German IFO surprises in March – ING

By FXStreet Carsten Brzeski, Research Analyst at ING, suggests that what initially was supposed to be a big day of German economic sentiment data, with releases of the three most prominent confidence indicators on one morning, has all of a sudden and tragically become a sad day for Europe.

Key Quotes

“However, Germany’s most prominent indicator, the Ifo index, rebounded in March to 106.7, from 105.7 in February. Both, the current assessment and the expectations component increased in March; showing that German businesses seem to have shaken off fears of long-lasting global slowdown.

While commentators are currently heatedly discussing the risks of a wide-spread global slowdown, the German economy shows solid resistance. While soft indicators have disappointed in recent months, hard data have rebounded at the start of the year. Actually, hard data – except for exports – in January has actually surprised to the upside and industrial production, construction, car registrations and retail sales were actually higher than in the final quarter of 2015.

At the same time, the continued strength of the service sector seems to make up for a more structural slowdown in industrial production in the wake of weaker demand from too many important export destinations. Today’s Ifo index adds to …read more

Source:: FX Street