Austria’s industrial production rose by 1.1% year on year in February. This was up from 0.3% in the previous period.
The increase means output grew faster than before. The latest reading follows a lower annual growth rate in the prior month.
Austrian Industrial Output Signals Wider Turnaround
This positive Austrian industrial data for February supports the recent March manufacturing PMI for the Eurozone, which showed the sector expanded for the first time in over a year, hitting 50.3. This suggests to us that the industrial slowdown we saw through much of 2025 may finally be turning a corner. The recovery appears to be broadening beyond just a few specific areas.
This strengthening economic activity, combined with the latest Eurozone inflation report for March holding firm at 2.6%, makes it less likely the European Central Bank will cut rates in the next quarter. We should therefore consider that interest rate futures are underpricing the possibility of rates remaining at current levels through the summer. This challenges the market consensus from earlier this year.
For currency markets, this resilience could lend support to the Euro. A less dovish ECB outlook might cause us to look at buying near-term EUR/USD call options, positioning for a move higher as the narrative shifts away from imminent rate cuts. The spread between European and U.S. economic surprises has been narrowing, and this data reinforces that trend.
Given the direct link to manufacturing, we see potential upside in European equity derivatives. We should explore call options on Austrian (ATX) and German (DAX) stock indices for the coming months, as these are heavily weighted towards the industrial and export-oriented companies that benefit first from a production upswing. This is a significant change from our more defensive posture in late 2025.
