Research Team at Deutsche Bank, suggests that the fourth largest rise in Germany’s ifo expectations since re-unification particularly in the manufacturing sector helped push the ifo index to the highest level since mid-2014.
Key Quotes
“While this brings the manufacturing ifo roughly in line with the manufacturing PMI, the discrepancy between the two surveys with respect to the services sector has gotten wider with the services and retail ifo improving, too. Moreover, at their September level ifo expectations points to a strong GDP growth pick-up in Q4, while the weakening PMI points to slowing growth.
Overall, this data release brought little clarity. On the plus side, it somewhat eases downside risks to our Q4 GDP expectations. On the negative side, we fear that part of the ifo surge is a “relief rally” after initial fears of an immediate large negative Brexit-impact have eased.”
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