German Business Survey Edges Downwards

The latest Ifo business climate survey released in Germany has revealed that the mood in the German economy remains positive, even though the index fell by a slender margin of 106.6 in April from 106.7 in March.

Although companies were somewhat less satisfied with their current situation, their business expectations brightened once again, and signified the continued moderate upturn in the German economy.

The business climate improved in the manufacturing sector, and industry leaders were optimistic about the months ahead, with production plans escalated by a significant margin, even though manufacturers scaled back their assessment of the current conditions.

The survey did find that capacity utilisation dropped by 0.7% to 84.4%, with the food industry having the greatest impact on that figure.

Overall, however, capacity utilisation remained one percentage point above the long-term average.

There was a less positive outlook in the wholesaling and retailing industries, where the business climate index was reduced markedly, but still remained over the long term average level.

Firms at both levels of trade, were less satisfied with both their current situation and their business outlook.

Although in construction the business index was positive, as there was a bright outlook for the industry.

This was despite contractors being less optimistic about their business prospects ahead.

Orders Down in Construction Industry in  Germany

The German Federal Statistical Office has found that new orders in the construction industry has decreased 1.5% in February, compared to the previous month.

There was better news on the amount of turnover that construction companies where there is more than 20 employees, as company statements showed a hike of 12.3%, in contrast to February last year.

Pound Gains Ground Against the Dollar

The GBP/USD relationship has favoured sterling so far today GMT, as the pound has increased against the greenback from buying $1.432 yesterday to now purchasing $1.443.

While the EUR/USD rate has maintained a different pattern in the past 24 hours, as the euro is now buying $1.12 this morning CET, having reached over the $1.13 yesterday morning.

Monex Europe said in their daily report that the euro opens this week slightly weaker than it did the last, after a sharp fall on Friday.

They also allude to reports that emerged on Friday that euro area  finance ministers were edging closer in negotiating the next stage of Greece’s debt bailout.

The terms reportedly being imposed on Greece for the latest round of bailout funding remain completely outside the realm of sensible economic policy, and are extremely unlikely to be achievable, the forex company said.

Greece’s 2018 fiscal target for a 3.5% primary surplus is little more than a ‘pipe dream’ at the moment, Monex Europe said, and would only be remotely achievable in the event of a sudden explosion of economic growth.

British Business Survey Reports Manufacturing Orders Down

The Confederation of British Industry in their latest industrial trends survey, has revealed that manufacturing orders have edged downwards in the three months leading up to April.

The 472 respondents said that the volume of orders declined, which matched the results of the previous survey.

Despite the findings, manufacturing companies are positive about the upcoming quarter, with both output and demand expected to grow, and strong expectations for export orders.

However, optimism about export prospects for the remainder of the year has flat-lined.