German Business Confidence Falls in January

German business confidence suffered its steepest drop since 2008, according to a widely watched survey by Ifo institute.

The fall, the third in a row, left the Ifo business climate index at 105.7 from 107.3 in January. Economists had forecast a slip to 106.8.
The fall is being blamed on a drop in demand for German goods in emerging markets.

It leaves business morale at its lowest level in more than a year.
The survey, which is based on monthly responses from around 7,000 firms in Germany, suggests that companies are concerned about the economic outlook for the next six months.

Europe’s largest economy has suffered from a drop in demand from emerging markets in Asia and Latin America, Carsten Brzeski of ING Bank said the numbers were a “wake up call”. He added that “global events have finally reached German companies’ boardrooms”.

German companies have been relying on a strong US economy to offset the falling exports to China, Brazil and other emerging markets.
Ifo President Hans-Werne Sinn said the outlook for the German economy was worrying.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza