In December, German factory orders rose by 1.7% M/M, beating the market consensus which was looking for an increase by 1.0% M/M. The rebound was however far too slow to offset the 4.9% M/M decline in November. The details show that strength was based in orders from non-euro zone countries (12.3% M/M), while domestic orders dropped by 1.4% M/M and orders from euro zone countries fell by 6.8% M/M. Orders for intermediate goods stabilized in December, while orders for capital (2.8% M/M) and consumer (1.9% M/M) goods picked up during the last month of the year. In the fourth quarter, German orders rose in two out of the three months and we hope that this will soon translate into stronger German production data as also business confidence indicators suggested that the trend has turned.