The German economy is on a roll according to IFO: the business climate is up to 116.7, significantly above expectations. The Expectations component is up to 109.1 points and the Current Assessment rises to 124.8. All the figures are above expectations and are accompanied by minor upwards revisions.
EUR/USD is rising towards the end of the narrow range, reaching 1.1770. Can it extend the rises?
Germany’s No. 1 Think-Tank, IFO, was expected to show no change in the headline business climate measure: 115.2 in October, identical to September. Business Expectations carried expectations for a drop from 107.4 to 107.3 points. The Current Assessment was predicted to slip from 123.6 to 123.5. Yesterday’s German manufacturing PMI beat expectations, showing robust growth.
EUR/USD was trading at an ever-narrowing range of around 20 pips between 1.1750 to 1.1770. One of the reasons for the slow movement of the pair stems from the tension towards the ECB decision tomorrow.
Here are some previews:
The ongoing crisis in Catalonia is not having a significant impact on the euro this week, but things could come to a head tomorrow. The Catalan parliament convenes in the morning and the Spanish Senate in the afternoon to proceed with suspending the autonomy.
The crisis is going on for a month with no resolution in sight. Spain is the eurozone’s fourth-largest economy and Catalonia is responsible for around 20% of GDP and 25% of exports.
