German Ifo index improves more than expected in May

Closely watched German Ifo index, which tracks the country’s business executives’ assessment of the current business climate, rose to 107.7 in May, up from 106.7 in the previous month. This was the strongest reading since December 2015 and beat the Reuters consensus forecast for a reading of 106.8.

IFO survey showed gains in both the current assessment index and the expectations index. Assessment of current conditions jumped to 114.2 from 113.2 in April, and glided past forecasts of a more moderate 113.3 reading. The expectations index has bounced off its early-2016 lows to currently stand at 101.6 in May.

"The German economy is growing at a robust pace. Companies were significantly more satisfied with their current business situation and noticeably more optimistic about the coming months." said Ifo chief Clemens Fuest.

Following a very mixed ZEW report yesterday and a misleading PMI on Monday (the details were worse than the headline), today’s IFO survey showed gains. Overall, the signals coming from Germany this week are quite mixed, but with a slight positive slant.” said Research Team at TDS