Published: Wed, September 27, 2017
Markets | By Erika Turner

Germany Sept IFO business climate 115.2 vs 116.00 exp

Germany Sept IFO business climate 115.2 vs 116.00 exp

German business confidence unexpectedly deteriorated in September, according to a widely-followed survey released on Monday.

But with indicator still "way above" its long-term average, Europe's largest economy is entering the new legislative period with "a strong tailwind", said Clemens Fuest, the Ifo Institute's president.

The Ifo survey was conducted in the weeks before Sunday's federal election in which Chancellor Angela Merkel won a fourth term but looks set to change coalition partners, meaning its results do not take into account the election outcome. Although the 2,500 managers surveyed by Ifo downgraded their assessment of the current economic situation, they have upgraded their expectations for the coming half year for the fifth time in a row.

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Prices are expected to "slowly drift lower as inventories slowly improve", senior analyst Patrick DeHaan said. After topping out close to $2.70 a gallon, gasoline prices have been going down over the last two weeks.

"We suspect that a more likely cause of the decline is the recent strength of the euro, rather than political uncertainty", Capital Economics analyst Stephen Brown said.

Looking to different sectors surveyed by Ifo, both the manufacturing and wholesale industries reported a dampening of sentiment in September compared with a month earlier.

Meanwhile, the current assessment index declined to 123.6 from 124.7, falling short of expectations of 124.8, while the expectations index slipped to 107.4 from 107.8, versus expectations for a reading of 107.9.

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