German ifo business climate index drops further to 99.1 in Jan., missing estimates

The headline German ifo business climate index came in at 99.1 for January, weaker than last month's 101.0 and also missing consensus estimates pointing to a reading of 100.6. Conversely, the current economic assessment came in slightly better than expected at 104.3 points in the reported month as compared to 104.2 anticipated, still down from 104.7 previous.

Meanwhile, the ifo Expectations Index – indicating firms’ projections for the next six months, also missed market expectations by a big margin, arriving at 94.2 for January versus expectations of 97.0 and 97.3 recorded in December.

The headline IFO business climate index was rebased and recalibrated in April after the IFO research Institute changed series from the base year of 2000 to the base year of 2005 as of May 2011 and then changed series to include services as of April 2018. The survey now includes 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).