German IFO Shows Rising Business Climate Sentiment
THE TAKEAWAY: IFO survey better than expected -> Germany weathering storm better than rest of Europe -> Euro hits session high
Data out of Germany today continued on an optimistic note, with the influential IFO survey improving on expectations in a number of key categories. The benchmark business climate indicator came in at 107.2, above the expected 106.0. Current assessment was 116.7 (116.0 expected), and expectations was 78.4 (97.0).
Today’s reading is the latest German release to encourage the market, after gauges of manufacturing and services in December also showed strength. Investor sentiment rose in December for the first time in 10 months, and German unemployment is at a two-decade low. Today’s data came after the German GfK consumer confidence indicator earlier in the day also showed improvements on expectations.
Even so, other data shows that the rest of Erope has not held up nearly as well as Germany, with Spain and Italy still on the brink of credit failure. A number of credit ratings agencies including Standard and Poor’s have recently encouraged speculation of a downgrade of key European nations, including France.
The Euro has stayed strong throughout the day, hitting a session high after today’s release. As of this report, the single currency is trading at 1.3044.
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