German Business Sentiment Improves Despite Ongoing Supply Chain Woes

It was a relatively quiet morning on the Eurozone economic calendar. German business sentiment was in focus going into the European open.

The numbers were EUR positive, with sentiment improving in April despite the impact of supply chain disruption on inflation and productivity.

Germany’s IFO Business Climate Index Defies Gravity in April

In April, the Business Expectations sub-Index climbed from 84.9 to 86.7, with the Current Assessment sub-Index rising from 97.1 to 97.2. Economists had forecast declines to 83.5 and 95.8, respectively.

As a result, the Ifo Business Climate Index increased from 90.8 to 91.8, beating a forecast of 89.1.

According to the April survey,

• The manufacturing index found support from the expectations indicator, with companies less pessimistic while less satisfied with their current conditions.
• Service providers, by contrast, were more satisfied with their current conditions and less pessimistic about the months ahead.
• Sentiment towards trade worsened, however. The assessment of the current situation deteriorated, with expectations only improving modestly.

Market Impact

Ahead of today’s stats, the EUR had risen to a pre-stat and current-day high of $1.08156 before sliding to a pre-stat and a current-day low of $1.07069.

In response to today’s stats, the EUR fell to a post-stat low of $1.07338 before rising to a post-stat high of $1.07545.

At the time of writing, the EUR was down by 0.53% to $1.07415.