THE TAKEAWAY: IFO says business climate improving -> Greece dragging down market confidence -> Euro bounces on news
The widely read IFO survey out of Germany projected improvement in business climate, current assessment, and economic expectations. The headline business climate indicator came in at 108.3; markets were expecting a reading of 107.6. The previous figure was revised upward to 107.3. The IFO cited internal demand and the rising US economy as the surge's catalyst, but tempered its report by saying it's too early to take German upswing for granted.
The statistics show improving economic sentiment in Germany, but even so, the situation in the Eurozone as a whole remains critical. Negotiation s regarding Greek debt have as of yet yielded no resolution, and a number of European FinMins this weeks indicated their belief that Greece has not been doing enough to fight the crisis. IMF’s Lagarde today suggested a merger of the ESM and EFSF to increase market confidence; however, the scope and funding of these two bodies remains unclear given German resistance to further bailout expenditure.
The Euro bounced 25 points on the IFO news, but the receded to former levels and as of this report was trading at 1.3033.
