German Business Sentiment Weighs on the EUR ahead of a Hectic U.S Economic Calendar
Following November’s prelim private sector PMIs on Tuesday, German business sentiment was in focus this morning.
German Business Sentiment
For November, the Ifo Business Climate Index fell from 97.7 to 96.5 versus a forecasted 96.6.
According to the November survey,
- Companies were less satisfied with their current business situation and expectations became more pessimistic.
- The Business Expectations sub-index fell from 95.4 to 94.2 versus a forecasted 95.0.
- Also in decline was the Current Assessment sub-index, which slipped from 100.2 to 99.0.
- Supply bottlenecks continued to be an issue, with firms planning on raising prices.
- Sentiment in the service sector deteriorated noticeably.
- The last time the expectations indicator saw such a heavy decline was in Nov-2020.
- Service providers were also less satisfied with their current situation as well.
- As a result of the 4th wave of the COVID-19 pandemic, expectations plunged, especially in the tourism and hospitalities sectors.
By Sector, the Ifo Business Climate by sector moved were follows:
- Manufacturing: 17.5 to 16.5.
- Services: 16.6 to 11.5.
- Trade: 3.7 to 2.6.
- Construction: 12.8 to 12.0.
Ahead of today’s stats, the EUR had risen to a pre-stat and current day high $1.12552 before hitting reverse.
In response today’s business sentiment figures, the EUR fell to a post-release and current day low $1.12036.
At the time of writing, the EUR was down by 0.32% to $1.12122.
Inflation, jobless claims, core durable goods, personal spending, and 3rd quarter GDP numbers.
Late in the day, the FOMC meeting minutes will also garner plenty of interest.
Another spike in the FED’s preferred core PCE price index could test support for riskier assets. Economists have forecasted a pickup from 3.6% to 4.1%.