Some moderation in German Ifo expected

Societe Generale notes..

• In March, we expect the Ifo business climate index to have risen to 106.9, from 106.8 before.
  
  
• While the rebound was stronger than expected in Nov-Jan, the improvement was weaker than expected in February, and we see risks of disappointment given that the positive news flow has slowed down. 
  
  
• However, the Ifo index is still well above its long term average and currently signals growth of around 0.6% qoq, which is on the high side of our expectations.
  
  
• Some moderation in the coming months is thus to be expected. As before, we expect the export and manufacturing sectors to be less optimistic on the future outlook, while companies focused more on the domestic economy are likely to be more optimistic. 
  
  
• This picture should get somewhat more balanced later this year as global demand strengthens but even in the medium term perspective do we expect domestic demand in Germany to outperform