GILTS: Off Highs, Curve Flatter

The details of the Ifo business climate by sector didn’t corroborate the minor increase in the overall index, seemingly implying a higher response rate from services-related firms in the August survey. We wonder if that's down to response rates in the holiday season. 

• The business climate balance increased from a seasonally adjusted -6.4 to -5.5 (we wrote on the index earlier – GERMAN DATA: A Sixth Consecutive Improvement For Ifo Business Climate – 0935BST) but all four main sectors saw their business climate balance soften.
• Latest sectoral values with highlights from the Ifo press release (link):
• Services inched lower for a second month to 2.6, but remains the only sector in positive territory. “While the current situation was assessed as significantly better, expectations became more cautious. Sentiment, however, improved among architecture and engineering firms.”
• Manufacturing gave back some of its latest increase, dipping to -12.2 from -11.9. “Companies were somewhat less satisfied with current business. Expectations were revised slightly downward, and there are still no indications of growth in order intake. Sentiment among capital goods manufacturers improved noticeably.”
• Construction unwound the latest increase as it fell to -15.3 from -14.3. “The index edged down slightly after many months of stability. Companies expressed less satisfaction with the current situation. However, their outlook for the coming months improved.”
• Trade continues to lag and saw a second monthly decline to -21.4 from -20.3 for its lowest since April. “The index weakened, driven by poorer business performance. However, expectations were slightly less pessimistic.”