ITALY AUCTION RESULTS: BTP Short Term / BTPei Results

The Germany Ifo business climate index increased for a sixth consecutive month in August as it takes it to the high of its range for the past eighteen months, but it still suggests little material upside to tepid German real GDP growth despite this. 

•  The Ifo Business Climate index was close to expectations as it slightly improved in August to 89.0 (cons 88.8) from 88.6 in July.
• Whilst still subdued by historical standards, it’s nevertheless at its highest since Apr 2024 on the back of six consecutive monthly improvements.
• This trend improvement has come with increases in both the current assessment and more notably the expectations indexes. This expectations-led improvement continued this month, with the expectations index rising to 91.6 (cons 90.5) from 90.8 vs the current assessment edging a tenth lower to 86.4 (cons 86.7).
• A seeming post-pandemic structural break with the historical fit between the business climate index and real GDP growth complicates the readthrough to growth implications, although rolling z-scores have more recently been useful.
• Here, the Ifo business climate has started to look a little more optimistic than the European Commission’s Economic Sentiment Index (to July) but even then the Ifo series suggests little upside to still tepid German real GDP growth of 0.2% Y/Y as of Q2 (having averaged -0.4% since 1Q23). 

• MNI: GERMANY AUG IFO BUSINESS CLIMATE INDEX 89

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