Germany: IFO survey to decline in October – Nomura

Analysts at Nomura expect the German Ifo business expectations and current situation component of the survey to decline in October.

Key Quotes

“This is in line with what was communicated by the ZEW survey compiler earlier this week: “Expectations for the German economy are dampening above all due to the intensifying trade dispute between the USA and China … A further negative influence on economic and export expectations is the danger of a ‘hard Brexit’, which is becoming ever more likely.”

“Last but not least, the situation of the governing coalition in Berlin is perceived to have become more unstable.” We do not expect this trend in sentiment to revert, most of all ahead of the elections in the state of Hesse – to be held on 28 October. As a consequence, we think the Ifo business climate index will fall to 102.9 in October from 103.7 the previous month.”