The most closely watched index of German business sentiment was released this morning. The headline figure for the Ifo index came at 112.9 pts, up from 112.4 while the market thought there’s no scope for further improvement. No increase was also suggested by the April flash PMI released recently.
Ifo index is pushing higher, it also did not show any hesitation despite the French political risk; source: Macrobond, XTB Research
While expectations component did move a bit lower it is still at a respectable level, one of the highest in the last 3 years. The positive message came from current assessment of business conditions which has continued to beat the market consensus. It is also already above the levels seen during the peak before the global financial crisis.
Ifo current assessment component (red) still hasn’t disappointed since the start of its rally in 2H of 2016; source: Bloomberg
This is the first release of the 2Q and it shows a solid and still improving economic momentum.
Failed attempt by the USD to limit its loss vs EUR this morning; European equities are full of optimism and Ifo index is not giving up on its uptrend so there are many reasons for EURUSD to stay above 1.08, close to 1.085. It seems that a pullback (maybe on the US open) could be blocked by 1.082 looking at the recent trendlines; source: xStation5
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