German Ifo Business Climate

Tomorrow at 9:00 London time Ifo Institute for Economic Research will release the German Ifo Business Climate numbers.
This report is released on a monthly basis and some three weeks into the current month.
The Ifo is a survey of current and future business sentiment with respondents also requested to rate their expectation six months forward from the survey date.
Due to the size and breadth of this report the result of this survey is highly respected. This is because some 7000 business across Germany which are active in diverse sectors from manufacturing, construction, wholesale and retail are requested to respond.
The German Ifo Business Climate Survey is a leading indicator of the economic health of the country. As businesses can quickly recognize and adapt to the constantly ACFX changing market environment, this survey has proven to be a timely leading indicator to possible future economic activity.
Germany is the 4th largest economy in the world and by far the biggest and the most dominant within the European Union. This makes what happens in Germany very important. The release of the German Ifo can affect economic expectations and values of financial instruments not only in Germany but throughout the European Union.
The Ifo furthermore can have a dramatic effect on the Euro and the Euro crosses. Market volatility around the time of the Ifo release can potentially increase.
The forecasts for this month release are projecting the slight increase to 107.6, as compared to the previous number of 108.0.
A result that is higher than expected could potentially have a positive effect on the Euro currency whereas an actual release that is lower than expected could see the single currency come under pressure.
The reason for this is an optimistic business outlook can precede an increase in business activity and economic growth whereas a pessimistic business outlook could indicate a future contraction in business activity and possible stagnation or drop off of economic growth.
As economic expansion is seen as being inflationary and economic contraction being deflationary the European Central Bank, (ECB) may step in an increase or decrease interest rates so as to ensure that the influential and dominant German economy does not grow or contract too quickly. http://www.acfx.net/german-ifo-business-climate

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