GERMAN DATA
Germany's IFO Business Climate Index fell for the fourth consecutive month in September to 85.4 (lowest value since January; August 86.6), also missing expectations of 86.0. This was a similar miss to yesterdays' September's German flash PMIs (where both services and manufacturing were lower than expected). The print affirms the narrative of further deterioration of German business sentiment, and increases downside risks to analyst estimates for the remainder of the year (MNI consensus curerntly standing at -0.1% Y/Y for Q3, and +0.4% for Q4).
- The fall compared to August's print was predominantly driven by the current assessment figure, which came in at 84.4 (vs 86.0 cons; 86.5 August which was revised a tenth lower). Expectations also declined, but less so and more broadly in line with expectations, to 86.3 (vs 86.4 cons; 86.8 August). Both measures remain on a downtrend.
- Across sectors, declines were broad-based. Manufacturing overall printed the weakest since the beginning of the pandemic (diffusion balance -21.6 vs -17.8 Aug), but services sentiment also deteriorated, moving further into contractionary territory (-3.5 vs -1.3 Aug). Only construction saw a slight increase, but from a very low level.
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