German Ifo business climate extends drop – fall to 102.1 more than expected

  • IFO business climate index dropped sharper than expected with both IFO expectations index and IFO current assessment index below estimates
  • Some of today’s prints must be analysed critically, as the IFO Institute has revamped the index calcuations to reflect the growing importance of Germany’s services industry. And since manufacturing is still Germany’s economic engine, it is not surprising that this adjustment negatively affects the final numbers
  • Nevertheless, the ongoing trend of weak European economic figures could increase the downside pressure on the Euro, similar to 2008, 2011 and 2014