Negative data coming from Germany

Germany ’s industrial output and exports fell in April, dashing hopes for a cyclical recovery in the country’s critical sector amid threats of U.S. trade tariffs. Output fell 1.4 percent from a month earlier and shipments of goods abroad fell 1.7 percent, the statistics office said on Friday. Both declines were sharper than economists had forecast in a Bloomberg survey. Data on Thursday showed German factory orders rose surprisingly in April, defying expectations of a significant decline, as demand for computers, electronics and optical goods rose sharply. Europe’s largest economy got off to a strong start to the year with stronger-than-expected growth in the first three months, but that was largely because businesses and exporters were struggling to avoid expected U.S. tariffs. The weakness in April suggests a poor start to the second quarter, especially as industrial output data showed broad-based declines. It highlights the challenges facing Chancellor Friedrich Merz, who took office at the beginning of May.