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In Germany, factory orders rose more than expected in June, while Rheinmetall, the country’s biggest defence company, slashed its outlook.

New manufacturing orders increased by 3.1% from the previous month, according to Germany’s statistics office, comfortably beating analysts’ expectations of an 0.3% increase. However, stripping out large orders, new orders dipped 0.5%.

Over the three months to June, new orders rose 1.3% from the previous three months.

Machinery and equipment led the way with 12.7% growth along with computer, electronic and optical products, up 22.7%. There were big orders in both sectors. The car industry reported a 3.8% rise.

In contrast, orders plunged 41.7% for aircraft, ships, trains and military vehicle equipment, with only partial data in this sector available at the moment.

Foreign orders were up 0.2% in June, with orders from the euro area falling by 14% and orders from outside the eurozone rising by 10.2%. Domestic orders rose by 7.8%.

Meanwhile Rheinmetall cut its sales forecast for this year after losing a big German naval contract worth several billion euros.

Rheinmetall now says annual revenues could be as low as €13.7bn rather than the previously forecast €14bn at the low end of its targeted range. The arms maker stuck to its operating margin forecast.

This comes after Germany cancelled the F126 frigate programme in June, which Rheinmetall said could reduce its revenues by up to €300m.

Asian shares retreated on Thursday after the previous day’s tech rally, as investors turned cautious again, following in Wall Street’s footsteps where Elon Musk-run SpaceX plunged 13.6% and chipmaker AMD tumbled 7%.

Both delivered strong quarterly results but investors freaked out about SpaceX’s ballooning AI spending while AMD was hit by Musk saying SpaceX planned to buy its AI chips from rival Nvidia. While SpaceX’s quarterly revenue nearly doubled year-on-year to $7.8bn, capital spending jumped to $18.3bn – more than six times last year’s level – with most of it going towards AI.

Japan’s Nikkei fell 0.9% while South Korea’s Kospi lost 4.6% and China’s CSI 300 index dipped 0.3%.

Brent crude is holding below $80 a barrel, dipping 21 cents, or 0.3%, to $79.22 a barrel.

8.30am BST: Eurozone construction PMI for July

9.30am BST: UK construction PMI for July

1.30pm BST: US Initial jobless claim for week to 1 August