaq futures (NQ=F) were all trading around 0.1% higher at around 3.40am eastern time.