The German IFO business climate indicator came out somewhat weaker than expected in May. The headline index rose from 83.7 to 84.2, while the consensus was looking for an outcome of 85.0. Looking at the details, the current assessment sub index deteriorated from 83.5 to 82.5, while the expectations rose from 83.9 to 85.9, the highest level since September 2008. The details show broadly the same picture as the ZEW indicator with the current assessment still deteriorating and confidence about the expectations improving significantly since the start of this year. In the coming months, we keep a close eye on the current assessment as an improvement in this index might be an important sign that business activity picks up again in Europe’s biggest economy.