German factory orders collapsed in August at the fastest rate in five years as investor confidence in the eurozone took another beating.
Amid fears that the currency bloc is slipping back into recession, economists said that the shock slump in Germany made the prospect of full-scale quantitative easing more likely. That, in turn, would drive up demand for eurozone sovereign debt in anticipation of the European Central Bank stepping into the market to buy in bulk.
German factory orders for August dropped by 5.7 per cent, the biggest fall since January 2009 and far worse than economists’ expectations of a decline of about 2.5 per cent.
Rainer Sartoris, an economist at HSBC, said that the figures “disappointed heavily” and “do not point to any significant